Judgment of the General Court (Third Chamber) of 9 September 2011 – Greece v Commission

(Case T-344/05)

EAGGF – Guaranteee Section – Expenditure excluded from Community financing – Beef – Extensification payment – Arable crops – Fruit and vegetables – Aid for processing of citrus fruit – Conditions for application of 100% flat-rate financial correction – Proportionality

1.                     Agriculture – EAGGF – Grant of aids and premiums – Obligation on Member States to organise an effective system of administrative controls and on-the-spot checks – Scope – Unreliable controls – Disallowance by the Fund (Council Regulation No 1258/1999, Art. 8(1)) (see paras 74-75, 269-270)

2.                     Agriculture – EAGGF – Clearance of accounts – Disallowance of expenditure arising from irregularities in the application of the Community rules – Challenge by the Member State concerned – Burden of proof – Allocation between the Commission and the Member State (Council Regulation No 1258/1999) (see paras 76-77, 313)

3.                     Acts of the institutions – Rules of administrative conduct of general scope – Measure designed to produce external effects – Scope (see para. 192)

4.                     Acts of the institutions – Statement of reasons – Obligation – Scope – Decision relating to the clearance of accounts in respect of expenditure financed by the EAGGF (Art. 296 TFEU) (see paras 251-252)

5.                     European Union law – Principles – Proportionality – Scope – Discretion of the EU legislature in the area of the common agricultural policy – Judicial review – Limits (Arts 40 TFEU and 43 TFEU; Commission Regulation No 1169/97, Art. 20(5), first para.) (see paras 289-295)

Re:

APPLICATION for partial annulment of Commission Decision 2055/555/EC of 15 July 2005, excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) (OJ 2005 L 188, p. 36), in so far as it excludes certain expenditure incurred by the Hellenic Republic in the beef, arable crops and fruit and vegetables sectors.

Operative part

The Court:

1.

Annuls Commission Decision 2055/555/EC of 15 July 2005, excluding from Community financing certain expenditure incurred by the Member States under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) in so far as it excludes from Community financing expenditure incurred by the Hellenic Republic in respect of extensification payments made for the years 2000 and 2001;

2.

Dismisses the action as to the remainder;

3.

Orders the Hellenic Republic to bear two thirds of its own costs and to pay two thirds of the costs of the European Commission;

4.

Orders the Commission to bear one third of its own costs and to pay one third of the costs of the Hellenic Republic.