Keywords
Summary

Keywords

1. Acts of the institutions – Choice of legal basis – Criteria

(Arts 2 EC, 3(1)(k), EC, 159, third para., EC and 308 EC; Council Regulation No 1968/2006)

2. Actions for annulment – Judgment annulling a measure – Effects – Limitation by the Court

(Art. 231, second para., EC; Council Regulation No 1968/2006)

Summary

1. In the context of the organisation of the powers of the Community, the choice of the legal basis for a measure must rest on objective factors amenable to judicial review, including, in particular, the aim and the content of the measure.

Article 308 EC may be used as the legal basis for a measure only where no other provision of the Treaty gives the Community institutions the necessary power to adopt that measure. In addition, recourse to that provision demands that the action envisaged should relate to the ‘operation of the common market’.

First, the objectives of Regulation No 1968/2006 concerning Community financial contributions to the International Fund for Ireland (2007 to 2010) correspond to the objectives pursued by the Community policy on economic and social cohesion, a fact which is also confirmed by recital 2 in the preamble to that regulation. Second, the Community’s financial contribution to the Fund, leaving aside its legislative framework, forms part of the specific actions which, when they prove to be necessary outside the Structural Funds in order to realise the objectives referred to in Article 158 EC, may be adopted in accordance with the third paragraph of Article 159 EC.

However, neither the arrangements governing cooperation between the Community and the Fund nor the conditions and method of payment in respect of the Community’s financial contribution allow the Community to prevent the use by the Fund of that contribution to cover actions which, while complying with the objectives of the Agreement on the International Fund for Ireland, extend beyond the scope of the Community’s policy on economic and social cohesion or, at least, are not managed in accordance with the criteria applied by the Community within the framework of that policy. The Community legislature was entitled to take the view, in the sixth recital in the preamble to Regulation No 1968/2006, that the range of activities financed by that regulation would extend beyond the scope of the Community’s policy on economic and social cohesion.

Article 159 EC covers only independent action by the Community carried out in accordance with the Community regulatory framework, and the content of which does not extend beyond the scope of the Community’s policy on economic and social cohesion. Consequently, the third paragraph of Article 159 EC does not by itself confer on the Community the necessary power to pursue the objectives of the Community’s policy on economic and social cohesion by means of a financial contribution under conditions such as those provided for by Regulation No 1968/2006.

Nevertheless, the purpose of Regulation No 1968/2006 is to support the actions of an international organisation established by two Member States, the objective of which is to strengthen economic and social cohesion. As follows from Articles 2 EC and 3(1)(k) EC, the strengthening of economic and social cohesion constitutes, outside of Title XVII of the Treaty, an objective of the Community. Furthermore, the objective of that directive falls within the framework of the common market, since it seeks to bring about economic improvements in disadvantaged areas of two Member States and thus relates to the functioning of the common market.

It follows from the foregoing that, as Regulation No 1968/2006 pursues objectives set out in Articles 2 EC and 3(1)(k) EC and in Title XVII of the Treaty, without that title by itself conferring on the Community the power to realise those objectives, the Community legislature ought to have had recourse to both the third paragraph of Article 159 EC and Article 308 EC, while complying with the legislative procedures laid down therein, that is to say, both the ‘co‑decision’ procedure referred to in Article 251 EC and the requirement that the Council should act unanimously.

(see paras 40, 42, 54, 58-59, 63-65, 67-69)

2. Under the second paragraph of Article 231 EC, the Court, if it considers this necessary, is to state which of the effects of a regulation which it has declared void are to be considered definitive.

Annulment of Regulation No 1968/2006 concerning Community financial contributions to the International Fund for Ireland (2007-2010), without maintenance of its effects could have adverse consequences, particularly with regard to financial contributions made for actions and projects planned and in the course of implementation, and would be liable to give rise to uncertainties damaging to present and future financing operations of the Fund.

In those circumstances, important grounds of legal certainty exist which justify the Court in exercising the power conferred on it by the second paragraph of Article 231 EC and in stating which of the effects of the annulled regulation are to be considered definitive. It is thus appropriate to rule that the annulment of Regulation No 1968/2006 does not affect the validity of payments made or of undertakings given under that regulation prior to the delivery of the present judgment, and that the effects of that regulation are to be maintained until the entry into force, within a reasonable period, of a new regulation adopted on the appropriate legal basis.

(see paras 72, 74-75)