Rebel states face fine threat

Date: 12/12/1996

By Rory Watson and Ole Ryborg

ITALY and Germany will learn next month whether they are to be the first member states to face EU fines for ignoring European Court of Justice rulings.

Following a meeting of the European Commission's infringements committee this week, officials are now preparing to put recommendations to the full College of Commissioners at one of their first meetings in the new year.

The Commissioners will have to decide - probably on 8 January - whether to press ahead and ask the Court's permission to levy fines on both countries for failing to implement five separate judgements on EU environmental legislation.

As a starting point for calculating the size of the fines, officials are examining a minimum rate of 1,000 ecu per day, which would be increased depending on the gravity, duration and impact of the failure to apply the Union legislation.

In the case of Germany, two of the rulings - for failing to comply fully with Union rules on ground water and drinking water - were made by the Luxembourg-based judges as far back as 1991.

The prospect of an imminent decision will be welcomed by those who have criticised the Commission for failing to invoke sooner the new powers it was granted over three years ago by the Maastricht Treaty.

Despite the prospect of testing them on two of the Union's founder members, senior officials deny that the delays have been caused by fear of taking on some of the EU's largest member states.

“The Commission is clearly trying to find a framework to guide future decisions on recommendations to the Court of Justice on the level of fines which should be levied. It is quite a difficult decision to make,” explained one official.

In trying to devise a system, officials are considering whether parallels can be drawn with the method used to calculate the fines now levied on companies which violate the Union's competition rules.

But many believe that is not an appropriate model.

“I am not sure how valid this comparison is. The underlying question here is how to create a system that matches the fine to the offence and takes account of a member state's capacity to pay,” said one official.

Even once a system has been devised to calculate the level of fines the Commission believes should be imposed, few expect it ever to operate in a totally neutral way.

“The level of the fine to be imposed will be a political decision every time,” predicted one insider.

Senior officials are currently examining a list of six cases which could be suitable candidates for testing the new fines procedure.

Alongside the five environmental examples is a sixth case involving equal treatment legislation.

Supporters of the Commission's new powers believe that the mere suggestion of embarrassing a government by singling it out for potential fines may, on its own, be sufficient to make it fall into line and implement EU legislation.

As evidence they point to the case of Belgium, which six months ago was on the fines short list for not applying Union rules on the right of establishment of pharmacists. It has since put its house in order and the case has been dropped.

France has also been given a stay of execution over its failure to apply single market legislation. The government was on the original list examined by senior officials in July because it had attached what were considered to be protectionist conditions to its measures to ensure that blood supplies in the country were not contaminated.

The threat of fines has been provisionally lifted now that new legislation has been tabled in the country's national assembly.