Court of Justice of the European Communities (including Court of First Instance Decisions)

(Agriculture Common organisation of the market in wine Aid for the restructuring and conversion of vineyards Regulation (EC) No 1493/1999 Fixing of the definitive financial allocations made to Member States Decision 2006/669/EC Binding nature of the time-limit in Article 16(1) of Regulation (EC) No 1227/2000 Principles of cooperation in good faith, good faith and sound administration, proportionality and effectiveness)

In Case T-339/06,

Hellenic Republic, represented by I. Chalkias and S. Papaioannou, acting as Agents,

applicant,

Commission of the European Communities, represented by H. Tserepa-Lacombe, M. Konstantinidis and F. Jimeno Fernández, acting as Agents,

defendant,

APPLICATION for annulment of Commission Decision 2006/669/EC of 4 October 2006 fixing, for the 2006 financial year and in respect of a certain number of hectares, the definitive financial allocations to Member States for the restructuring and conversion of vineyards under Council Regulation (EC) No 1493/1999 (OJ 2006 L 275, p. 62),

composed of M. Vilaras, President, M. Prek and V. Ciucă (Rapporteur), Judges,

Registrar: C. Kantza, Administrator,

having regard to the written procedure and further to the hearing on 10 July 2008,

gives the following

Legal context

1. The rules relating to the restructuring and conversion of vineyards are laid down by Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the market in wine (OJ 1999 L 179, p. 1) and Commission Regulation (EC) No 1227/2000 of 31 May 2000 laying down detailed rules for the application of Regulation No 1493/1999, as regards production potential (OJ 2000 L 143, p. 1), as amended.
2. Article 14 of Regulation No 1493/1999 provides:

'1. The Commission shall make initial allocations to Member States per year on the basis of objective criteria taking into account particular situations and needs, and efforts to be undertaken in the light of the objective of the scheme.

2. Initial allocations shall be adapted in view of real expenditure and on the basis of revised expenditure forecasts submitted by the Member States taking into account the objective of the scheme and subject to funds available.

...'

3. Article 16 of Regulation No 1227/2000 was amended inter alia by Commission Regulation (EC) No 1841/2003 of 17 October 2003 amending Regulation No 1227/2000 (OJ 2003 L 268, p. 58). Thus Article 16 of Regulation No 1227/2000 in the version applicable to the financial year 2006 provides:

'1. The Member States shall forward to the Commission, not later than 10 July each year in respect of the restructuring and conversion system:

(a) a statement of expenditure actually incurred at 30 June of the current financial year and the total area concerned;

(b) a statement of expenditure validated at 30 June of the current financial year and the total area concerned;

...

2. Without prejudice to the general rules established for budgetary discipline, where the information which Member States are required to transmit to the Commission according to paragraph 1 is incomplete or the time-limit has not been met, the Commission shall reduce advances on entry in the accounts of agricultural expenditure on a temporary and flat-rate basis.'

4. Article 17 of Regulation No 1227/2000 was amended inter alia by Commission Regulation (EC) No 315/2003 of 19 February 2003 (OJ 2003 L 46, p. 9) and by Commission Regulation (EC) No 1203/2003 of 4 July 2003 (OJ 2003 L 168, p. 9). Thus Article 17 of Regulation No 1227/2000 in the version applicable to the financial year 2006 provides:

'1. For each Member State, expenditure actually incurred, validated and declared for any given financial year shall be financed within the limits of the amounts notified to the Commission under Article 16(1)(a) and (b), provided that those amounts do not exceed in total the financial amount allocated to the Member State pursuant to Article 14(1) of Regulation ... No 1493/19991.

...

3. Requests made by Member States in accordance with Article 16(1)(c) shall be accepted on a pro rata basis, using the amounts available after deducting, for all Member States, the total of the amounts notified in accordance with Article 16(1)(a) and the amounts declared in accordance with Article 16(1)(b) from the total amount allocated to the Member States pursuant to Article 14 of Regulation ... No 1493/1999. The Commission shall notify the Member States as soon as possible after 30 June of the extent to which the requests may be accepted.

4. Notwithstanding paragraphs 1 and 2, where the total area notified in accordance with Article 16(1)(a) is less than the number of hectares indicated in the allocation for the financial year made to the Member State pursuant to Article 14(1) of Regulation No 1493/1999, then expenditure declared for the financial year in question shall be financed only up to a limit equal to the total area notified multiplied by the average amount of aid per hectare; this figure is calculated as a ratio between the amount allocated to the Member State pursuant to Article 14(1) of Regulation ... No 1493/1999 and the anticipated number of hectares.

This amount cannot in any event be greater than the expenditure declared in accordance with Article 16(1)(a).

For the purposes of implementing this paragraph, a tolerance of 5% shall be applied to the total area notified as compared with that appearing in the allocation for the financial year.

Amounts not financed under this paragraph shall not be available for the purpose of applying paragraph 3.

...

8. References to a given financial year shall refer to payments actually made by Member States between 16 October and the following 15 October.

...'

5. Article 7(2) of Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy (OJ 1999 L 160, p. 103) provides:

'2. The Commission shall decide on monthly advances on the provision for expenditure effected by the accredited paying agencies.

Expenditure for October shall be attributed to October if it is effected from 1 to 15 October and to November if it is effected from 16 to 31 October. Advances shall be paid to the Member State not later than the third working day of the second month following that in which the expenditure is effected.

...'

Background to the dispute

6. For the financial year 2006 (16 October 2005 to 15 October 2006), the indicative breakdown of the allocations made pursuant to Regulation No 1493/1999 for the restructuring and conversion of vineyards was established by Commission Decision 2005/716/EC of 10 October 2005 fixing, for the 2005/06 marketing year and in respect of a certain number of hectares, an indicative financial allocation by Member State for the restructuring and conversion of vineyards under Regulation No 1493/1999 (OJ 2005 L 271, p. 45). In the Annex to that decision, the amount of the indicative financial allocation to the Hellenic Republic was fixed at EUR 8 574 504 for an area of 1 249 ha.
7. On 10 July 2006, pursuant to Article 14 of Regulation No 1493/1999 and Article 16 of Regulation No 1227/2000, the Greek authorities submitted to the Commission a statement of the expenditure connected with the restructuring and conversion of vineyards in Greece in the course of the financial year 2006 for the purpose of obtaining financial allocations. According to that statement, the expenditure amounted to EUR 6 829 204.46 in total and the corresponding area was 788.002 ha.
8. On 22 September 2006, the Greek authorities sent a letter to the Commission in order to inform it of a computer data capture error, as the area to be taken into account was 1 102.271 ha. They explained that that area corresponded to the sum of the total area mentioned in the table annexed to the letter of 10 July 2006 setting out the expenditure for the restructuring and conversion of vineyards in Greece actually incurred at 30 June 2006, namely 1 085.391 ha, and the total area mentioned in the table annexed to the letter of 10 July 2006 setting out the expenditure for the restructuring and conversion of vineyards in Greece validated at 30 June 2006, namely 16.88 ha. They also reiterated that the total expenditure amounted to the sum of EUR 6 829 204.46.
9. On 26 September 2006, at the 890th meeting of the Management Committee for Wine, the Greek authorities reiterated their request that the Commission take into account the corrected data. The Commission orally rejected the Greek authorities' request, stating that the corrected information had been submitted too late.
10. On 4 October 2006, the Commission adopted Commission Decision 2006/669/EC fixing, for the 2006 financial year and in respect of a certain number of hectares, the definitive financial allocations to Member States for the restructuring and conversion of vineyards under Regulation No 1493/1999 (OJ 2006 L 275, p. 62) ('the contested decision'). On the same day a representative of the Commission met representatives of the Greek authorities to whom he explained that it was impossible, in view of the time-limit, to grant their request to take into account the corrected data communicated on 22 September 2006.
11. On 16 October 2006, the Greek authorities sent a letter to the Commission requesting that it amend to the Annex to the contested decision. The Commission did not grant that request.

The contested decision

12. In the contested decision, the Commission took into account, in respect of the Hellenic Republic, the data communicated by the Greek authorities on 10 July 2006.
13. It is stated in recital 6 of the preamble to the contested decision that the Commission applied to the Hellenic Republic the penalty laid down in Article 17(4) of Regulation No 1227/2000 in the amount of EUR 1 129 015.
14. In the Annex to the contested decision, the definitive financial allocation to the Hellenic Republic for the restructuring and conversion of vineyards in Greece was fixed at EUR 5 700 190 for an area of 788 ha.

Procedure and forms of order sought

15. By application lodged at the Registry of the Court of First Instance on 30 November 2006, the Hellenic Republic brought the present action.
16. The Hellenic Republic claims that the Court should annul or alter the contested decision in so far as it concerns the allocation of aid for the restructuring and conversion of vineyards in Greece, in order that the corrected information sent to the Commission on 22 September 2006 be taken into account and the corresponding funds be allocated to Greece.
17. The Commission contends that the Court should:

dismiss the action;

order the Hellenic Republic to pay the costs.

Law

18. In support of its action, the Hellenic Republic relies on five pleas in law. The first plea is that the time-limit laid down in Article 16(1) of Regulation No 1227/2000, which falls on 10 July of each year, is indicative. The second plea alleges infringement of the principle of cooperation in good faith, the third plea alleges infringement of the principles of good faith and sound administration, the fourth plea alleges infringement of the principle of proportionality, and the fifth plea alleges infringement of the principle of effectiveness.

The first plea: the indicative nature of the time-limit laid down in Article 16(1) of Regulation No 1227/2000

Arguments of the parties

19. First, the Hellenic Republic maintains that the words 'mandatory time-limit' ought to have been expressly added to Article 16(1) of Regulation No 1227/2000 in order to make the time-limit binding. It refers in particular to Case 32/72 Wasaknäcke Knäckebrotfabrik [1972] ECR 1181 and Case 52/72 Walzenmühle Magstadt [1972] ECR 1267.
20. Second, the Hellenic Republic claims that the purely indicative nature of that time-limit also stems from Article 16(2) of Regulation No 1227/2000, because that provision allows the Commission to reduce the amount of advances on a temporary and flat-rate basis where the information is incomplete or the time-limit has not been met.
21. Third, that interpretation is confirmed by Article 17(1) of Regulation No 1227/2000, which provides for the financing of expenditure actually incurred, thus implying that it is possible, even after 10 July of each year, to correct obvious errors.
22. The Commission disputes the arguments put forward by the Hellenic Republic.

Findings of the Court

23. The Hellenic Republic maintains that the data that it sent to the Commission on 22 September 2006 should have been taken into account in calculating the amount of the definitive financial allocations because the time-limit laid down in Article 16(1) of Regulation No 1227/2000 is not binding.
24. First, the Hellenic Republic, referring to two judgments of the Court of Justice, claims that that time-limit is only indicative because it is not expressly stated that it is binding.
25. However, it is apparent from the wording of Article 16(1) of Regulation No 1227/2000, as well as from the general scheme and purpose of the rules of which it forms part, that the time-limit laid down by that article is a mandatory time-limit.
26. Contrary to the assertions of the Hellenic Republic, the addition of the words 'mandatory time-limit' is not necessary to make the time-limit laid down binding. In that regard, it is clear that, in the two judgments on which the Hellenic Republic bases its line of argument, the Court found that the time-limit laid down was binding even though the provisions concerned did not contain the words 'mandatory time-limit'.
27. Furthermore, as regards the reference to the words 'not later than', it must be pointed out that the wording of Article 16(1) of Regulation No 1227/2000, in almost all the language versions, states that the Member States must forward the data referred to by that provision to the Commission 'not later than' 10 July each year. Three language versions (namely the Greek, Portuguese and Romanian versions) provide that the Member States must forward that data to the Commission 'by' 10 July each year.
28. In that regard, first, it must be observed that the Greek, Portuguese and Romanian versions of Article 16(1) of Regulation No 1227/2000 do not confer on that article a meaning which is different from that of the other language versions and, second, the binding nature of the time-limit laid down is clearly borne out by the function of that time-limit in the restructuring and conversion of vineyards system and by the objective pursued by the statement of expenditure and the areas concerned mentioned in Article 16(1) of Regulation No 1227/2000 in respect of which that time-limit is laid down within the framework of the system (see, by analogy, Wasaknäcke Knäckebrotfabrik, paragraphs 2 and 3; Walzenmühle Magstadt, paragraphs 2 and 3; and Case T-232/04 Greece v Commission, not published in the ECR, paragraph 48).
29. It is apparent from recital 2 in the preamble to Regulation No 1841/2003, which inserted the date of 10 July each year into Article 16(1) of Regulation No 1227/2000, that the time-limit laid down by that provision has the function of making it possible for the allocations provided for in Article 14(1) and (2) of Regulation No 1493/1999 to be determined effectively. Accordingly, the date by which Member States are required to communicate the information to the Commission each year must be complied with so that the indicative financial allocations, provided for in Article 14(1) of Regulation No 1493/1999, are adapted, inter alia in view of real expenditure, in accordance with Article 14(2) of that regulation.
30. As to the objective pursued by the statement of expenditure and the areas concerned, it must be borne in mind that that expenditure is linked to a financial year. Article 16(1)(a) and (b) of Regulation No 1227/2000 mentions statements of expenditure actually incurred and validated at 30 June of the current financial year. Furthermore, under Article 17(8) of Regulation No 1227/2000, references to a given financial year must refer to payments actually made by Member States between 16 October and the following 15 October.
31. Consequently, the Hellenic Republic's argument that the time-limit laid down in Article 16(1) of Regulation No 1227/2000 is not related to any immediately subsequent event must be rejected. As the Commission correctly stated, the date of 10 July is linked to that of 15 October in the same year and it was established to make it possible for the Commission to have the necessary time to adopt and publish the decision fixing the definitive financial allocations provided for in Article 14(2) of Regulation No 1493/1999 before 15 October.
32. The period between 10 July and 15 October was thought necessary, owing to the procedural constraints on the Commission, which it listed and described at the hearing, to make it possible for it to prepare, adopt and publish the decision fixing the definitive financial allocations before the end of the financial year.
33. Furthermore, it must be stated that, contrary to the Hellenic Republic's line of argument, a possible deferral of the adoption of the contested decision, in respect of all the Member States concerned or one single Member State, until after the end of the financial year would run counter to the effectiveness of the legislation in question.
34. First, under Article 17(8) of Regulation No 1227/2000, references to a given financial year must refer to payments actually made by Member States between 16 October and the following 15 October. Second, under Article 7(2) of Regulation No 1258/1999, the Commission must decide on monthly advances on the provision for expenditure effected by the accredited paying agencies, expenditure for October being attributed to October if it is effected from 1 to 15 October and to November if it is effected from 16 to 31 October. Furthermore, advances must be paid to the Member State not later than the third working day of the second month following that in which the expenditure is effected.
35. Consequently, it must be stated that, in order to enable Member States to make those payments, relating to the expenditure declared under Article 16(1) of Regulation No 1227/2000, before the end of the current financial year and to obtain reimbursement thereof by the Commission before the end of the budgetary year, under the budget headings available for that financial year, the effectiveness of the provisions in question implies that the decision fixing the definitive financial allocations to the Member States for the financial year must be adopted before the end of that year, namely 15 October.
36. Consequently, it is apparent from the wording of Article 16(1) of Regulation No 1227/2000 and the practical effect of that article that the time-limit which it lays down is binding.
37. Second, that finding is not called into question by the Hellenic Republic's arguments concerning Article 16(2) and Article 17(1) of Regulation No 1227/2000.
38. In that regard, the Hellenic Republic claims that Article 16(2) of Regulation No 1227/2000, which allows the Commission to reduce the amount of advances on a temporary and flat-rate basis where the information is incomplete or the time-limit has not been met, confirms that the time-limit laid down is purely indicative.
39. That argument cannot be accepted. Article 16(2) of Regulation No 1227/2000 concerns the consequences of the Member State concerned transmitting incomplete information to the Commission or failing to comply with the time-limit for that transmission. No argument as to whether or not the time-limit is binding can be derived from that provision.
40. Therefore, the Hellenic Republic's argument relying on Article 16(2) of Regulation No 1227/2000 to establish that the time-limit of 10 July each year is indicative cannot be upheld.
41. The Hellenic Republic further submits that Article 17(1) of Regulation No 1227/2000 confirms that the time-limit laid down is indicative inasmuch as it establishes the principle that the Commission must finance expenditure actually incurred by the Member States, which implies that it is possible for Member States to correct their errors after 10 July each year.
42. However, it must be pointed out that Article 17(1) of Regulation No 1227/2000 relates to the financing of expenditure actually incurred and validated, which is declared for any given financial year, and not merely to expenditure actually incurred. Accordingly, since the Hellenic Republic's argument is based on an incomplete reference to Article 17(1) of Regulation No 1227/2000, that argument is irrelevant.
43. It follows from the foregoing that, owing to the binding nature of the time-limit, a Member State is not entitled to require that the Commission take into account data communicated after that time-limit has expired. Consequently, the first plea must be rejected.

The second and third pleas: infringement of the principle of cooperation in good faith and infringement of the principles of good faith and sound administration

Arguments of the parties

44. First, the Hellenic Republic submits that the obligation to cooperate in good faith laid down in Article 10 EC requires that Member States take all appropriate measures to ensure the effectiveness of Community law and that Community institutions cooperate in good faith and in a constructive manner with Member States.
45. The Hellenic Republic takes the view that the Commission could at any time have checked and verified the data communicated. The difference of 214.269 ha between the data mentioned in Decision 2005/716, indicatively fixing the allocations and areas for restructuring, and the data in the contested decision, definitively fixing those allocations, is considerable and unjustified and should have given rise to questions on the part of the Commission.
46. The Hellenic Republic claims that the Commission infringed the principle of cooperation in good faith by taking into account manifestly incorrect data and not the correct data communicated to it on 22 September 2006, although it had had the necessary time to do so and the amendments would not have taken long. In that regard, the Hellenic Republic submits that, contrary to the Commission's assertions, the Commission did not, in the present case, have to make a complex assessment or exercise a discretionary power. Furthermore, the decision fixing the definitive financial allocations could have been adopted slightly later or have covered all the Member States except the Hellenic Republic. Failing that, the Commission could have adopted an amending decision on the basis of the new information, given that the correction of the data relating to the Hellenic Republic did not affect the data of the other Member States.
47. Second, the Hellenic Republic submits that there is a general principle as well as express provisions in various regulations that, where there is obvious error, an application for aid or any other document may be corrected at any time after its submission. It refers, by way of example, to Article 12 of Commission Regulation (EC) No 2419/2001 of 11 December 2001 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes established by Council Regulation (EEC) No 3508/92 (OJ 2001 L 327, p. 11). That principle, which is applicable to the recipient farmers, is of mandatory application and, having regard to the principles of good faith and sound administration, is particularly relevant in the relationships between the Commission and the authorities of Member States.
48. Furthermore, a reasonable failure to comply with the date of 10 July each year laid down in Article 16(1) of Regulation No 1227/2000 is permitted as long as the information is submitted before 15 October of that year, the date on which the financial year ends, and it is a matter of correcting data submitted within the time-limit or producing data 24 days before that date of 15 October. The fact that the documents were delivered during the summer holiday period would allow a Member State, within a reasonable period and before the end of the financial year, to correct obvious errors of calculation in computerised data which had been communicated by 10 July of the relevant year at the latest. Furthermore, the Hellenic Republic maintains that the Commission states that it is prepared to use even data submitted or corrected after 10 July of the year concerned in so far as possible.
49. The Commission disputes the arguments put forward by the Hellenic Republic.

Findings of the Court

50. It is appropriate to examine together those two pleas by which the Hellenic Republic contends, in essence, that the allegedly incorrect nature of the data it sent to the Commission before the expiry of the time-limit laid down in Article 16(1) of Regulation No 1227/2000 was obvious and that, consequently, by virtue of the principles relied on, the Commission was required to take account of the corrected data communicated after the expiry of that time-limit.
51. It is common ground, to begin with, that on 10 July 2006, pursuant to Article 16 of Regulation No 1227/2000, the Greek authorities sent to the Commission a statement of expenditure actually incurred and validated at 30 June 2006 and a statement of the total area concerned, which was 788.002 ha. It is also common ground that, on 22 September 2006, the Greek authorities sent to the Commission corrected data concerning the total area relating to the expenditure actually incurred at 30 June 2006 and that, as a result of that correction, the total area concerned was 1 102.271 ha.
52. Lastly, it is common ground that the Commission took the view that the corrected data had been sent too late and that, in the contested decision, it took into account the data communicated on 10 July 2006, namely 788.002 ha.
53. First, it must be pointed out that, under the scheme for the restructuring and conversion of vineyards, Member States must, in order to obtain a contribution to the costs, forward to the Commission, under Article 14(2) of Regulation No 1493/1999 and Article 16(1) of Regulation No 1227/2000, their expenditure for the current financial year and the total area concerned.
54. Therefore the communication to the Commission of the data relating to the expenditure for the current financial year and the total area concerned, so that it can fix the definitive financial allocations to Member States, is the responsibility of those Member States. Furthermore, the Hellenic Republic has not submitted any information showing how the Commission could have become aware of an error in the data communicated on 10 July 2006.
55. What is more, in its letter to the Commission of 16 October 2006, the Hellenic Republic states, in order to explain its error, that the programme for the restructuring and conversion of vineyards creates for it difficulties linked to the checking of data. The Commission cannot be criticised for not having noticed an error which the Hellenic Republic describes as obvious even though it did not discover it itself until September, more than two months after the transmission of the initial data.
56. Lastly, Article 17(4) of Regulation No 1227/2000 envisages a situation in which the total area notified in accordance with Article 16(1) of that regulation is less than the number of hectares indicated in the indicative financial allocation made to the Member State pursuant to Article 14(1) of Regulation No 1493/1999.
57. Consequently, the erroneous nature of the data communicated by the Greek authorities on 10 July 2006 was in no way obvious. The Hellenic Republic's line of argument is therefore based on an incorrect factual premise.
58. Second, as has already been stated in paragraph 43 above, in view of the binding nature of the time-limit laid down in Article 16(1) of Regulation No 1227/2000, a Member State is not entitled to require the Commission to take into account data communicated after that time-limit has expired.
59. Admittedly, as the Commission itself concedes, a taking into account on its part of data communicated belatedly by a Member State is not totally inconceivable, where the time-limit has been exceeded by a short period and it is possible to adopt the decision fixing the definitive financial allocations to Member States for the financial year concerned before 15 October. By contrast, the Commission may refuse to take into account data communicated belatedly by a Member State, if it is likely to preclude that decision from being adopted in good time. In the present case, the Hellenic Republic communicated the corrected data only on 22 September 2006, more than two months after the initial allegedly incorrect data had been communicated and only three weeks before the deadline for the adoption of the decision, 15 October 2006. In those circumstances, the Commission did not infringe the principles relied on in deciding not to take the corrected data into account.
60. Consequently, the second and third pleas must be rejected.

The fourth plea: infringement of the principle of proportionality

Arguments of the parties

61. First, according to the Hellenic Republic, the application of Article 16(2) of Regulation No 1227/2000, which provides for sanctions where the information transmitted is incomplete or the 'time-limit' of 10 July each year has not been met, and of Article 17(4) of that regulation, which provides for sanctions where a State exceeds actual expenditure, has the effect, in contravention of the principle of ne bis in idem, of imposing on it two penalties for the same act.
62. Second, the Hellenic Republic submits that the sanction of loss of aid in the amount of EUR 1 129 015 is disproportionate in relation to the computer error made by the Greek authorities.
63. Third, the Hellenic Republic submits that, contrary to the assertions of the Commission, the Commission did not, in the present case, have to make a complex assessment or exercise a discretionary power.
64. The Commission disputes the arguments put forward by the Hellenic Republic.

Findings of the Court

65. First, the Hellenic Republic claims that the Commission infringed the principle of proportionality inasmuch as a dual sanction was imposed on it by the cumulative application of Article 16(2) and Article 17(4) of Regulation No 1227/2000 in contravention of the principle of ne bis in idem.
66. Assuming that the measures provided for by Article 16(2) and Article 17(4) of Regulation No 1227/2000 may be described as 'sanctions', while it is apparent from recital 6 in the preamble to the contested decision that Article 17(4) of Regulation No 1227/2000 was applied to the Hellenic Republic, it is not apparent from the contested decision that the Commission applied Article 16(2) of that regulation to it.
67. It is clear from the wording of Article 16(2) that it does not apply where the Member State concerned has communicated complete data to the Commission within the time-limit prescribed for that communication, even if the Member State in question subsequently, after expiry of the time-limit, transmits amended data to the Commission.
68. Second, the Hellenic Republic maintains that the Commission infringed the principle of proportionality because the sanction of loss of aid in the amount of EUR 1 129 015 is disproportionate in the light of the Greek authorities' computer error.
69. It must be pointed out that, in the present case, the Commission applied Article 17(4) of Regulation No 1227/2000 because the total area notified on 10 July 2006 was less than that stated in the decision fixing the indicative financial allocations. As the Hellenic Republic states itself, the Commission does not have a discretion in the application of that article because that application stems from the statement of the total area concerned under Article 16(1) of that regulation.
70. Consequently, first, if the Hellenic Republic maintains that it is the loss of aid in the amount of EUR 1 129 015 that constitutes a disproportionate measure, it must be stated that the fixing of the amount of the definitive financial allocation for the restructuring and conversion of vineyards in Greece in the contested decision is the inevitable consequence of the fact that the Greek authorities communicated a total area which was less than that stated in the decision fixing the indicative financial allocations to Member States and a cost per hectare which was greater than that in the indicative financial allocation.
71. Second, if the Hellenic Republic maintains that it is the fact that the data communicated on 10 July 2006 was taken into account that constitutes a disproportionate measure, the consequence being a loss of aid in the amount of EUR 1 129 015, it must be pointed out that it has not been established that that constitutes a disproportionate measure in that it is manifestly inappropriate.
72. It should be recalled that the principle of proportionality, which is one of the general principles of Community law, requires that acts adopted by Community institutions do not exceed the limits of what is appropriate and necessary in order to attain the legitimate objectives pursued by the legislation in question; where there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (see Case C-375/05 Geuting [2007] ECR I-7983, paragraph 45 and the case-law cited).
73. As regards judicial review of the implementation of that principle, the lawfulness of the measure adopted can be affected only if the measure is manifestly inappropriate in terms of the objective which the Commission is seeking to pursue (see, to that effect, Geuting, paragraph 46 and the case-law cited).
74. Having regard to the need to adopt the decision fixing the definitive financial allocations to Member States before the end of the financial year on 15 October 2006 in order to enable those Member States to make the corresponding payments and to maintain the effectiveness of the provisions in question (see paragraphs 31 to 35 above), the Commission adopted an appropriate measure in taking into account the data communicated within the time-limit laid down and not the corrected data communicated to the Commission on 22 September 2006.
75. Consequently, the reduction of the definitive financial allocation to the Hellenic Republic for the restructuring and conversion of vineyards in the contested decision by EUR 1 129 015 in relation to the expenditure stated and stemming from a total area notified of vineyards in Greece which is less than that mentioned in Decision 2005/716 does not constitute a disproportionate measure.
76. The fourth plea must therefore be rejected.

The fifth plea: infringement of the principle of effectiveness

Arguments of the parties

77. The Hellenic Republic maintains that the Commission infringed the principle of the effectiveness of the relevant legislative provisions, namely Articles 11, 13 and 14 of Regulation No 1493/1999 and Articles 16 and 17 of Regulation No 1227/2000. The scheme for the restructuring and conversion of vineyards is an important measure to improve the equilibrium of the market, stabilise and qualitatively improve Community vineyards and better align supply to demand. The substantial reduction in the aid granted to the Hellenic Republic on account of a manifest computer data capture error seriously undermines those Community objectives. Furthermore, the Commission does not explain to what extent the acceptance of the request submitted belatedly by the Hellenic Republic would jeopardise the effective implementation of the system for allocating funds for the restructuring and conversion of vineyards.
78. The Commission disputes the arguments submitted by the Hellenic Republic.

Findings of the Court

79. It must be pointed out that, as has already been stated in paragraphs 31 to 35 above, in order to maintain the effectiveness of the legislation in question, the fixing of a mandatory time-limit is necessary to make it possible for the Commission to adopt the decision fixing the definitive financial allocations to Member States before the end of the financial year concerned. Consequently, contrary to the Hellenic Republic's line of argument, the effectiveness of those provisions does not preclude the application of a mandatory time-limit and a refusal to take into account the data communicated by a Member State after that time-limit, even if the consequence is a reduction in the aid granted to the Member State concerned.
80. Accordingly, the Commission did not infringe the principle of the effectiveness of the legislation in question by not taking into account the corrected data communicated by the Hellenic Republic after the expiry of the mandatory time-limit laid down in Article 16(1) of Regulation No 1227/2000.
81. Consequently, the fifth plea must be rejected.
82. It follows from all of the foregoing that the action must be dismissed in its entirety.

Costs

83. Under Article 87(2) of the Rules of Procedure of the Court of First Instance, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Hellenic Republic has been unsuccessful, it must be ordered to pay the costs, as applied for by the Commission.

On those grounds,

THE COURT OF FIRST INSTANCE (Fifth Chamber)

hereby:

1. Dismisses the action;

2. Orders the Hellenic Republic to pay the costs.

Vilaras

Prek

Ciucă

Delivered in open court in Luxembourg on 11 December 2008.

Table of contents


Legal context

Background to the dispute

The contested decision

Procedure and forms of order sought

Law

The first plea: the indicative nature of the time-limit laid down in Article 16(1) of Regulation No 1227/2000

Arguments of the parties

Findings of the Court

The second and third pleas: infringement of the principle of cooperation in good faith and infringement of the principles of good faith and sound administration

Arguments of the parties

Findings of the Court

The fourth plea: infringement of the principle of proportionality

Arguments of the parties

Findings of the Court

The fifth plea: infringement of the principle of effectiveness

Arguments of the parties

Findings of the Court

Costs

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* Language of the case: Greek.