Opinion of Mr Advocate General Lenz delivered on 5 April 1984. # Eximo Molkereierzeugnisse Handelsgesellschaft mbH v Commission of the European Communities. # Action for damages - Failure to adjust export - Refunds for milk products. # Case 62/83.

1.

The defendant considers the action inadmissible in its entirety. It refers in the first place to the fact that according to the case-law of the Court the liability of the Community under the second paragraph of Article 215 is subsidiary to national compensation remedies. In its view the applicant has not exhausted all national remedies with regard either to the alleged damage resulting from the forfeiture of the security or to the damage alleged to have occurred in connection with the adjustment of the refunds.

2.

The Commission further argues that the action is also inadmissible because it is directed against the Commission alone and not also against the Council. According to the Commission, the alleged damage resulting from the failure to adjust the export refunds should also be attributed to the action of the Council in extending the milk year 1981/82 on several occasions.

That view is correct to the extent to which the Court has held that the correct defendant is that institution to which the action of the Community giving rise to liability is to be attributed. An action against the Community must accordingly in principle be directed against those institutions which in the applicant's view-have caused the damage. ( 6 ) In this regard the Commission is also correct to say that the application made by the applicant in its reply to supplement the designation of the defendant, in the alternative, so that the defendant is also represented by the Council, having its seat in Brussels, is inadmissible. Since such a claim cannot, according to Article 38 (1) of the Rules of Procedure, be raised as an alternative claim, and since the Council's right to defend itself would be curtailed, the Court correctly refused to include the Council in the proceedings at a later stage.

The fact that the Council is not a party to the proceedings does not however, in my view, make the action inadmissible. The applicant's claim is directed expressly against the action of the Commission which iff July 1982, in Regulation'No 1669/82, maintained the announced provision with regard to the time-limit, after the Council had extended the 1981/82 milk year several times. Since the applicant is challenging a measure of the Commission imposing charges, the Commission must in any event be regarded as a party liable to be sued.

1.

The applicant argues that it suffered damage for which the Community is liable as a result of legislative action on the part of the Commission. The Commission communication of 13 November 1981, published in the Federal Republic of Germany on 2 February 1982, which was of a legislative nature, was itself illegal. Contrary to the purpose of Article 5 (3) of Regulation No 876/68 of the Council, which is to give Community exporters a degree of certainty with regard to the stability of refunds, the Commission arbitrarily announced a provision fixing a time-limit. In the applicant's view, in order to avoid damage to persons affected in the Community, the Commission should at the latest in adopting Regulation No 1669/82 of 14 June 1982, by which the provision fixing the time-limit was introduced as previously announced, have taken into account the fact that the beginning of the milk year had been postponed several times for a short period. In maintaining the provision with regard to the time-limit the Commission improperly or at least incorrectly exercised the discretion conferred upon it, which related at most to the question whether or not to make an adjustment. By its illegal conduct the Commission has committed a breach of the principles, guaranteed by Community law, of economic freedom of action, protection of legitimate expectation and equality of treatment.

In reply the Commission denies having acted incorrectly, in particular with reference to the wide discretion which it enjoys in making decisions of economic policy. There can moreover be no question of breach of the principles referred to by the applicant.

2.

In. dealing with this dispute it must first be recalled that the Court has consistently held in regard to liability for legislative wrongs that a finding that a legislative act is illegal is not in itself sufficient to give rise to liability. As the Court has consistently held ( 7 ) the Community does not incur liability on account of a legislative measure involving choices of economic policy unless a “sufficiently serious breach of a superior rule of law for the protection of the individual” has occurred. “Only exceptionally and in special circumstances” can liability for legislative measures which are the result of choices of economic policy be admitted. In the HNL case, ( 8 ) the Court thus held that the legislative authority “cannot always be hindered in making its decisions by the prospect of applications for damages whenever it has occasion to adopt legislative measures in the public interest which may adversely affect the interests of individuals”. In that case and in later cases (cf. the Ireks-Arkady, DGV, Interquell and Dumortier Frères cases ( 9 )), the Court has accordingly held that liability can only and exceptionally be incurred when “the institution concerned has manifestly and gravely disregarded the limits on the exercise of its powers”. At the same time the Court has stressed niter alia in the HNL case ( 8 )“that individuals may be required, in the sectors coming within the economic policy of the Community, to accept within reasonable limits certain harmful effects on their economic interests as a result of a legislative measure without being able to obtain compensation from public funds even if that measure has been declared null and void”.

3.

The question whether a refund fixed in advance should be adjusted depends however on a decision of economic policy. That decision is characterized by a wide discretion essential for the implementation of the common agricultural policy. That such a discretion exists is made clear by Regulation (EEC) No 2732/71 of the Council of 20 December 1971 (Official Journal, English Special Edition 1971 (III), p. 1020), by which Article 5 (3) of Regulation No 876/68 was amended. The previous wording of that provision stated that the refund fixed in advance “shall” be adjusted according to changes in the threshold price and certain aids; the version in force since 1 January 1972, in contrast, reads as follows:

“It may be decided that the refund fixed in advance shall be adjusted if there is an alteration:

The imperative provision was thus replaced by a permissive provision, so that the wording of the regulation itself indicates the Commission's discretion. It is moreover clear from the preamble to the regulation that the Council considered the automatic adjustment of export refunds fixed in advance to be too rigid, and therefore replaced the imperative provision of the previous Article 5 (3) by a less strict provision which would “enable account to be taken of the situation on the Community market when adjustments are made”. The same recital further states that “adjustments decided on where possible before the entry into force of alterations to intervention prices may in particular ensure the continuity of export conditions from one milk year to the next”.

It cannot, then, be disputed that the Commission has a wide discretion to decide whether refunds fixed in advance should be adjusted after the fixing of new intervention prices, taking into account all relevant aspects of economic policy. It must also lie within that discretion, therefore, to decide what requirements and conditions shall be attached to such an adjustment.

In this regard the Court has no jurisdiction to judge the appropriateness of the provision with regard to the time-limit introduced by the Commission, but must restrict itself to the review of its legality. The provision is lawful if it is consistent with the purpose of the provision regarding adjustment.

As is clear from the preamble to Regulation No 2732/71, the purpose of Article 5 (3) of Regulation No 876/68 of the Council is so far as possible to ensure the continuity of export conditions from one milk year to the next. In order to relieve traders of their uncertainty whether or not use would be made of the possibility of adjustment at the beginning of the 1982/83 milk year, in November 1981 the Commission announced its intention to make use of the possibility of adjustment in order to enable traders to conclude contracts on that basis for delivery after the beginning of the new marketing year. When such an adjustment is announced, however, the danger cannot be excluded that contracts will be concluded on the basis of the published price proposals of the Commission and of relevant press reports regarding the expected new intervention prices, with the main purpose of exploiting such changes. Accordingly it was not inconsistent for the Commission, in order to prevent such speculative dealings, to state expressly in the announcement itself that the adjustment of refunds was to be restricted to those applications for advance fixing which were introduced more than 14 days before the change of the intervention prices.

Nor, from this point of view, can objection be made to the fact that the Commission did not refer the beginning of the 14-day period to a specific date, since from previous experience it could not be excluded that the beginning of the milk year might be delayed and that the risk of speculation would continue during this period.

Finally, contrary to the submission of the applicant, the Commission cannot be accused of having incorrectly used its discretion in adopting the legislative measures announced in the communication of November 1981 without regard to the altered requirements of economic policy in June 1982. If the Commission had departed from its announced intention in regard to the time-limit, it would in any event have laid itself open to the reproach of having failed to protect the legitimate expectation of all those traders who, relying on that communication, did not apply for advance fixing during the period in question.

4.

For those reasons the submission that the regulation in question, No 1669/82, is illegal must in my view be dismissed. According to the case-law set out above, even if the regulation were to be held illegal the Community could only and exceptionally incur liability if the Commission had manifestly and gravely disregarded the limits on the exercise of its powers. In that regard the Court has held that not only the extent of the incorrect exercise of discretion but also the effects of the defective legislative acts on the economic interests of individuals must be taken into account.