Commission of the European Communities v French Republic (Judgment): ECJ 10 Dec 1969

Europa 1. Member states of the European communities – exclusive powers – exercise derogating from the provisions of the treaties – conditions imposed by the treaties 2. Member states of the EEC – failure to fulfil an obligation arising from the treaty – finding by the commission – allegation that the commission has intervened in a sphere reserved to the member state concerned – lack of a legal basis for a binding measure – review by the court (EEC treaty, article 169) 3. Aids granted by states – rate of preferential rediscount for exports – granted for national products exported – nature of the aid (EEC treaty, article 92) 4. Member states of the EEC – unilateral actions authorized by the treaty as a precaution – necessity for rapid intervention by the community institutions. 5. Economic policy – balance of payments – sudden crisis – protective measures – nature of unilateral action – obligations of the member state concerned (EEC treaty, article 109) 6. Member states of the EEC – failure to fulfil an obligation arising from the treaty – reasoned opinion addressed by the commission to the member state concerned – submission based on the illegality of this opinion – inadmissibility (EEC treaty, article 109) 7. Adverse effect upon the conditions of competition – action by a member state of the ECSC – damaging effect – aid to undertakings in the coal and steel sector – concept – authorization by the commission – rate of preferential rediscount for exports – nature of aid within the meaning of article 67(2) of the ECSC treaty 8. Member states of the ECSC – failure to fulfil obligation arising from the treaty – finding by the commission – subject-matter (ECSC treaty, article 88) 9. Member states of the ECSC – failure to fulfil an obligation arising from the treaty – finding by the commission – action by the member state concerned – subject-matter – different from that of action for annulment under article 33 of the ECSC treaty (ECSC treaty, article 88). 1. In the exercise of their reserved powers, member states can derogate from the obligation imposed on them by the provisions of the European treaties only on the conditions laid down in the treaties themselves. 2. If in proceedings for failure by a state to fulfil an obligation, the state alleges that the decision which it has not honoured has been taken in a sphere which belongs exclusively to its own jurisdiction, the court must investigate this allegation even if the decision has become definitive. Such an investigation accords with a fundamental requirement of the legal system for should the allegation prove correct the decision would lack all legal basis in the community system. 3. A preferential rediscount rate for exports, granted by a state in favour only of national products exported and for the purpose of helping them to compete in other member states with products originating in the latter, constitutes an aid within the meaning of article 92 the observance of which it is the commission’s task to ensure. 4. In the event of unilateral action by a state derogating from the provisions of the treaty but authorized by the treaty as a precaution, intervention by the community institutions as soon as possible meets a fundamental requirement for the functioning of the common market. 5. A state which takes advantage of the exceptional power contained in article 109(1) of the EEC treaty takes a unilateral measure of an exceptional and temporary nature which derogates from the provisions of the treaty. It follows from the very nature of such a measure that it involves for that state the obligation of informing the commission and the other member states immediately – or not later than when such measures enter into force – and of making express reference to this provision. 6. The reasoned opinion sent by the commission to a member state when it considers that this state has failed to fulfil an obligation under the treaty, constitutes the pre-litigious stage of a procedure which may lead to an action before the court of justice. The assessment of the validity of the action itself which the commission may bring before the court of justice under article 169. It is not therefore possible to plead only the illegality of the opinion. 7. The second subparagraph of article 67(2) of the ECSC treaty in providing for situations enabling the commission to authorize member states, in derogation from article 4, to grant aid, does not distinguish between aid specific to the coal and steel sector and aid which applies to it as the result of a general measure. A preferential rediscount rate for exports therefore constitutes aid which, within the meaning of article 67, must be authorized by the commission in so far as it concerns the coal and steel sector. 8. The sole objective of the commission’s reasoned decision under article 88 of the ECSC treaty is to record the state’s failure to fulfil a pre-existing obligation and to set a final time limit for it to comply therewith. 9. Although a state which is accused of failure to fulfil an obligation is entitled to dispute by means of the procedure of article 88 the new conditions of implementation which the decision has set it, such power cannot result in re-opening the question of the legality of the measure, which the state has not complied with, after the expiry of the period for bringing proceedings for annulment.

Citations:

C-6/69

European

Updated: 10 April 2022; Ref: scu.131990