Action brought on 8 March 2010 - Germany v Commission

(Case T-116/10)

Language of the case: German

Parties

Applicant: Federal Republic of Germany (represented by: J. Möller and U. Karpenstein, lawyer)

Defendant: European Commission

Form of order sought

Annul Commission Decision C(2009) 10675 of 23 December 2009 on the reduction of the assistance from the European Regional Development Fund (ERDF) granted by Commission Decision C(97) 1120 in respect of the Objective 2 programme Nordrhein-Westfalen (1997-1999) in the Federal Republic of Germany;

Order the Commission to pay the costs.

Pleas in law and main arguments

By the contested decision the Commission reduced the assistance granted from the ERDF in respect of the Objective 2 programme Nordrhein-Westfalen (1997-1999) in the Federal Republic of Germany.

The applicant relies on four pleas in law in support of its action.

By its first plea in law the applicant submits that the Commission erroneously assessed the factual situation. The applicant takes the view that the Commission included incorrect amounts in the calculation of the margin of error which it took as a basis.

In the second plea the applicant submits that the conditions for a financial correction in Article 24(2) of Regulation (EEC) No 4253/88 ¹ have not been met. The applicant takes the view that that provision does not give the Commission the right to make financial corrections in respect of administrative errors or ostensibly inadequate administrative and control systems. Furthermore, it is submitted that a financial correction in the amount assumed by the Commission is also out of the question for other reasons. First, 'irregularities', as complained of by the Commission in the present case, can justify financial corrections only if they have, or have had, a negative effect on the Union budget. According to the applicant, that was not the case as regards the conduct complained of by the Commission. Secondly, the applicant submits that, even on the substance, there is no infringement of Community law as regards a series of the projects complained of.

By its third plea the applicant submits that the Commission had no right under Regulation No 4253/88 to make flat-rate and extrapolated financial corrections. The applicant submits in that regard that the clear wording of Article 24 of that regulation relates to concrete cases and quantifiable amounts.

In its last plea the applicant submits that, even if it were to be assumed that flat-rate and extrapolated financial corrections are permitted, they are unlawful in the present case. In that regard it is submitted that the Commission did not explain the 'system-inherent nature' of the conduct of which it complained and that the flat-rate financial corrections do not comply with the principle of proportionality.

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¹ - Council Regulation (EEC) No 4253/88 of 19 December 1988, laying down provisions for implementing Regulation (EEC) No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 374, p. 1).