Case C‑557/10

European Commission

v

Portuguese Republic

(Failure of a Member State to fulfil obligations – Transport – Development of the Community’s railways – Directive 91/440/EEC – Article 5(3) – Rail transport undertakings – Freedom of management – Decisions on staff, assets and own procurement – Article 7(3) – Grant of financing to the infrastructure manager – Directive 2001/14/EC – Article 6(1) – Balancing the accounts – Appropriate conditions – Incomplete transposition)

Summary — Judgment of the Court (First Chamber), 25 October 2012

1.        Actions for failure to fulfil obligations — Examination of the merits by the Court — Situation to be taken into consideration — Situation on expiry of the period laid down in the reasoned opinion — Refusal of the application to stay proceedings with the adoption of measures able to ensure the compatibility of national law with European Union law

(Art. 258 TFEU)

2.        Transport — Common Policy — Development of the Community’s railways — Rail transport undertakings — Freedom of management — Obligation to privatise the railways — None — National regulations making individual decisions by those undertakings subject to government approval — Not permissible

(Council Directive 91/440, Arts 3, 4(1) and 5(3); European Parliament and Council Directives 2001/12, 2001/14 and 2007/58)

1.        See the text of the decision.

(see paras 24, 25, 41, 49)

2.        Directive 91/440 on the development of the community’s railways as amended by Directive 2001/12 and Directive 2001/14 on the allocation of railway infrastructure capacity and the buying of charges for the use of railway infrastructure and safety certification, as amended by Directive 2007/58 do not require railways to be privatised. Consequently, the incumbent rail operator may remain public.

However, Directive 91/440 and Directive 2001/12 lay down the need to ensure that railway transport undertakings, whether private or public, are given a status independent of the State, and freedom to manage their internal affairs. While it is true that Article 5(3) of Directive 91/440 allows the Member States to lay down general policy guidelines, the fact remains that, in order to meet the objective of management independence of railway transport undertakings, the State must not exercise any influence over the individual decisions made by those undertakings concerning the transfer or acquisition of assets.

Therefore, a Member State whose national legislation makes any individual decision concerning the transfer or acquisition of shares of companies subject to government approval, and thereby subjects such an undertaking to external political control which does not correspond in any way to the procedures and means of action and control available to shareholders a share company under private law, fails to fulfil its obligations under Article 5(3) of Directive 91/440.

(see paras 33, 37-39)