Member states which ignore ECJ to face tough penalties

Date: 09/01/1997

By Rory Watson

LAWBREAKING member states face fines of up to almost 800,000 ecu per day under a new get-tough policy agreed by the European Commission.

After months of intricate internal negotiations, the Commission has devised a complex formula to establish the scale of the financial penalties which should be levied on EU governments which ignore judgements from the European Court of Justice.

The first test of the policy is expected to come within the next fortnight when the Commission considers whether to press ahead with five cases against Germany and Italy for not implementing Union environmental legislation despite ECJ rulings against them.

The fines the Commission will eventually recommend the ECJ should levy on recalcitrant member states and which the judges are expected to endorse will be calculated on the basis of a minimum starting rate of 500 ecu per day.

This could be significantly increased by consideration of three key factors.

The first would take account of the seriousness of the repercussions of a member state's refusal to implement the Luxembourg-based Court's judgement.

The second would relate to the length of time a government had ignored the judges' ruling. The combined impact of these two variables could multiply the basic daily rate by as much as 60 times.

In order to strengthen their deterrent effect, the Commission has decided that the penalties should also take into account a member state's ability to pay and its relative political importance in the Union.

This would be determined by a country's gross domestic product and to establish a link between the offence committed and the influence a government enjoys in determining EU legislation by the number of votes it has in the Council of Ministers.

This would mean that any fine imposed on Denmark would always be multiplied by 3.9&percent; and a similar penalty for Germany the Union's most populous and economically powerful member state by 26.4&percent;.

The various factors have produced a sliding scale of penalties which confront the EU's larger members with the prospect of increasingly hefty fines.

For Germany, these range from 13,200 to 792,000 ecu per day, while for a medium-sized country such as the Netherlands, the spectrum runs from 3,800 to 228,000 ecu, and for Ireland from 1,200 to 72,000 ecu.

The Commission is undoubtedly hoping that the potential scale of the fines which it has now indicated could be imposed will convince foot-dragging governments to implement ECJ decisions before they become involved in another high-profile legal battle.

But as one senior official confirmed: “Despite the general system, each case will be taken on its merits, leaving the way open for wide-ranging discussions on the level of fines to be imposed.”