Press and Information Division

PRESS RELEASE No 61/98

29 September 1998

Judgment of the Court of Justice in Case C-191/95

Commission v Germany

IN THE CONTEXT OF A PROCEDURE TO ESTABLISH THAT A MEMBER STATE HAS FAILED TO FULFIL ITS TREATY OBLIGATIONS, DECISIONS OF THE EUROPEAN COMMISSION TO ISSUE A REASONED OPINION AND TO COMMENCE COURT PROCEEDINGS ARE SUBJECT TO THE PRINCIPLE OF COLLEGIALITY

The Court of Justice has ruled on how the requirements of the principle of collegiality affect the Commission.

On 16 June 1995, the Commission applied to the Court for a declaration that, by failing to provide for appropriate penalties in cases where companies limited by shares fail to disclose their annual accounts, as required in particular by Directives 68/151/EEC and 78/660/EEC, Germany had failed to fulfil its obligations under the EC Treaty and under those directives.

With regard to the admissibility of the action, the German Government claimed that the Commission was in breach of the principle of collegiality when the reasoned opinion was issued and proceedings before the Court commenced, steps which were taken under the delegation procedure. It argued that, although recourse to that procedure was compatible with the principle of collegiality for the purpose of adopting measures of management or administration, it could not be used for decisions of principle such as the adoption of a reasoned opinion and the commencement of proceedings before the Court.

The German Government also claimed that the Commission had not established that the members of the college, when they decided to issue the opinion and to commence proceedings, had sufficient information available to them as regards the content of those measures. The college ought to have had available all the relevant information of fact and law to enable it to ensure that its decisions were unambiguous and to guarantee that the measures notified had actually been adopted by the college and in accordance with its intention, since it is the Commission as a whole which takes political responsibility for them.

The Commission stated that for reasons of efficiency, given the number of proceedings for failure to fulfil obligations, Commissioners did not have available draft reasoned opinions when adopting the decision to issue such measures; this was not necessary since reasoned opinions do not have immediate binding legal effect. However, the crucial information was available to the members of the Commission, in particular the facts complained of and the provisions of Community law which, in the view of the Commission's officials, had been breached. Thus the college reached its decision on the proposals of its officials to issue the reasoned opinion and to commence proceedings in full knowledge of the facts. Drafting of reasoned opinions takes place at administrative level, under the responsibility of the member of the Commission with competence in the matter, following the Commission's decision to take such a step.

The Court notes, first, that the functioning of the Commission is governed by the principle of collegiate responsibility. It is undisputed that decisions to issue a reasoned opinion and to commence proceedings are subject to that principle, based on the equal participation of the Commissioners in the adoption of decisions, from which it follows in particular that decisions should be the subject of collective deliberation and that all the members of the college of Commissioners should bear collective responsibility at political level for all decisions adopted.

Nevertheless, the formal requirements for effective compliance with the principle of collegiality vary according to the nature and legal effects of the acts adopted by the Commission. The issue of a reasoned opinion is a preliminary procedure, with no binding legal effect for the addressee of the reasoned opinion. The purpose of that pre-litigation procedure provided for by Article 169 of the Treaty is to enable the Member State to comply of its own accord with the requirements of the Treaty or, if appropriate, to justify its position. If that attempt at settlement is unsuccessful, the function of the reasoned opinion is to define the subject-matter of the dispute.

The Commission is not, however, empowered to determine conclusively, by reasoned opinions, the rights and duties of a Member State or to afford that State any guarantees that a given line of conduct is compatible with the Treaty. According to the system of the Treaty, the rights and duties of Member States may be determined and their conduct appraised only by a judgment of the Court. The reasoned opinion therefore has legal effect only in relation to the commencement of proceedings before the Court, so that where a Member State does not comply with that opinion within the period allowed, the Commission has the right, but not the duty, to commence such proceedings. The decision to commence proceedings, whilst an indispensable step for the purpose of enabling the Court to give judgment on the alleged failure to fulfil obligations by binding decision, nevertheless does not per se alter the legal position in question.

Both the Commission's decision to issue a reasoned opinion and its decision to bring an action for a declaration of failure to fulfil obligations must be the subject of collective deliberation by the college of Commissioners. The information on which those decisions are based must therefore be available to the members of the college. It is not, however, necessary for the full Commission itself formally to approve the acts which give effect to those decisions and put them in final form. In this case it is not disputed that the members of the Commission had available to them all the information which they considered necessary for the purposes of adopting the decision when the college decided, on 31 July 1991, to issue the reasoned opinion, and approved, on 13 December 1994, the proposal to bring the present action. In those circumstances, the Commission must be considered to have complied with the rules relating to the principle of collegiality when it issued the reasoned opinion to the Federal Republic of Germany and brought the court proceedings.

The Court found the action admissible in its entirety.

As regards the substance of the application, the Court referred to its judgment in Case C-97/96 Daihatsu Deutschland [1997] ECR I-6843 (Press Release No 75/97), in which it ruled that Directive 68/151/EEC was to be interpreted as precluding the legislation of a Member State from restricting to members or creditors of the company, the central works council or the company's works council the right to apply for imposition of the penalty provided for by the law of that Member State in the event of failure by a company to fulfil the obligations regarding disclosure of annual accounts laid down by that Directive.