Commission of the European Communities v Kingdom of Belgium (301/81)

III —Submissions and arguments of the parties

In the Commission's view, the mandatory nature of directives means that the Member States must observe the time limits which they lay down for the adoption of national implementing provisions. Disregard of those time limits involves a breach of the Treaty, whichever national body is responsible, by its acts or omissions, for the nonimplementation. The Member State in question cannot find justification in reasons relating to national provisions or practices or particular circumstances of a national character.Those principles have consistently been upheld by the Court.In its statement of defence the Belgian Government commences by emphasizing the great difficulties of a technical, institutional and political nature which explain why in spite of the efforts made by the Belgian Government, the bill incorporating the directive into national law has not yet been lodged before the Parliament.The Belgian Government considers the Commission's application inadmissible and unfounded in law.As regards admissibility, the Belgian Government alleges that insufficient reasons are stated both for the application and the reasoned opinion of the Commission. No reference is made to the nature of the national legislative rules to be made to implement the directive, to parts of the directive already implemented in national law, to any national provisions incompatible with the directive, to the measures contemplated by the Belgian Government for incorporating the purport of the directive in wider legislation or to the difficulties encountered by the Belgian State in view of the necessarily long duration of its legislative process and the specific difficulties confronting Belgium. In addition, the Belgian Government considers that the application and the reasoned opinion contain no evidence to show, not anly a degree of inertia or opposition by the Belgian State to the application of Community law within the prescribed periods, but also a failure in respect of the substantive provisions of the directive.The Belgian Government also considers that the application is inadmissible on the ground that the time limit fixed by the reasoned opinion was obviously insufficient and unreasonable.As regards the unfounded nature of the Commission's application, the Belgian Government alleges in the first place that it decided to use the occasion to clarify old rules, modernize the drafting, harmonize existing laws and translate into legislation rules arising from general principles of Belgian administrative law. As a result the bill satisfies an aim going well beyond strict implementation of the Community directive.In the second place, the Belgian Government submits that no provisions of law, regulation or general Belgian practice in force are contrary to the provisions of the directive. In addition, even before the directive was adopted Belgium amended its law to take account of certain provisions contained in the proposed directive submitted by the Commission to the Council. Even as regards the provisions of the directive which so far do not have their equivalent in national legislation properly so called, it is necessary to take account of the fact that the competent authorities already apply the requirements of those provisions on the basis of administrative rules of a general character and those administrative rules have been given sufficient publicity.It is therefore the opinion of the Belgian Government that the Community rules in question are already being observed and that the Belgian Government has incorporated them into a bill solely for reasons of formal coherence.In the third place, the Belgian Government emphasizes that Council Directive 77/780 raises problems of interpretation with regard to the very nature of the obligations which it imposes on Member States and with regard to the directly applicable nature of certain provisions. Those difficulties were expressly raised at a meeting which the Commission held in Brussels on 17 and 18 March 1980 in order to consider the problems involved in the implementation of the directive. The Belgian Government mentions in particular difficulties concerning the interpretation of the first and second subparagraphs of Article 2 (2) of the directive.In the fourth place, the Belgian Government mentions the particular difficulties arising in relation to the implementation of the directive with regard to public credit institutions and states that the Belgian Government decided not to have recourse to the possibilities of exemption or deferred application but to bring them in their entirety within the scope of the directive.Lastly, the Belgian Government maintains that the initial period of 24 months given for implementing the directive was patently inadequate. The negotiators of the directive were conscious thereof when they provided in Article 2 (4) (a) of the directive for a special system for institutions fulfilling certain conditions “no later than the date when the national authorities take the measures necessary to translate this directive into national law”. The inadequate nature of the period allowed was again confirmed by the problems of interpretation which arose in the Community in 1980, that is to say outside the periods laid down by the directive.In addition the Belgian Government emphasizes that the period allowed by the reasoned opinion (two months) was also too short and reveals a mechanical application of procedures incompatible with the aims pursued by the Treaty in conferring upon the Commission the power which it seeks to exercise in the present case.From the foregoing the Belgian Government concludes that in bringing the present proceedings the Commission has not taken account of the difficulties encountered by the Belgian Government, the absence of contradication between Community and Belgian law, the limited if not formal nature of the amendments coming within the power of the legislature, the Belgian Government's efforts to work out a set of rules implementing not only all the rules of the directive but sometimes going beyond the Community obligations.In its reply the Commission contests the Belgian Government's arguments to the effect that the application is inadmissible and, in any event, unfounded.As regards the submission that the reasoned opinion and the application do not contain a sufficient statement of the reasons on which they are based, the Commission states first of all that it has never considered that there was or could have been inertia or opposition on the part of the Belgian Government. In any event such inertia or opposition is not, in the Commission's view, a precondition for the admissibility of an action under Article 169. The admissibility of such an action is based solely on the objective factor of a State's failure to fulfil its obligations.Further, the Commission considers that the grounds of the application and reasoned opinion cannot be regarded as inadequate for failing to stipulate the scope of the implementing measures which ought to have been taken. Since the directive was quite clear in that respect, the measures required were perfectly well known to the Belgian Government, which had. never considered, before the ' action was brought, that its obligation was unclear. The Government has moreover expressly recognized that it was able to prepare a bill to submit to Parliament. In any event, the Commission considers that the reasoned opinion and the application are perfectly explicit and contain a sufficient statement of the reasons on which they are based, since they mention the defendant's obligation to implement the directive and its failure to fulfil that obligation.As regards the submission of inadmissibility which the Belgian Government makes on the ground that the period of two months laid down by the reasoned opinion was unreasonable, the Commission considers that there is some confusion between the period laid down by the reasoned opinion and the period allowed by the directive. The latter period, which was 24 months, was fixed by the Council following a unanimous decision and cannot be regarded as unreasonable or inadequate. As for the period laid down in the reasoned opinion, it is not a period for implementing the directive but simply a period in which those responsible for the failure were invited to make it good. In any event, the Commission emphasizes that the defendant in fact had some 48 months to implement the directive before the Commission brought the matter before the Court of Justice. The expiry of that period makes such an argument on this subject futile.As regards the arguments the arguments put forward by the Belgian Government in support of dismissal of the action, the Commission contends first of all that the alleged inadequacy of the period for implementing the directive cannot affect the merits of the action brought by the Commission, since, as the Court stated in its judgment in Case 52/75 (Commission v Italy [1976] ECR 277), in such a situation the only course of action compatible with Community law available to the Member State concerned consists in taking the appropriate initiatives within the Community in order to obtain the necessary extension of the period by the competent Community institution.In the second place, the Commission argues that the decision to make the aim of the Belgian bill wider than strict implementation of the directive is a choice which was clearly open to the Government but is not capable of justifying the delay in implementing the directive.In the third place, the Commission denies that the Community rules are already substantially observed. The defendant itself has drafted a bill and recognized in its statement of defence that amendments to the rules governing credit institutions are necessary in order to implement the directive. Moreover, the examples cited by the defendant in support of its argument that the Community rules are already substantially observed are not convincing.Be that as it may, the Commission submits that the defendant is in any event bound to take the proper measures to translate the principles of the directive into formal provisions of national law and thus satisfy the requirements of legal certainty. It refers in that respect to the judgment of the Court, of 6 May 1980 in Case 102/79 (Commission v Belgium, [1980] ERC 1473, at p. 1486).The Commission further states that even if Belgian administrative practice implements certain of the requirements of the directive, such a position in no way meets the requirement of legal certainty referred to above. In that respect it refers again to the abovementioned judgment of the Court of 6 May 1980.As regards the difficulties of interpretation alleged by the defendant, the Commission, without denying that there may be difficulties of interpretation on one or other point, maintains that no substantial divergence of opinion was observed at the meeting on 17 and 18 March 1980 organized by the Commission in order to consider the application of the directive.In any event, the Commission emphasizes that, even if the defendant were to establish that there were difficulties in determining the directly applicable nature of certain provisions of the directive, as it alleges, that would not exempt it from the obligation to adopt formal measures to receive the directive into the national legal system (aforesaid judgment of the Court'of 6 May 1980).Finally, as regards the special difficulties of a technical and political nature which the Belgian Government is alleged to have encountered, the Commission states that, according to numerous decisions of the Court, the defendant cannot justify its failure on grounds relating to national provisions and practices or special circumstances of an internal nature.In its rejoinder, the Belgian Government maintains that the “standard” grounds stated in the reasoned opinion and the Commission's application are inadequate inasmuch as they do not specify how the laws, regulations and administrative provisions in force in Belgium fail to satisfy the requirements of the directive and do not specify the provisions of the directive which are not being applied in Belgium. On that issue the Belgian Government cites the judgment of the Court in Case 7/61 (Commission v Italy, [1961] ECR 317).As regards the inadequate period allowed it, the Belgian Government states that, contrary to what the applicant thinks, the Belgian Government is not confusing the period allowed by the directive and that allowed by the reasoned opinion. It is the period of two months given by the reasoned opinion which it considers inadequate and unreasonable, especially as no allowance is made for the general context in which the problem of the implementation of the directive arose for all the Member States. In that respect, the Belgian Government refers to the view expressed by several academic writers that the period laid down in a reasoned opinion must be reasonable and must take account both of the nature of the breach and of the action necessary to terminate it.As regards the Belgian Government's decision to incorporate provisions concerning other aspects of policy in relation to credit institutions and their control into the bill implementing the directive, the Belgian Government insists that although such a procedure takes more time it is more logical and ultimately more in keeping with the spirit of Community law, which should fit harmoniously into a coherent national legal system. No objection can therefore be made to it.As regards its argument that the Community rules are already observed by the existing Belgian law, the Belgian Government contends first of all that, contrary to what the Commission seems to think, the existence of a bill is no evidence that Belgian law does not comply with Community law. In the present case the bill makes it possible to coordinate scattered texts, to clarify the law, to improve it and to supplement it on certain points not covered by the directive. However, that does not mean that the bill must be passed in order to prevent contradiction between Community law and national law.The Belgian Government maintains that the examples given in its statement of defence show that Belgian law complies with Community law, contrary to the contentions of the applicant, who does not discuss in detail the examples given.As regards more particularly the principle of legal certainty, the Belgian Government declares that it does not understand, and contends that the applicant has not shown, how Belgian law fails in that respect. It is, moreover, wrong to claim that Belgium is satisfied with administrative practices to implement the directive. In the present case it is a question, not of administrative practices, but of administrative rules of a general nature which have received adequate publicity.The Belgian Government maintains that implementation of the directive raises problems of interpretation. It states that, in its opinion, the arguments put forward by the Commission in its reply in relation to the directly applicable provisions are not such as to apply to the difficulties encountered in considering the directive.As regards the argument based on the difficulties raised by the application of the directive to public credit institutions in Belgium, the Belgian Government maintains that the Commission underestimates the difficulties which it is encountering in that sphere, even if as regards those institutions, just as in the case of the private institutions, the bill in preparation merely consolidates or clarifies applicable rules which are consistent with the directive.In conclusion the Belgian Government, after stating that a final opinion from the Conseil d'Etat has been given in respect of the abovementioned bill, which is now placed before Parliament, reiterates that the application is inadmissible and, in any event, unfounded.On 11 October 1982, in response to a request from the Court, the Belgian Government lodged a document at the Court Registry listing the various national provisions which, in its view, ensure the application of the directive in Belgian law.