1 BY AN ORDER OF 18 AUGUST 1972, LODGED WITH THE REGISTRY OF THE COURT ON 3 OCTOBER 1972, THE BUNDESVERWALTUNGSGERICHT, BY VIRTUE OF ARTICLE 177 OF THE EEC TREATY, REFERRED FOR PRELIMINARY RULINGS TWO QUESTIONS ON THE VALIDITY AND INTERPRETATION OF THE DECISION OF THE COMMISSION OF 8 MAY 1969 ( OJ NO L 122/1 ) AUTHORIZING THE FEDERAL REPUBLIC OF GERMANY TO LIMIT INTERVENTION PURCHASES OF CERTAIN CEREALS .
2 THE FALL OF THE FRENCH FRANC IN SPRING 1969, GAVE SPECULATORS THE CHANCE TO RE-SELL FRENCH CEREALS IN GERMANY AT A CONSIDERABLE PROFIT ON THE EXCHANGE . THIS CAUSED THE CEREALS TO BE TENDERED ON A VAST SCALE AT PRICES BELOW THE INTERVENTION PRICE EXPRESSED IN GERMAN MARKS WITH THE EFFECT THAT HOMEGROWN CEREALS WERE LARGLY EXCLUDED FROM THE GERMAN MARKET AND TENDERED FOR INTERVENTION PURCHASE ON A VAST SCALE . IN THE COURSE OF APRIL AND MAY SIGNIFICANT QUANTITIES OF FRENCH CEREALS WERE EVEN DIRECTLY TENDERED TO THE GERMAN AUTHORITIES FOR INTERVENTION PURCHASE IN ORDER TO PROFIT FROM THE DIFFERENCE IN THE INTERVENTION PRICES EXPRESSED RESPECTIVELY IN FRENCH FRANCS AND GERMAN MARKS . AMONGST OTHER MEASURES, BY THE DISPUTED DECISION, THE COMMISSION AUTHORIZED THE FEDERAL REPUBLIC OF GERMANY TO TAKE PROTECTIVE MEASURES ON THE BASIS OF ARTICLE 226 OF THE TREATY, THEN STILL IN FORCE, IN PARTICULAR TO LIMIT INTERVENTION PURCHASES OF COMMON WHEAT AND BARLEY TO CEREALS HARVESTED IN THAT STATE . THE GERMAN INTERVENTION AGENCY THEN REFUSED TO ADMIT A LOT OF FRENCH COMMON WHEAT WHICH THE PLAINTIFF IN THE MAIN ACTION HAD PRESENTED FOR INTERVENTION, AND THE LATTER SUBMITTED THE LEGALITY OF THIS REFUSAL TO THE NATIONAL ADMINISTRATIVE JUDGE . I - ON THE VALIDITY OF THE DECISION OF 8 MAY 1969
3 THE FIRST QUESTION ASKED IS WHETHER THE DECISION OF 8 MAY 1969 WAS VALID . IT EMERGES FROM THE DOSSIER THAT THE QUESTION IS, IN THE FIRST PLACE, WHETHER THE ADOPTION OF REGULATION NO 120/67 EEC ( OJ NO 117, P . 2269 ) AND IN PARTICULAR ARTICLE 8 THEREOF, EXCLUDED THE APPLICATION OF ARTICLE 226 OF THE TREATY IN THIS CASE, AND, IN THE SECOND PLACE, WHETHER THE CONDITIONS WHICH ARTICLE 226 PROVIDES FOR ITS APPLICATION HAD IN THIS CASE BEEN MET . ( A ) ON THE POSSIBLE EFFECT OF REGULATION NO 120/67 EEC ON THE APPLICABILITY OF ARTICLE 226 OF THE TREATY
4 THE PLAINTIFF IN THE MAIN ACTION CONSIDERS THAT SINCE THE FIRST PARAGRAPH OF ARTICLE 8 OF REGULATION NO 120/67 EEC CONFERRED ON THE COUNCIL THE POWER TO DETERMINE " THE CONDITIONS UNDER WHICH INTERVENTION AGENCIES MAY TAKE SPECIAL INTERVENTION MEASURES TO PREVENT SUBSTANTIAL PURCHASES BEING MADE IN PURSUANCE OF ARTICLE 7 ( 1 ) IN CERTAIN REGIONS OF THE COMMUNITY, " IT FOLLOWS THAT ARTICLE 226 OF THE TREATY IS NO LONGER APPLICABLE IN SUCH A SITUATION .
5 BY ARTICLE 226 OF THE TREATY, DURING THE TRANSITIONAL PERIOD PROVIDED FOR BY ARTICLE 8 THEREOF, PROTECTIVE MEASURES MAY BE TAKEN WHERE THERE ARE SERIOUS DIFFICULTIES WHICH ARE LIABLE TO PERSIST IN ANY SECTOR OF THE ECONOMY . BY ARTICLE 38 ( 2 ) OF THE TREATY, THE PROVISIONS OF ARTICLE 226 SHALL APPLY TO AGRICULTURAL PRODUCTS . THE FACT THAT REGULATION NO 120/67 EEC COMPLETED THE COMMON ORGANIZATION OF THE MARKET IN THE CEREALS SECTOR IS NOT OF SUCH A NATURE AS TO RESTRICT THE APPLICATION OF A GENERAL PROVISION OF THE TREATY, SUCH AS ARTICLE 226 . EVEN IF, AS IS WRONGLY ALLEGED, THIS REGULATION PROVIDED MEASURES FOR SITUATIONS SUCH AS THAT WHICH LED THE COMMISSION TO APPLY ARTICLE 226 OF THE TREATY, THE LATTER WOULD NOT THEREBY BE DEPRIVED OF THE POWER TO AUTHORISE THE PROTECTIVE MEASURES NECESSARY TO REMEDY THE ECONOMIC DIFFICULTIES CAUSED BY AN EXCEPTIONAL INFLUX OF FRENCH CEREALS INTO GERMANY . SINCE ARTICLE 226 REMAINED APPLICABLE UNTIL THE END OF THE TRANSITIONAL PERIOD PROVIDED FOR IN ARTICLE 8 OF THE TREATY, THE FACT THAT REGULATION NO 120/67/EEC TERMINATED THE TRANSITIONAL ARRANGEMENTS PROVIDED FOR THE CEREALS SECTOR BY OTHER REGULATIONS, WAS NOT OF SUCH A NATURE AS TO LIMIT THE PERIOD OF APPLICATION OF ARTICLE 226 .
6 THE VALIDITY OF THE DECISION IN QUESTION IS NOT IMPAIRED BY THE FACT THAT AFTER REGULATION NO 120/67/EEC CAME INTO FORCE, IT WAS FOUNDED IN ARTICLE 226 . ( B ) ON THE CONDITIONS OF APPLICATION OF ARTICLE 226 OF THE TREATY
7 THE PLAINTIFF IN THE MAIN ACTION DISPUTES THE VALIDITY OF THE DECISION OF 8 MAY 1969 ON THREE POINTS . IN THE FIRST PLACE, DIFFICULTIES WHICH WERE SERIOUS AND LIABLE TO PERSIST IN THE CEREALS SECTOR, AND WHICH ALONE COULD HAVE JUSTIFIED THE COMMISSION' S EXERCISE OF THE POWER, WERE NOT PRESENT, THE GERMAN INTERVENTION AGENCY HAVING AT ITS DISPOSAL AT THE DATE OF THE DECISION SUFFICIENT STORAGE TO COPE WITH THE QUANTITIES TENDERED FOR INTERVENTION . IN THE SECOND PLACE, THE PROTECTIVE MEASURES AUTHORIZED WERE NOT APPROPRIATE TO RECTIFY THE SITUATION, AS THE LIMITATION OF INTERVENTION PURCHASES TO GERMAN CEREALS DID NOT RESULT IN FEWER TENDERS FOR INTERVENTION PURCHASE BUT ONLY DISPLACEMENT OF THE TENDER, THE FRENCH CEREALS DRIVING HOMEGROWN CEREALS FROM THE MARKET SO THAT THE LATTER WERE PRESENTED IN INCREASED QUANTITIES FOR INTERVENTION PURCHASE . FINALLY, IT IS ALLEGED, THE COMMISSION DID NOT CHOOSE MEASURES WHICH WOULD LEAST DISTURB THE FUNCTIONING OF THE COMMON MARKET; MEASURES CORRESPONDING MORE TO ITS GENERAL SCHEME, IN PARTICULAR THE GRANTING OF DENATURING PREMIUMS AND REFUNDS ON EXPORTS TO THIRD COUNTRIES, WERE BETTER REMEDIES FOR THE LACK OF MEANS OF STORAGE THAN THE MEASURES AUTHORIZED, WHICH BY RESTRICTING THE OBLIGATION TO TAKE INTERVENTION MEASURES, INFRINGED THE VERY ESSENCE OF THE ORGANIZATION OF THE MARKET .
8 THE PLAINTIFF IN THE MAIN ACTION UNDERSTANDS THAT THE DECISION WAS PRINCIPALLY CAUSED BY THE GERMAN INTERVENTION AGENCY' S LACK OF MEANS OF STORAGE, WHICH LACK AT THAT TIME CONSTITUTED THE DIFFICULTY WHICH WAS SERIOUS AND LIABLE TO PERSIST, AND WHICH THE DECISION WAS INTENDED TO REMEDY .
9 HOWEVER, THIS IS NOT THE PROPER WAS OF LOOKING AT THE MATTER . IN FACT, THE DECISION WAS DIRECTED CHIEFLY TOWARDS THE SITUATION DESCRIBED IN ITS FIRST TWO RECITALS, VIZ . THE ABNORMAL INCREASE IN THE TRADE IN CEREALS IN THE COMMUNITY IN THE COURSE OF 1968/69, CAUSED BY THE TENDER OF FRENCH CEREALS ON THE GERMAN MARKET AT PRICES BELOW THE INTERVENTION PRICE ON THAT MARKET, AND RESULTING IN " HOMEGROWN CEREALS BEING ALMOST ENTIRELY REPLACED IN THE USUAL DISTRIBUTION NETWORK; AND A CONSIDERABLE INCREASE IN INTERVENTIONS . " IF INSUFFICIENT MEANS OF STORAGE, HAD, AS THE THIRD RECITAL RELATES, CAUSED THE REQUEST FOR AUTHORIZATION BY THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY AND THE ADOPTION OF THE DISPUTED DECISION, IT HAD BEEN PRESENTED AND TAKEN INTO ACCOUNT PURELY AS A CONSEQUENCE OF THE ABNORMAL DEVELOPMENT OF THE MARKET . THUS, THE EXAMINATION OF THE LEGALITY OF THE PROTECTIVE MEASURES WHICH HAD BEEN AUTHORISED SHOULD BE CARRIED OUT NOT PRINCIPALLY IN THE LIMITED CONTEXT OF A MORE OR LESS SIGNIFICANT LACK OF MEANS OF STORAGE, BUT IN THE MORE GENERAL CONTEXT OF THE ABNORMAL INCREASE IN THE SUPPLY OF FRENCH CEREALS IN GERMAN DISTRIBUTION NETWORKS AS A CONSEQUENCE OF THE MONETARY SITUATION . 1 . ON THE EXISTENCE OF DIFFICULTIES WITHIN THE MEANING OF ARTICLE 226
10 THE PLAINTIFF IN THE MAIN ACTION, WHILE MAINTAINING THAT THE INCREASED IMPORTATION OF FRENCH CEREALS TO THE FEDERAL REPUBLIC OF GERMANY WAS PARTLY TO BE EXPLAINED BY THE COMING INTO FORCE OF REGULATION NO 120/67/EEC, IT DOES NOT DISPUTE THAT THE UNUSUAL INCREASE IN IMPORTS IN THE SPRING OF 1969 WAS THE PRODUCT OF THE MONETARY SITUATION AND HAD IN LARGE MEASURE REPLACED HOMEGROWN CEREALS WHICH WERE ALMOST ALL TENDERED FOR INTERVENTION .
11 THE EXCEPTIONAL NATURE OF THE SITUATION WAS UNDERLINED BY THE FACT THAT LARGE QUANTITIES OF FRENCH CEREALS HAD BEEN PURCHASED AND TRANSPORTED TO GERMANY WHERE THEY WERE IMMEDIATELY OFFERED FOR INTERVENTION . TAKING THE MONETARY SITUATION INTO ACCOUNT, IT WAS IMPOSSIBLE TO FORESEE AN END TO THIS SITUATION, SO THAT THERE WERE APPREHENSIONS LEST IT PERSIST THROUGHOUT THE SEASON 1969/70, WITH THE SAME DISTURBING INFLUENCE ON TRADE IN THE COMMUNITY . SUCH A SITUATION WAS EQUALLY AT VARIANCE BOTH WITH THE OBJECTIVE SET OUT IN ARTICLE 2 OF THE TREATY, WHICH STATES THAT THE COMMUNITY SHALL HAVE AS ITS TASK " TO PROMOTE THROUGHOUT THE COMMUNITY A HARMONIOUS DEVELOPMENT OF ECONOMIC ACTIVITIES ", AND THE AIM OF THE COMMON AGRICULTURAL POLICY DESCRIBED IN ARTICLE 39 OF THE TREATY, IN PARTICULAR THAT OF STABILIZING MARKETS . IN THAT RESPECT THE ORGANIZATION OF THE CEREALS MARKET, AS ESTABLISHED BY REGULATION NO 120/67/EEC CORRESPONDED WITH THESE OBJECTIVES, SINCE THE SIXTH RECITAL OF THAT REGULATION DECLARES THAT " FREE MOVEMENT OF CEREALS WITHIN THE COMMUNITY SHOULD ENABLE SURPLUSES IN PRODUCTION AREAS TO BE OFFSET AGAINST REQUIREMENTS IN DEFICIT AREAS ", AND STATES THAT THE MECHANISM OF THE INTERVENTION PRICES HAD BEEN FIXED " SO AS NOT TO IMPEDE SUCH OFFSETTING ". A SITUATION WHICH COULD HAVE CAUSED THE GERMAN INTERVENTION AGENCY TO PURCHASE FRENCH CEREALS TO SEND BACK TO FRANCE FOR STORAGE, CONTRADICTED THESE OBJECTIVES .
12 IN THESE CONDITIONS IT WAS OPEN TO THE COMMISSION TO JUDGE THAT THERE WERE DIFFICULTIES SUFFICIENTLY SERIOUS AND LIABLE TO PERSIST TO JUSTIFY RECOURSE TO ARTICLE 226 . EVEN IF THE MEANS OF STORAGE AVAILABLE TO THE GERMAN INTERVENTION AGENCY SUFFICED FOR THE QUANTITIES OF THE SEASON 1968/69, THE INCREASE PARTLY DUE TO ARTIFICIAL CAUSES IN TENDERS FOR INTERVENTION PURCHASE WAS NONE THE LESS SUCH AS TO JUSTIFY THE FEARS OF THE COMMISSION REGARDING THE PROSPECTS FOR THE SEASON 1969/70, WHICH WOULD HAVE BEGUN UNDER ABNORMAL CONDITIONS, IF THE MONETARY SITUATION PERSISTED .
13 THE DISPUTED DECISION, THEREFORE, CANNOT BE IMPUGNED ON THIS GROUND . 2 . ON THE EFFICACY OF THE PROTECTIVE MEASURES AUTHORISED
14 BY ARTICLE 226 OF THE TREATY THE PROTECTIVE MEASURES WHICH ARE AUTHORIZED SHOULD " RECTIFY THE SITUATION AND ADJUST THE SECTOR CONCERNED TO THE ECONOMY OF THE COMMON MARKET ". THE PLAINTIFF IN THE MAIN ACTION CLAIMS THAT LIMITING INTERVENTION PURCHASES BY THE FEDERAL REPUBLIC OF GERMANY TO CEREALS HARVESTED IN GERMANY WAS IN NO WAY LIKELY TO STOP THE INCREASE IN TENDERS OF FRENCH CEREALS, AS THAT INCREASE WAS CAUSED BY THE DISTURBANCE OF THE MONETARY SITUATION AND THEREFORE REQUIRED APPROPRIATE MONETARY REMEDIES . CONSEQUENTLY, LIMITATION OF INTERVENTION PURCHASES TO HOMEGROWN CEREALS ONLY CAUSED A CHANGE IN THE OFFERS FOR INTERVENTION PURCHASE, IN THAT NON-HOMEGROWN CEREALS SIMPLY REPLACED ON THE MARKET THE HOMEGROWN CEREALS WHICH WERE OFFERED FOR INTERVENTION .
15 DUE TO THEIR LIMITED COMPETENCE IN MONETARY MATTERS, THE COMMUNITY AUTHORITIES COULD NOT HAVE EMPLOYED APPROPRIATE MONETARY MEASURES TO COUNTERACT THE CAUSE OF THE SAID DIFFICULTIES . FURTHERMORE, ARTICLE 226 CANNOT BE INTERPRETED AS REQUIRING, BY PREFERENCE, PROTECTIVE MEASURES WHICH WERE AIMED AT REMOVING THE BASIC CAUSES OF THE DIFFICULTIES WHICH OCCASIONED THE REQUEST FOR AUTHORIZATION . SINCE IT COULD NOT CONTROL THE MONETARY SITUATION THE COMMISSION CONSIDERED THAT IT WAS IMPORTANT TO PRESERVE THE ORGANIZATION OF THE COMMON MARKET IN THE CEREALS SECTOR AGAINST THE CONSEQUENCES OF SUCH A SITUATION BY AUTHORIZING MEASURES CAPABLE OF RESTRAINING THE INFLUX OF FRENCH CEREALS INTO THE OTHER MEMBER STATES .
16 THE ARGUMENT THAT GERMAN SPECULATORS WOULD THENCEFORTH HAVE OBTAINED SUPPLIES OF FRENCH CEREALS EXCLUSIVELY, AND TENDERED THEIR STOCKS OF GERMAN CEREALS FOR INTERVENTION, DISREGARDS THE FACT THAT SUCH OPERATIONS REQUIRE FRENCH CEREALS, WHICH WERE EXCLUDED FROM INTERVENTION, TO BE AVAILABLE AT A PRICE SUFFICIENTLY LOW TO ENSURE THAT SUCH TRANSACTIONS CONTINUE TO BE PROFITABLE . THERE IS THEREFORE REASON TO CONSIDER THAT THE EXCLUSION OF THE SAID CEREALS FROM INTERVENTION HAD CONSEQUENCES OF SUFFICIENT IMPORTANCE TO CAUSE THE TRADE TO RESTRICT ITS OPERATIONS .
17 IT FOLLOWS THAT THE VALIDITY OF THE DISPUTED DECISION CANNOT BE IMPUGNED ON THIS GROUND; 3 . ON THE QUESTION WHETHER THE MEASURES AUTHORIZED OCCASIONED THE LEAST POSSIBLE DISTURBANCE TO THE FUNCTIONING OF THE COMMON MARKET
18 DUE TO THE NATURE OF THE DIFFICULTIES TO BE FACED AND THE OBJECTIVE OF THE DECISION, THE COMMISSION' S CHOICE OF MEASURES OCCASIONING THE LEAST POSSIBLE DISTURBANCE TO THE FUNCTIONING OF THE COMMON MARKET CANNOT BE APPRAISED SOLELY BY MEANS OF A COMPARISON OF DIFFERENT MEASURES CAPABLE OF SOLVING THE STORAGE PROBLEMS OF THE GERMAN INTERVENTION AGENCY .
19 AS THE MOST IMPORTANT FACTOR WAS TO RESTRICT THE INFLUX OF FRENCH CEREALS, MEASURES SUCH AS GRANTING DENATURING PREMIUMS OR REFUNDS FOR EXPORTS TO THIRD COUNTRIES, AND THE APPLICATION OF THE MECHANISMS PROVIDED FOR IN ARTICLE 8 OF REGULATION NO 120/67/EEC MIGHT BE CONSIDERED INSUFFICIENT; AS THEY REQUIRED FINANCIAL CHARGES ALL THE GREATER SINCE THEY HAD TO BRING ABOUT AN ACCELERATED SOLUTION TO THE STORAGE PROBLEM, SUCH MEASURES WOULD HAVE CONTRIBUTED NOTHING TOWARDS REMEDYING THE REAL DIFFICULTIES; FURTHERMORE, FRENCH CEREALS WERE NOT EXCLUDED FROM THE INTERVENTION MECHANISM, SINCE THEY COULD STILL BE OFFERED TO THE FRENCH INTERVENTION AGENCY; IN THESE CIRCUMSTANCES, IT WAS OPEN TO THE COMMISSION TO CONSIDER THAT THE MEASURES AUTHORIZED OCCASIONED LEAST DISTURBANCE TO THE FUNCTIONING OF THE COMMON MARKET, SO THAT THE VALIDITY OF ITS DECISION CANNOT BE IMPUGNED ON THIS GROUND;
20 THERE IS NO FACTOR AMONGST THE PRECEDING GROUNDS OF SUCH A NATURE AS TO IMPUGN THE VALIDITY OF THE DECISION OF 8 MAY 1969 . II - ON THE INTERPRETATION OF THE DECISION OF 8 MAY 1969
21 IT EMERGES FROM THE ORDER THAT THE SECOND QUESTION IS WHETHER, IN AUTHORIZING THE FEDERAL REPUBLIC OF GERMANY TO LIMIT HER OBLIGATIONS ARISING FROM ARTICLE 7 ( 1 ) OF REGULATION NO 120/67/EEC, THE DECISION DIRECTLY RELEASED THE ADMINISTRATIVE AUTHORITIES FROM THEIR OBLIGATION TO PURCHASE FRENCH CEREALS;
22 BY ARTICLE 226 A MEMBER STATE MAY APPLY FOR AUTHORIZATION TO TAKE PROTECTIVE MEASURES, AND THE COMMISSION SHALL THEN DETERMINE ACCORDING TO THE REQUIREMENTS OF THE SITUATION THOSE WHICH IT CONSIDERS NECESSARY, SPECIFYING THE CIRCUMSTANCES AND THE MANNER IN WHICH THEY ARE TO BE PUT INTO EFFECT . IT FOLLOWS THAT THE COMMISSION' S DECISION ONLY CONSTITUTES AN AUTHORIZATION ADDRESSED TO THE MEMBER STATE IN QUESTION, PERMITTING IT TO ADOPT THE MEASURES SANCTIONED THEREIN; THE MANNER IN WHICH THE DECISION IS TO BE CARRIED OUT MUST THEREFORE FALL WITHIN THE PROVINCE OF NATIONAL LAW;
23 THE REPLY MUST THEREFORE BE THAT THE SOLE EFFECT OF THE DECISION OF 8 MAY 1969 WAS TO AUTHORIZE THE MEMBER STATE TO WHOM IT WAS ADDRESSED TO REQUIRE THE MEASURES SANCTIONED THEREIN TO BE ADOPTED BY ITS COMPETENT AUTHORITIES .