Orsolina Leonesio v Ministero dell'agricoltura e foreste (93/71)

Contents

In Case 93/71Reference to the Court under Article 177 of the EEC Treaty by the Pretore di Lonato for a preliminary ruling in the action pending before that court betweenORSOLINA LEONESIO, a farmer of Monica (province of Brescia, Italy),andMINISTRY FOR AGRICULTURE AND FORESTRY OF THE ITALIAN REPUBLIC,THE COURTcomposed of: R. Lecourt, President, J. Mertens de Wilmars and H. Kutscher (Rapporteur), Presidents of Chambers, A. M. Donner, A. Trabucchi, R. Monaco and P. Pescatore, Judges,Advocate-General: K. RoemerRegistrar: A. Van Houttegives the following

Judgment

Issues of fact and of law

I —Facts and procedure

The facts and procedure may be summarized as follows:1.A. In accordance with its basic Regulation No 805/68 of 27 June 1968 on the common organization of the market in beef and veal (OJ English Special Edition 1968(1), p. 187) the Council adopted on 6 October 1969Regulation No 1975/69, Article 1 of which provides that ‘Farmers having at least two milk cows may, on application, receive a subsidy for slaughtering on the conditions specified below’, that is to say in Articles 2 to 4 of the same regulation.Under Article 9 the detailed rules for the application of the abovementioned article were to be established ‘in accordance with the procedure provided for in Article 27 of Regulation (EEC) No 805/68’, that is to say, by the Commission acting on the opinion of the Management Committee. Article 10 provides that ‘The Member States may be authorized, according to the procedure laid down in Article 27 of Regulation (EEC) No 805/68, to impose additional conditions for the grant of the subsidies …’Article 12(1) provides that “The European Agricultural Guidance and Guarantee Fund, Guidance Section, shall reimburse the Member States 50 % of the subsidies”.B. On 4 November 1969, the Commission, on the basis of Regulation No 1975/69, adopted Regulation No 2195/69.Articles 3 to 9 and 11 of that regulation relate to the formalities to be completed both by the individual concerned and by the Community and the Member States for slaughtering and payment of the subsidy in each particular case.Article 10 provides that the payment of the subsidy “shall take place within two months of the establishment of proof of the slaughtering in accordance with Article 9 of this regulation”.Article 19 provides that the Member States shall be authorized within the limits set out in that article to impose additional conditions for the grant of the subsidy.2. By a circular of 23 March 1970 the Italian Ministry for Agriculture and Forestry gave to the regional authorities instructions relating to the rules for the application of the said regulations, whilst stating that the actual implementation of those regulations was subject to the adoption of the necessary budgetary provisions and the administration could, in the meantime, only issue “provisional authorization” to slaughter.In 1970 Mrs Leonesio, a farmer, slaughtered five milk cows and sought from the competent authorities of the province of Brescia the grant of a subsidy of Lit. 625000. In accordance with the abovementioned circular this subsidy was granted to her by way of a “provisional authorization” issued on 22 May 1970, payment being subject “to compliance with the technical conditions laid down” and “the adoption by the Italian Parliament of the legislative provisions making the necessary allocations”.At the beginning of November 1971, believing that she had complied with all the necessary conditions, Mrs Leonesio brought an action before the Pretore, Lonato, under Articles 633 et seq. of the Italian Code of Civil Procedure for a decree of injunction ordering the Ministry for Agriculture and Forestry to pay the subsidy.3. By an order of 3 November 1971, the Pretore di Lonato decided to ask the Court of Justice:(a) Whether the provisions of Regulation No 1975/69 and of Regulation No 2195/69 are directly applicable in the Italian legal system and, if this question is answered in the affirmative, whether they create individual rights which national courts must protect ;(b) If the above question is answered in the affirmative, whether, in view of the provisions of Article 10 of Regulation No 2195/69, the provisions of Articles 1 to 4 of Regulation No 1975/69 and of Articles 3 to 11 of Regulation No 2195/69 must be interpreted as meaning that they have created individual pecuniary rights immediately enforceable against the State such that national legislation can have no influence whatever as to the period for payment and whether consequently this pecuniary right cannot be made subject to certain conditions but must be afforded immediate protection by the national court where:— in application of Article 5(1) of Regulation No 2195/69 it has been established that applications for the. grant of the slaughtering subsidy may be allowed to proceed (this finding having been made in the prescribed manner on 26 January 1970 by Regulation (EEC) No 140/70 of the Commission published in the JO L 20, of 27.1.1970, p. 6);— the conditions set out in Articles 5(2) and 6 of Regulation No 2195/69 have been fulfilled;— the proof of slaughter of milk cows mentioned in Article 9 of Regulation. No 2195/69 has been produced.”4. The order making the reference was received at the Court Registry on 17. November 1971. Mrs Leonesi, the Government of the Italian Republic and the Commission of. the European Communities submitted written observations in accordance with Article 20 of the Protocol on the Statute of the Court of Justice.Upon hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided to dispense with a preparatory inquiry.Mrs Leonesio, the Italian Government and the Commission presented oral argument at the hearing on 15 March 1972.Mrs Leonesio was represented by Cesare Trebeschi, Carlo Cappelli and Emilio Cappelli, of the Rome Bar, the Italian Government by Adolfo Maresca, Minister Plenipotentiary, assisted by Giorgio Zagari, Deputy State Advocate-General and the Commission by its Legal Adviser, Armando Toledano-Laredo.The Advocate-General delivered his opinion at the hearing on 26 April 1972.

II —Observations submitted in accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

The observations submitted in accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:Mrs Leonesio states that the provisions of Regulations Nos 1975/69 and 2195/69 providing for the grant of slaughtering subsidies are of à “legally perfect” nature within the meaning of the decided cases of the Court relating to the direct effect of Community provisions. Under Article 9 of Regulation No 1975/69 the Commission alone is competent to determine the detailed rules of application to be observed for the actual payment of the subsidy. Article 10 of that regulation prohibits the national authorities from imposing additional conditions for the grant of subsidies without the prior authorization of the Commission. The Commission set out the detailed rules for application in rigid and comprehensive. terms and the national authorities were only empowered to collect the applications and to verify certain facts.In fact the Commission, not the Member States, had a discretionary power in that it was in a position to decide whether. applications made should be allowed to proceed or not (Article 5(1) of Regulation No 2195/69). However, once this decision had been taken, which was done by Regulation No 140/70, there remained no discrétionary power with regard to its execution, which was to be carried out by the national authorities. Indeed the payment of the subsidy which had to be carried out within the period laid down in Article 10 of Regulation No 2195/69 was only subject to the actual existence of milk cows, to the undertaking to cease milk production and to proof of slaughter. The relevant regulations do not provide that any authorization may be granted by the Member State concerned.In the final analysis the duty to pay the subsidy is enshrined in the Community legal order and therefore the intervention of the national authorities should go no further than establishing the existence of the fact giving rise to that duty.The action by a Member State of rendering the application of a regulation subject to the adoption of a national law is incompatible with Article 189 of the Treaty. It is true that there exists a theory in Italy that pecuniary rights against the State are only enforceable after the allocation of the necessary funds, irrespective of any period which may be fixed for their payment; however, lest discrimination be introduced between nationals of different Member States such a theory cannot be accepted with regard to financial obligations at a Community level. Further, the Court has stated that “The complexity of certain situations in a State cannot alter the legal nature of a Community provision which is directly applicable, and this is particularly the case considering that the Community rule must have the same binding force in all Member States”, and that the national courts must ‘protect the interests of those persons subject to their jurisdiction who may be affected by any possible infringement of the said provisions, by ensuring for them direct and immediate protection of their interests no matter what the existing relationship may be under national law between those interests and the public interest to which the question refers’ (Judgment of 19 December 1968, Case 13/68 Salgoil v Italy, [1968] ECR 453 at pp. 462 and 463).Whilst it is true that on 22 November 1971, that is, after the matter was referred to the Court of Justice, there was published in the ‘Gazzetta Ufficiale’ of the Italian Republic Law No 935 of 26 October 1971, the implementation of which may satisfy the claims of the applicant, nevertheless, in accordance with the judgment of the Court of 14 December 1971 (Case 43/71 Politi v Italian Ministry of Finance [1971] ECR 1039) this alteration in the domestic law has no effect on the jurisdiction of the Court to decide on the reference from the Pretore di Lonato.Finally therefore, in the applicant's view, the first question of the Pretore di Lonato should be answered in the affirmative. With regard to the second question the Court should rule that the provisions in question create individual pecuniary rights against the State such that national legislation can have no influence on the detailed rules for the application and the period for the execution of the duty imposed on the State and that they give to individuals entitled to subsidies the right to protection from the detrimental effects which might result from delay in compliance.The Italian Government states first that Law No 935, mentioned above, authorized the payments due from the Italian State under the regulations in question. Therefore the main action has in fact lost its purpose.Those regulations did not have immediate effect to the benefit of individuals because they required the adoption of implementing measures by the Member States, if only to determine the bodies empowered to apply them and to make the necessary funds available to the administration. In particular, Article 81 of the Italian constitution stipulates that any law providing for any new payment must make provision for the financial means to undertake it; the same also applies in respect of Community rules having the force of law in Italy. This is moreover an automatic requirement.As to the second question from the Pretore di Lonato, it may be understood as being merely a paraphrase of the first question. But it could also be interpreted as relating to the relationship between the Community rule and national law as it uses the expression ‘immediately enforceable pecuniary right’ which is contained in Article 633 of the Italian Code of Civil Procedure providing for a ‘decree of injunction’ (‘decreto ingiuntivo’) in favour of the person entitled to such a right. According to the Italian Government, this interpretation may be confirmed by a paragraph of the preamble to the order making the reference stating that, if the questions referred to the Court are answered in the affirmative, ‘the conditions required by the law for the execution of the injunction would be fulfilled since the action is based on written evidence’.If this interpretation is correct the question does not fall within the jurisdiction of the Court since it is thereby invited to interpret national law. Indeed the expression ‘immediately enforceable pecuniary right’ is not part of Community law and it might have a different meaning in the legal system of each Member State.Similar considerations would arise in so far as the Court as asked to rule whether ‘this pecuniary right may not be made subject to certain conditions’ by the State concerned. Either this question asks the Court to utter a truism, that is, that the legislature cannot extinguish subjective rights created by Community rules; or it seeks to know whether any national measure intended to determine the factual conditions for enjoyment of the individual right in question is incompatible with the Community provisions giving rise to that right. In the latter case, the question as it is put also exceeds the jurisdiction conferred on the Court by Article 177 of the Treaty since it asks the Court to rule on the compatibility of Italian legislation with Community rules.As to the substance of the case, the Pretore di Lonato seems to disregard the fact that whilst the regulations in question create individual rights as against Member States, nevertheless those rights can only be relied on within the context of national budgetary legislation. Measures adopted by the authorities of the Member States to permit the satisfaction of those rights are compatible with Community law.The Commission states first that in view of the substantial delay in the payment of the slaughtering subsidy on 21 June 1971 it sent to the Italian Government a letter initiating the procedure laid down by Article 169 of the Treaty.The questions put by the Italian court are not outside the jurisdiction of the Court.The answer to these questions is in the affirmative. In the abovementioned judgment in Politi the Court accepted that all Community regulations ‘have direct effect and are as such capable of creating individual rights which national courts must protect’. It is true that in this case it is for the Member States to take certain implementing measures. However, those measures may not constitute an obstacle to the direct applicability of the Community rule or influence in any way the rights which that rule grants to individuals. This is all the more so as Article 10 of Regulation No 2195/69 imposes on Member States the obligation to pay the subsidy within a period which is precisely fixed and may not be altered. It appears from the seventh recital of the preamble to Regulation No 2195/69 that the period was imposed particularly to ensure that the subsidy should be paid within the same period in all the Member States.Finally, no Member State made use of the opportunity provided by Article 10 of Regulation No 1975/69 of asking the Commission to authorize it to impose additional conditions for the grant of the subsidies in question.

Grounds of judgment

1(1) By order of 3 November 1971, received at the Court Registry on 17 November 1971, the Pretore di Lonato has referred to the Court two questions concerning the interpretation of Regulation (EEC) No 1975/69 of the Council of 6 October 1969 and of Regulation (EEC) No 2195/69 of the Commission of 4 November 1969 relating principally to the grant of subsidies to farmers for slaughtering their milk cows.

2The first question asks the Court to rule ‘Whether the provisions of Regulation No 1975/69 and of Regulation No 2195/69 are directly applicable in the Italian legal system and, if this question is answered in the affirmative, whether they create individual rights which national courts must protect’.The second question asks, in essence, whether, where the conditions set out in Article 5(1) and (2) and in Articles 6 and 9 of Regulation No 2195/69 have been fulfilled, those regulations, in so far as they are concerned with the slaughtering subsidy, confer on the farmer concerned a right as against the Member State to which he belongs to the payment of that subsidy, this being a right to which the national court must afford immediate protection and which that State cannot render subject to additional conditions, in particular as to the period allowed for payment under Article 10 of Regulation No 2195/69.

3These questions were referred to the Court in view of the fact that the plaintiff in the main action believed that she had complied with all the conditions to which the abovementioned regulations render subject the grant of a subsidy for slaughtering milk cows and had brought before the Pretore di Lonato an application for an injunction ordering the Italian Ministry for Agriculture and Forestry to pay the subsidy. Moreover it appears from the documents in the case that the national authorities, while granting the subsidy on a ‘provisional authorization’, suspended payment on the ground that it was subject to the prior adoption by the Italian Parliament of legislative provisions allocating the necessary funds.

4Since these two questions are closely connected a joint reply may be given to them.

5(2) The second paragraph of Article 189 of the Treaty provides that a regulation shall have ‘general application’ and ‘shall be … directly applicable in all Member States’.Therefore, because of its nature and its purpose within the system of sources of Community law it has direct effect and is, as such, capable of creating individual rights which national courts must protect.

6Since they are pecuniary rights against the State, these rights arise when the conditions set out in the regulation are complied with and it is not possible at a national level to render the exercise of them subject to implementing provisions other than those which might be required by the regulation itself.It is in the light of these considerations that the questions put should be answered.

7(3) With regard to the conditions which the farmer must fulfil in order to be able to claim payment of the subsidy, the authority obliged to pay the subsidy and the period within which payment must be made, reference should be made to Articles 1 to 4 and 12 of Regulation No 1975/69 and to Articles 3, 7, 9 and 10 of Regulation No 2195/69.

8Article 1 of Regulation No 1975/69 provides that ‘Farmers having at least two milk cows may, on application, receive a subsidy for slaughtering on the conditions specified below’, set by Article 3(1) of that regulation at 200 u.a. for each milk cow slaughtered.

9Article 2 of that regulation provides that ‘The granting of the subsidy is, in particular, subject to the written undertaking of the recipient: (a) to give up the production of milk entirely and (b) to have all milk cows on his farm slaughtered during a period to be determined and at the latest by 30 April 1970’.

10Article 4(1) of the same regulation provides that ‘For farmers having two to five milk cows the subsidy shall be paid when the applicant submits proof that he has fulfilled the undertaking referred to in Article 2(b)’.

11Article 12 of the regulation states that the ‘European Agricultural Guidance and Guarantee Fund, Guidance Section, shall reimburse the Member States 50 % of the subsidies’ concerned, thereby implying that the Member States are to pay these subsidies to the farmers.

12According to Article 3 of Regulation No 2195/69 ‘The application for the grant of the subsidy shall be lodged with the competent authority appointed by each Member State during the period from 1 to 20 December 1969’ and was to contain certain information and declarations.

13Article 7 of that regulation provides that ‘The slaughtering period referred to in Article 2(b) of Regulation (EEC) No 1975/69 shall last from 9 February to 30 April 1970’.

14Article 9 of the same regulation determines the manner in which the farmer must provide the proof laid down by Article 4(1) of Regulation No 1975/69.

15Article 10 of Regulation No 2195/69 states that ‘Payment of the subsidy referred to in Article 4(1) … of Regulation (EEC) No 1975/69 shall take place within two months of the establishment of proof of the slaughtering in accordance with Article 9 of this regulation’.

16It follows from Article 5 (1) of Regulation No 2195/69 that the grant of the subsidy was further subject to the finding by the Commission ‘that the applications lodged may be allowed to proceed’, which finding was made in respect of all applications submitted under Article 3 of that regulation, by Article 1 (a) of Regulation No 140/70.

17Article 10 of Regulation No 1975/69 empowers the Commission to authorize Member States ‘to impose additional conditions’ for the grant of the subsidy concerned and Article 19 of Regulation No 2195/69 sets out such conditions, requiring the Member States to notify the Commission in appropriate cases of the provisions adopted by them pursuant to that article.It is common ground however that Italy did not make use of this possibility.It is also established that the Italian Republic adopted the technical measures provided for by Articles 4, 5(2), 6, 8 and 11 of Regulation No 2195/69.

18(4) The effect of all these provisions is that once all the conditions laid down in Regulations Nos 1975/69 and 2195/69 were fulfilled, those regulations conferred on farmers a right, which national courts must protect, to payment of the slaughtering subsidy by the Member State to which they belonged; such rights could be exercised in each case at the end of the period of two months following the establishment of the proof of slaughter as provided in Article 10 of Regulation No 2195/69.

19As from that time, the abovementioned regulations give the farmer the right to require payment of the subsidy without that Member State's being able to rely on arguments based on any legislative provisions or administrative practices to withhold such payment.This finding is reinforced by the seventh recital of the preamble to Regulation No 2195/69 which emphasizes that ‘it should be ensured that subsidies are paid in all Member States within the same period’.

20Nevertheless, the Italian Government has stated that the regulations in question, did not create the right to payment of the subsidy where the national legislature had not allocated the necessary funds for this purpose.

21The first paragraph of Article 5 of the Treaty provides that ‘Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community’.If the objection of the Italian Government were upheld it would have the result of placing farmers in that State in a less favourable position than their counterparts in other Member States in disregard of the fundamental rule requiring the uniform application of regulations throughout the Community.Moreover, Regulations Nos 1975/69 and 2195/69 lay down exhaustively the conditions on which the creation of the individual rights in question depend and these do not include considerations of a budgetary nature.

22So as to apply with equal force with regard to nationals of all the Member States, Community regulations become part of the legal system applicable within the national territory, which must permit the direct effect provided for in Article 189 to operate in such a way that reliance thereon by individuals may not be frustrated by domestic provisions or practices.

23Budgetary provisions of a Member State cannot therefore hinder the direct applicability of a Community provision and consequently of the exercise of individual rights created by such a provision.

24The costs incurred by the Government of the Italian Republic and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,Upon reading the pleadings ;Upon hearing the report of the Judge-Rapporteur;Upon hearing the oral observations of Mrs Leonesio, the Government of the Italian Republic and the Commission of the European Communities;Upon hearing the opinion of the Advocate-General;Having regard to the Treaty establishing the European Economic Community, especially Articles 5, 177 and 189;Having regard to Regulation No 1975/69 of the Council of 6 October 1969 (JO L 252, p. 1);Having regard to Regulation No 2195/69 of the Commission of 4 November 1969 (JO L 278, p. 6);Having regard to the Protocol on the Statute of the Court of Justice of the EEC, especially Article 20;Having regard to the Rules of Procedure of the Court of Justice of the European Communities,THE COURTin answer to the questions referred to it by the Pretore di Lonato by order of that court dated 3 November 1971, hereby rules:

1.A Community regulation has direct effect and is, as such, capable of creating individual rights which national courts must protect.Pecuniary rights against the State, conferred by such a regulation, arise when the conditions set out in the regulation are complied with and it is not possible at a national level to render the exercise of them subject to implementing provisions other than those which might be required by the regulation itself.

2.Once all the conditions laid down in Regulations Nos 1975/69 and 2195/69 were fulfilled, those regulations conferred on fanners a right, which national courts must protect, to payment of the slaughtering subsidy by the Member State to which they belonged; such rights could be exercised in each case at the end of the period of two months following the establishment of the proof of slaughter as provided in Article 10 of Regulation No 2195/69.As from that time, the abovementioned regulations give the farmer the right to require payment of the subsidy without that Member State's being able to rely on arguments based on any legislative provisions or administrative practices to withhold such payment.

Delivered in open court in Luxembourg on 17 May 1972.