Judgment_paragraph 44 · Republic of Finland v European Commission (T-124/14)

44In that regard, it is apparent from the first subparagraph of Article 71(3) of Regulation No 1698/2005 that the Member States are competent to establish ‘the rules on eligibility of expenditure’ within the framework of support for rural development by the EAFRD. Although that article may indicate that the Member States must, in principle, adopt, for that purpose, rules of general scope, it still cannot be inferred that those States have an unlimited discretionary power in establishing those rules, or that the rules must have a certain content. Above all, it is for the Member States to comply with the conditions and limits laid down by the EU rules which are specifically applicable in that context, and even constitute the specific legal basis of the legislative activity at issue. Such is the case of the second subparagraph of Article 55(1) of Regulation No 1974/2006, which constitutes the lex specialis in relation to the first subparagraph of Article 71(3) of Regulation No 1698/2005, but nevertheless leaves significant discretionary power to the Member States (see paragraph 33 above). Similarly, although Article 5(7) of that regulation, according to which ‘the Member States shall ensure that the operations financed by the EAFRD are in conformity with the [FEU] Treaty’, read in conjunction with Article 310(5) TFEU, requires the national authorities to cooperate in good faith with the Commission, in compliance with the principle of sound financial management, in order to implement the EU budget, those general obligations cannot provide useful information for the purposes of the contested interpretation of Article 55(1) of Regulation No 1974/2006.