C-152/80

JUDGMENT OF 20. 5. 1981 — CASE 152/80 DEBAYSER v FIRS

CELEX: 61980CJ0152
Datum: 1981-05-20
Källa: eur-lex.europa.eu

In Case 152/80 REFERENCE to the Court under Article 177 of the Treaty by the Tribunal Administratif [Administrative Court], Paris, for a preliminary ruling in the action pending before that court between

THE COURT composed of: P. Pescatore, President of the Second Chamber acting as President, Lord Mackenzie Stuart and T. Koopmans (Presidents of Chambers), A. O'Keeffe, G. Bosco, A. Touffait, O. Due, U. Everling and A. Chloros, Judges, Advocate General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

On 15 March 1976 the French Government decided to allow the French franc to float. Following that decision monetary compensatory amounts were introduced as from 25 March 1976. Under the common organization of the market in sugar those amounts were originally fixed at the rate of FF 4.46 per 100 kg of white sugar.

The monetary compensatory amounts remained more or less stable for almost four months. After 23 July 1976, however, as a result of the fall in value of the French currency, they rose progressively until by 27 December 1976 they had reached the level, in the sugar sector, of FF 32.67.

Subsequently the Fonds d'Intervention et de Régularisation du Marché du Sucre (hereinafter referred to as “the FIRS”) was consulted by sugar exporters wishing to know whether Article 1 of Regulation No 1608/74 of the Commission of 26 June 1974, the so-called “discretionary relief”, could be applied in respect of export contracts concluded under binding conditions after 15 March 1976. That article states:

“Where monetary compensatory amounts are introduced or increased as a result of the fixing or the amendment of the central rate or of the representative rate of the currency of a Member State used in the context of the common agricultural policy, or [as a result of] the decision of a Member State to permit its currency to float in relation to the currencies of the Member States where the fluctuation of the rates of exchange is kept within a maximum spread of 2.25%, the Member State in question shall be authorized to waive, on a discretionary basis and according to the following conditions, the monetary compensatory amount or so much thereof as corresponds to the increase”.

The FIRS replied in the negative. The same reply was given by the Commission to the Syndicat de Commerce des Sucres [Sugar Trade Association]. Article 2 (1) of Regulation No 1608/74 states that “Article 1 shall apply only to imports and exports carried out pursuant to binding contracts concluded before the monetary measures referred to in that article”. Both the Commission and the FIRS, however, maintained that the unforseeable and abnormal fluctuation of the French franc between 23 July and 27 December 1976 could not be considered as a monetary event within the meaning of the above-quoted provision.

In January and February 1977 Debayser SA, Sucre-Union SA and Jean Lion SA each brought an action against the Commission before the Court of Justice. The applications, based on Articles 178 and 215 of the EEC Treaty, sought damages for the loss suffered by the applicants through the failure to apply the provision for discretionary relief in Article 1 of Regulation No 1608/74 to exports of sugar carried out on the basis of binding contracts after 15 March 1976.

In its judgment of 2 March 1978 (Joined Cases 12/77, 18/77 and 21/77, Debayser SA and Others [1978] ECR 553, the Court dismissed the applications as inadmissible, noting in particular that Regulation No 1608/74 has “given the Member States a margin of discretion which permits them to judge the application to each individual case of the discretionary measure, including the circumstances such as to justify the grant or the refusal of the exemption referred to in Article 1 of the regulation...” and that “it leaves to the charge of the Member States alone the decision concerning the refusal to apply the discretionary measure”. Since the action was in substance directed against measures taken by the national authorities pursuant to provisions of Community law the Court judged that the conditions of admissibility laid down in Article 178 and the second paragraph of Article 215 of the Treaty were not fulfilled.

After the Court's decision the undertakings in question submitted to the FIRS a claim for repayment, the implied rejection of which is the subject of litigation before the Tribunal Administratif, Paris. That court was asked in an alternative submission to refer three question to the Court of Justice for a preliminary ruling, two of which it refused to refer on the ground that, first, the concept of “monetary measure” in Article 2 (1) of Regulation No 1608/74 was perfectly clear and, secondly, it was not necessary to decide whether the regulations altering the monetary compensatory amounts which were adopted by the Commission between 23 July and 3 December 1976 were applicable to exports carried out by the applicants during that same period, the decision at issue being based only on Regulation No 1608/74.

The Tribunal Administratif therefore confined its reference to the Court of Justice by a judgment of 17 June 1980 to one question, whether Article 2 (1) of Regulation No 1608/74 is valid in so far as it excludes from the application of the regulation transactions wnich the regulation is intended to protect and which fulfil the conditions in Article 2 (2).

The judgment making the reference was received at the Court Registry on 25 June 1980.

Written observations were submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC by Debayser SA, Sucre-Union SA and Jean Lion SA, represented by Funck-Brentano, Avocats Associés of the Paris Bar, and by the French Government, represented by Thierry Le Roy of the General Secretariat of the Comité Interministériel pour les questions de Coopération Economique Européenne [Inter-Ministerial Committee on European Economie Co-operation], acting as Agent.

The Commission of the European Communities indicated by letter of 27 October 1980 that since the subject-matter of the present case is identical in all respects to that of Joined Cases 12, 18 and 21/77 it relies on the detailed submissions it has already submitted in the said cases.

In those cases the Commission contended, first, that it would be excessive to interpret rules based on grounds of natural justice as imposing an obligation to take into consideration all the particular circumstances in individual situations. It also observed that the provision for discretionary relief constitutes a derogation from the application of the monetary compensatory amounts and must therefore, like all derogations from general rules, be strictly interpreted. Secondly, it pointed out that it is a characteristic of the system of monetary compensatory amounts that the latter may vary permanently, following the fluctuation of the actual rate of exchange of the currency concerned. It is impossible to imagine how such a system could function if traders were to be exempted wholly or partially from the impact of the monetary compensatory amounts in consideration of the particular circumstances of each case.

As to the allegation that the principle of the protection of legitimate expectation in the case of the traders has been breached, the Commission notes that that principle cannot be relied upon in connexion with monetary compensatory amounts, which necessarily vary in accordance with alterations in exchange rates. Moreover, such a submission can only be founded on a sufficiently serious breach of a superior rule of law for the protection of the individual. While such a breach may be alleged where an alteration in the Community rules has affected the applicants' legal situation, it may not be where the existing rules have remained unchanged contrary to the expectations of those concerned.

On hearing the report of the Judge-Rapporteur and the opinion of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.

II — Observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities

Debayser SA, Sucre-Union SA and Jean Lion SA (hereinafter referred to as “the plaintiffs in the main action”) claim that Article 2 (1) of Regulation No 1608/74 as interpreted by the Commission is incompatible with the aims of the system of monetary compensatory amounts which consist in maintaining uniform prices on the common market notwithstanding the temporary abandonment of fixed parities.

In pursuance of those aims, which are defined in the Treaty and re-stated in the basic Regulation No 974/71, Regulation No 1608/74 is designed to protect traders in the process of performing binding contracts expressed in French francs from the incidence of monetary compensatory amounts which in the circumstances have lost their compensatory character to become charges payable on export.

The restrictive criteria adopted in Article 2 (1) of the regulation with reference to its application prevent flexibility in applying the discretionary relief clause and do not provide protection in each individual case, contrary to the objective of the regulation.

The provision compels the plaintiffs in the main action to bear the very losses which Regulation No 1608/74 was designed to avert and which they could have avoided since they do in fact fulfil the conditions laid down in Article 2 (2) of the regulation for granting exemption from monetary compensatory amounts.

In the submission of the plaintiffs in the main action Article 2 (1) of Regulation No 1608/74 prevents the latter from fulfilling its purpose of complementing Regulation No 974/71, and thereby infringes Articles 2 and 3 of the Treaty establishing the principle of promoting within the Community increased stability and the free movement of goods by eliminating as between Member States customs duties and quantitative restrictions on the import and export of goods and all other measures having equivalent effect.

It may be seen from Regulation No 974/71 that monetary compensatory amounts are only justified in so far as currency fluctuations are liable to cause disturbances in trade in agricultural products. It follows, therefore, that the monetary compensatory amount is purely a corrective factor, since it is solely intended to prevent exporters from receiving for the products they sell a price higher than the basic national price which is not altered by the depreciation of the national currency, thereby thwarting the Community regulations on free movement and competition.

In the case of the plaintiffs in the main action, the monetary compensatory amounts levied when the export was effected had lost the corrective nature envisaged by the regulation because the conditions to which the commercial transaction was subject (the amount of the refund, and the sale prices expressed in French francs) had been fixed several months before the date of export, when there was no justification for the amount levied.

The Commission was sufficiently well aware of the unlawfulness of the system as applied to introduce by means of Regulation No 243/78 of 1 February 1978, after the events detailed above, the option of fixing the amounts in advance in order to take into account the fact that “the monetary compensatory amount does not always correspond to the rate on which commercial contracts are based”.

Next, the plaintiffs in the main action allege that the above-mentioned Article 2 (1) has had discriminatory effects in their case.

As the rules in force when the relevant events occurred did not enable traders to take precaution against variations in monetary compensatory amounts there was no other course open to the plaintiffs to protect themselves against losses due to increases in such amounts than to abstain from their activities on the market.

In the second half of 1976 that situation brought about a noticeable reduction in French sugar exports, inducing the French Government to inform the Commission of its concern “in view of the sudden alterations in the flow of its traditional exports. which are not unconnected with the high level reached by the monetary compensatory amounts from 1976”.

The existence of fundamental anomalies in conditions of competition was admitted by the Commission which, in the above-mentioned Regulation No 243/78, eliminated discrimination by organizing the advance fixing of the monetary compensatory amounts under tendering procedures, that is to say, by freezing the level of the monetary compensatory amounts for a given transaction at the date of the award of the tender on which the level of the refund was fixed. There is no retroactive measure in the regulation, however, which means that for the period prior to its publication Article 2 (1) of Regulation No 1608/74 remained unlawful.

Thirdly, the plaintiffs in the main action invoke the principle of proportionality inasmuch as it prohibits the Community authorities from taking measures other than those which are strictly necessary in order to pursue the aims of the common agricultural policy, taking into account the existing circumstances.

The principle of proportionality, enunciated in numerous decisions of the Court, is included in the preamble to Regulation No 974/71 introducing the monetary compensatory amounts, where it is stated that the amounts must be such as are “strictly necessary to compensate the incidence of the monetary measures on the prices of basic products covered by intervention arrangements”.

In the case in hand the amounts which were levied no longer fulfilled the purpose defined in Regulation No 974/71

Although it seems normal that traders should be exposed, for reasons pertaining to the common good, to the disadvantages arising from minor fluctuations which are reflected in corresponding fluctuations in the monetary compensatory amounts, it is quite a different matter when the. fluctuations are large and unforeseeable.

The disadvantages thus imposed on the plaintiffs were not necessary to avoid disturbances in trade in agricultural products, for it was possible to modify the legislation, as has been seen subsequently.

The last two submissions of the plaintiffs in the main action concern the principles of legal certainty and of the protection of legitimate expectation respectively.

As to the principle of legal certainty, the plaintiffs claim that in the case-law of the Court it has been established that under this principle a new provision imposing charges is not applicable to previously existing situations if the Community has provided a trader with a guarantee that the legal provisions, applicable to a commercial transaction initiated before the new rules, still stand. The issue of an export licence by the Commission constitutes such a guarantee. In practice the Commission has acknowledged that the issue of an export licence gives traders the right to carry out their commercial transaction on the legal terms in force on the date of such issue.

Regulation No 243/78, which was also motivated by the need to provide legal certainty for traders, provides for advance fixing of the amounts on application by traders when the amount of the refund itself is fixed in advance by means of the export certificate.

For the same reasons the issue to the plaintiffs of export licences which included a refund fixed in advance should have guaranteed them the continuance of the prevailing economic conditions when they carried out the exports on the basis of those licences.

As to the protection of legitimate expectation, the plaintiffs vigorously reject the Commission's view that breach of the principle can only be pleaded where alteration of the Community rules has affected the existing legal situation. The position is the same whether by being applied immediately a new rule disrupts an economic situation which has not yet disappeared, and which was created under the old rules, or whether inadequate rules are applied in new economic circumstances. The increase in the monetary compensatory amounts gave rise to a new economic situation calling for an appropriate application of the legislation, and in particular the discretionary relief, in order that it might continue to fulfil its purpose.

The plaintiffs acted on the assumption that they were protected against unreasonable losses due to events in the monetary sphere.

Their assumption was objectively justified because:

In the past, provisions adopted for discretionary relief have always protected traders who had concluded contracts on fixed conditions against increased charges payable on export;

Regulation No 1608/74 is general in scope and its purpose is to put an end to the harmful consequences of events in the monetary sphere;

Although the possibility of an increase in the monetary compensatory amounts as the result of disparities appearing in currency exchange rates was not expressly provided for in the regulation, it is comprised in the objectives defined in the preamble;

The Commission had stated that it would follow with particular attention the application of the provisions laid down “in order to take, if necessary, further measures and to determine whether this system should be maintained”.

The Commission is therefore in breach of the principle that legitimate expectation must be protected.

The French Government observes that the interpretation of the concept of “monetary measures” put forward by the plaintiffs in the national court appears to it to run counter to both the actual wording of Regulation No 1608/74 and the system of monetary compensatory amounts introduced by Regulation No 974/71 in which Regulation No 1608/74 has its part.

It is the opinion of the French Government that the wording of Regulation No 1608/74 is free of all ambiguity. It is clear from the provisions in Articles 1 and 2 that:

In the first place, the provisions for exemption in Article 1 apply only to exports carried out under binding contracts made before the “monetary measure” referred to in that article occurred;

In the second place, the Community legislature intended the term “monetary measure” to designate only the cases listed clearly and restrictively in Article 1.

In any case, the issue has already been settled both by the court making the reference, arbiter of questions of “droit commun” [in French law, the law applicable to all but special categories] under Community law, which found that the wording is clear on this point, and by the Commission which administers the monetary compensatory amounts and is the author of the text in question.

Moreover, Regulation No 1608/74 provided Member States with no more than an option. The discretionary nature of the power to grant exemption from the monetary compensatory amounts results expressly from both the preamble and the body of the regulation itself.

Even if the interpretation advanced by the plaintiffs as to the scope of the regulation were to be confirmed by the Court, the fact remains that the power to grant exemption lies exclusively within the discretion of the competent authorities of the Member State alone and may in no circumstances be assimilated to a right not to be charged the monetary compensatory amount.

It is not that question of interpretation, however, which has been referred to the Court of Justice, but a question concerning the validity of Article 2 (1) of Regulation No 1608/74.

The French Government considers that the reply to the question should be in the negative, no factor having been established which is capable of affecting the validity of the above-mentioned provision.

In substance, the court making the reference asks whether the restricted nature of that provision offends against certain fundamental principles of Community law, namely the principle of equal treatment of traders whose situations are comparable and the principle of respect for legal certainty in regard to contracts in the process of being performed.

As to the first point, it should be noted that there is no discrimination against traders within the territory of a single Member State who are all treated in the same manner. By contrast it is quite reasonable to maintain that that equality is disturbed if the traders are in comparable situations but located in the territory of two different Member States. Nevertheless, the distortion of competition which results from a situation of that kind cannot be imputed to an omission on the part of the Community legislature, which drew up Regulation No 1608/74, but is due to the absence among the Member States of a harmonized monetary policy, an objective factor independent of the intention of the legislature, which cannot be criticized for having offended against the principle of equality.

The French Government also fails to share the opinion that imperfections in Regulation No 1608/74 cause it to offend against the principle of legal certainty protecting contracts in the process of being performed.

It is clear from the case-law of the Court of Justice that traders have no objective right to the maintanance in their current form of rules concerning the calculation, the amount or the circumstances in which the monetary compensatory amounts are to be applied, the latter having been introduced not for the benefit of traders but to serve the common interest.

The system of monetary compensatory amounts does not give rise to a duty on the part of the Community to provide permanent or total protection against the exchange risks to which traders are exposed, but solely a duty to compensate for fluctuations in exchange rates whenever that appears necessary.

Thus the machinery of the monetary compensatory amounts does not involve any financial commitment on the part of the Community toward traders, and allows the former, in the common interest and within the wide margin of discretion which has been granted to it, to alter without prior notice both the method of calculation and the level of the monetary compensatory amounts and to abolish any payment (or levy) of such amounts by means of a decision in the form of a repeal.

Any other approach would, moreover, prevent the proper functioning of the machinery of monetary compensatory amounts and would jeopardize the common agricultural prices machinery established in the Community.

The truth is that if the autonomous decision on the part of a government to support or not to support its floating currency may qualify * as a “monetary measure” referred to in Article 1 of Regulation No 1608/74, the result would be that the regulation could be applied after every variation in exchange rates, meaning that traders would be permanently relieved of the effect of differences registered between the time at which the contract was concluded and the time at which its performance was completed.

Regulation No 1608/74 provides traders with protection against a sudden change in the monetary compensatory amounts resulting from an unforeseen decision to float a currency. But where a decision to float it introduces on a long-term basis a situation of monetary instability as far as traders are concerned, it would be prudent management for them to review earlier arrangements made in stable monetary conditions and to make allowance for exchange risks when considering export contracts. Were it otherwise, the inevitable conclusion must be that the machinery of monetary compensatory amounts is a means whereby the Community provides insurance against the exchange risks faced by traders, which was clearly not the intention of the Community legislature in introducing the system of monetary compensatory amounts.

III — Oral procedure

Debayser SA, Sucre-Union SA and Jean Lion SA, represented by L. Funck-Brentano of the Paris Bar, and the The Advocate General deliverd his Commission of the European Communi- opinion at the sitting on 9 April 1981.. ties, represented by J. Delmoly, acting as Agent, presented oral argument at the sitting on 11 March 1981.

Decision

1. By a judgment of 17 June 1980 which was received at the Court Registry on 25 June 1980 the Tribunal Administratif [Administrative Court], Paris, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question concerning the validity of Article 2 (1) of Regulation No 1608/74 of the Commission of 26 June 1974 on special provisions in respect of monetary compensatory amounts (Official Journal L 170, p. 38).

2. The question arose in the course of legal proceedings between Debayser SA, Sucre-Union SA and Jean Lion SA, and the Fonds d'Intervention et de Régularisation du Marché du Sucre (hereinafter referred to as “the FIRS”), which is the authority in France responsible for the charging and payment of monetary compensatory amounts in the sugar sector, concerning the refusal of that institution to apply the provision for discretionary relief contained in the above-mentioned Regulation No 1608/74 to the applicants in order to exempt them from that portion of the monetary compensatory amounts which represents the difference between the amounts applicable on the date on which they concluded contracts for the export of sugar and the amounts in force on the date when those exports were effected.

3. According to Article 1 of Regulation No 1608/74:

Article 2 (1) of the same regulation states that:

“Article 1 shall apply only to imports and exports carried out pursuant to binding contracts concluded before the monetary measures referred to in that article”.

4. Following the decision of the French Government on 15 March 1976 to allow the French franc to float monetary compensatory amounts were introduced as from 25 March 1976. The amounts, fixed at FF 4.46 on 25 March 1976, were increased several times as a result of the fall in the value of the French franc. They rose in sucessive stages from FF 4.85 on 23 July 1976 to FF 32.67 on 27 December 1976.

5. On the introduction of the scheme the applicants requested the FIRS to extend in their favour the application of Regulation No 1608/74 to binding contracts concluded after 15 March 1976 and performed after 23 July 1976, the date after which the amounts were subjected to the increases mentioned above.

6. With regard to such contracts a circular from the FIRS informed the exporters concerned that they could not be granted the exemption they sought under Regulation No 1608/74 because the ambit of the clause providing discretionary relief was restricted to imports or exports effected under binding contracts concluded before the monetary measure described in Article 1 of that regulation, and the monetary measure in question in this instance could only be the decision adopted by the French Government on 15 March 1976 to allow the franc to float. An identical reply was given by the Commission on 7 December 1976 to the President of the Syndicat du Commerce des Sucres [Sugar Trade Association].

7. Having brought an action against the Commission before this Court under the second paragraph of Article 215 of the EEC Treaty for a refund, in the form of damages, of the increases in the monetary compensatory amounts which they claimed they should not have had to pay, which action was dismissed by the Court as inadmissible in a judgment of 2 March 1978 (Joined Cases 12, 18 and 21/77 [1978] ECR 553) on the ground that the action concerned measures adopted by the national authorities, the applicants brought an action for annulment against the FIRS before the Tribunal Administratif de Paris. That application is directed against the refusal of that institution to apply the provision for discretionary relief in Regulation No 1608/74 in the case of exports effected under binding contracts concluded after 15 March 1976 and performed before 23 July 1976, and seeks reimbursement of the increase in the monetary compensatory amounts which were paid on completion of export contracts which had been concluded prior to the date of each increase.

8. In the course of those proceedings they requested the national court to refer to this Court for a preliminary ruling questions concerning, inter alia, the interpretation of the words “monetary measure” in Article 2 (1) of Regulation No 1608/74 and, if those words must be interpreted as applying in the circumstances exclusively to the decision taken by the French Government on 15 March 1976, the validity of the above-mentioned provision in so far as it excludes from the ambit of the said regulation binding contracts concluded after 15 March 1976.

9. Considering that the concept of “monetary measure” used in Article 2 (1) of Regulation No 1608/74 did not present a difficulty of interpretation and that it could refer in the present circumstances only to the decision taken by the French Government on 15 March 1976, the national court decided to refer to this Court only the second question, requesting from it a ruling on the validity of Article 2 (1) of Regulation No 1608/74 of the Commission.

10. The national court was correct in considering that the concept of a “monetary measure” within the meaning of Article 2 (1) of the regulation cited above must be construed as applying in the present circumstances solely to the decision taken on 15 March 1976 by the French Government to allow the French franc to float beyond the margins of fluctuation permitted as against the currencies of the Member States in what was then known by common consent as the “monetary snake”.

11. On the basis of that interpretation the national court asks whether Article 2 (1) of that regulation may be considered, “regard being had to the wording of the third recital in the preamble thereto”, as valid in so far as it excludes from the ambit of the regulation imports or exports effected under binding contracts after the monetary measure contemplated in Article 1 but before each increase of the monetary compensatory amounts, involving an increased charge for the party concerned.

12. From the preamble to Regulation No 1608/74 of the Commission it appears that the purpose which the provisions of that regulation were designed to fulfil was not to provide traders engaged in the performance of contracts containing pre-fixed conditions with full protection against the application of monetary compensatory amounts following the monetary event described in the first recital and in Article 1 but solely to introduce, in respect of contracts concluded prior to such event, a “certain flexibility” into the monetary rules by giving the Member States the opportunity to apply a clause conferring discretionary relief permitting “each individual case to be examined by them in the light of the loss suffered whilst maintaining measures to ensure a coordinated application thereof.”

13. In view of those words the argument put forward in the proceedings by the plaintiffs in the main action to the effect that Article 2 (1) of Regulation No 1608/74 prevents the regulation from achieving its end because of the restrictive criterion it adopts is based on a misconstruction of the nature and purpose of that regulation. By restricting the ambit of Regulation No 1608/74 to imports or exports effected under binding contracts which were concluded before the monetary measure referred to in Article 1 that provision does not thwart the aims of that regulation but confines itself within the bounds of those aims as defined by all that is stated in the preamble to that regulation, which is designed to ensure that the true function of the monetary compensatory amounts is preserved.

14. Indeed, such an argument fails to have regard for the requirements pertaining to the orderly and efficient operation of the monetary compensatory amounts which must, in order to achieve their purpose of compensating for alterations occurring in the fixing of the central rate or the representative rate for a national currency used for the purposes of the common agricultural policy, or in the stability of the exchange rate for such a currency, be permitted to apply, apart from the option left to the Member States to make use of the clause for discretionary relief in certain individual cases, in a general way to imports and exports of the agricultural products concerned.

15. The plaintiffs in the main action alleged further that Article 2 (1) is contrary to the principle of legal certainty which is inherent in the Community legal order. In their argument they maintained that once they had obtained export licences in respect of the contracts concerned in the dispute the issue of those licences ought to guarantee their right to complete their exports subject to the rules in force on the date of such issue without being exposed to charges resulting from an alteration in the monetary situation and the rules concerned therewith.

16. However, that line of argument ignores the consideration that once the monetary measure contemplated in Article 1 of Regulation No 1608/74 is taken application of the monetary compensatory amounts in trade is the direct consequence of that measure and is designed to compensate for its effects on trading conditions and the functioning of the common organization of the market on which the common agricultural policy is based.

17. The application in such a case of monetary compensatory amounts, which is due principally to the absence of a monetary policy harmonized as between the Member States, thus meets the needs of the system and precludes, especially where a monetary system is characterized by unstable rates of exchange for the national currency in question, traders from relying on the principle of legal certainty in order to claim a right to be exempted from increases in monetary compensatory amounts caused by the fall in value of that currency.

18. Furthermore, the sole purpose of the issue of the export licence is to authorize export of the goods concerned and not to guarantee the conditions under which the goods will in fact be exported. It cannot therefore in itself confer on the exporter a right not to be subjected to the consequences on trade of a fall in the value of a national currency.

19. The fact that subsequently the Commission provided, in Regulation No 243/78 of 1 February 1978 (Official Journal L 37, p. 5) that holders of export licences may ask for and obtain advance fixing of the monetary compensatory amounts is not decisive. Even if the unstable rate of increase of the monetary compensatory amounts appeared to the Commission when it adopted Regulation No 243/78 to create a new situation justifying an appropriate amendment of the Community legislation which existed at the time, it does not follow that that alteration is sufficient to justify the conclusion that a clause providing discretionary relief previously in application was unduly restrictive in nature. Moreover, the third recital in the preamble to that regulation reveals that the subject-matter governed by the latter regulation and that to which Regulation No 1608/74 may be applied is not identical, for Regulation No 243/78 allows the advance fixing of monetary compensatory amounts only for products in respect of which the levy or the refund too, has been fixed in advance.

20. It was also submitted by the plaintiffs in the main action that Article 2 (1) of Regulation No 1608/74 of the Commission breaches the principle that legitimate expectation must be protected.

21. However, the result of the foregoing is that it is unquestionably prudent management on the part of a trader faced with the decision of a Member State to allow its national currency to float, and faced with the fall in the value of that currency, to review, once the system of monetary compensatory amounts has been introduced, the conditions on the basis of which the contracts to be performed during the period of monetary fluctuation are concluded.

22. The transitional measures, which have been cited by the plaintiffs as precedents justifying their conviction that they should be protected against unforeseeable increases in the monetary compensatory amounts, deal in any case with either the possibility of altering the unit of account used for the common agricultural policy, or the devaluation of a national currency or the dollar, or, lastly, the withdrawal of a currency from the monetary snake as it existed at the time of the events in question. The sole purpose of Regulation No 1608/74 is precisely to consolidate such specific measures by laying down the criteria to be applied in each individual case considered, in order in particular to ensure uniform application by the Member States of the discretionary relief thus introduced.

23. Those considerations taken together suffice, lastly, to refute the complaint put forward by the plaintiffs in the main action that Article 2 (1) of Regulation No 1608/74 breaches the principle of proportionality inasmuch as it has the effect of exposing traders such as the plaintiffs to large and unforeseeable fluctuations in the monetary compensatory amounts.

24. In answer it must be emphasized that Regulation No 1608/74, being a provision providing for discretionary relief, is designed precisely to mitigate in the appropriate circumstances of fact and of law the hardship which may result for traders from the application of the monetary compensatory amounts and it also helps to prevent the introduction of the amounts from proving excessively burdensome for some of them. In the circumstances it cannot be held that such a regulation breaches the principle of proportionality by not affording traders more ample opportunity to benefit from a clause providing for discretionary relief.

25. On those grounds, the reply to the national court must be that consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Article 2 (1) of Regulation No 1608/74 of the Commission of 26 June 1974.

Costs

The costs incurred by the French Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As this case is, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT, in answer to the question referred to it by the Tribunal Administratif de Paris, by a judgment of 17 June 1980, hereby rules: