APPLICA.TION/REQIJÊTE N" 11103,6/84 SVEN£IKA MANAGEP4ENTGRUPPEN AB ;dSWEDEN SVENSKA MANAGE.MENTGRUPPEN AB c/SUÈD E DECISION o1' 2 December 15 185 on tàe admissïoilit~of the applicatiort DÉCISION du 2 déoembre 1985 sur la recevabilité de l , requête Elrticle 2:i of the Convention : The Commission cannot examine in abstracto the compatibility ofa nanonal law with the Convention. A person who shosvs that,he ie personally a~fected by the application oFthe law he criticizes ntay cla(m to be a victim r,(a vialction of the Convenfion. Article 1, paragraph 2 of the F7rst Protocol : This p,rovision confirms that States nuty levy taxes or other contnbutions . ft is for natiomal authorities, on thebasis of their as.sessmeltt of poiitical, economic and socia.l needs, to decide ott the ievying of taxes or othcr contributions . 1he levying of a tax or other contriF.ution would only be in violation of the riZht to peacetul enjeyrnent of possessions if the person concerned was saddled svith anintolerable burden or if his financial aituakore was ovenûrned .Arflcle25dela Convention : la Commission ne saurait examiner in abstracto la compatibt7ité d'une 7oi nationale avec la Convention . Peut se prétendre victime d'une violation de l<t Ccmvention celui qui montre quil estpersonnellementa(fecté par l'app&- cation de la loi qu'il critique . Ftrpcle 1, paragraphe 2, du Protocole addù`ionnel: Cenedisposit'on confirme que [es Etats ont la faculté de percevoir des impôts ou aurries contributions .C'es t aux autorités nationales qu'il appartient de décider de la perception d'impôts cu autres contribut~ons, selon leur appréciation des nécea~sités politiques, économiques et sociales . 211 La perception d'un impôt ou autre contribution ne serait contraire au respect des biens que si elle imposait à l'intéressé une charge intolérable ou bouleverserait sa situation financière . THE FACTS (fran(ais : voir p. 224 ) The facts of the case, as submitted by the applicant, may be summarised as follows : The applicant is a Swedish company which is a subsidiary of the Swedish Employers' Confederation . The latter is a central organisation representing Swedish business enterprises with the function of watching over the interests of its members in the labour market, principally in respect of pay agreements with the trade unions, but also in other spheres that affect conditions in the business sector. The principal function of the company submitting the application is to provide the business sector and public organisations with high quality advanced management training and education in various professional fields . The company is thus involved in matters relating to personnel administration, product development, finance, data processing, measurement of results, pay systems, agreements and legal questions, recruitment, media services and business studies . At present the company has around 250 employees and its 1983 turnover amounted to 124 million Swedish crowns . Before the Commission the applicant is represented by Mr Michaël Hernmarck, attorney-at-law, Danderyd, Sweden . In 1975 the Swedish Trade Unions Confederation (LO) initiated a debate on the economic policy in Sweden . The new element in the debate was a proposed introduction of so-called employee investment funds (Ibntagarfonder) . Through these funds the LO envisaged a change in the economic power balance by increasing the influence of the einployees in industry and commerce by means of a transfer of the ownership of capital, one way or the other . The debate culminated in 1983 with the introduction of new legislation consisting of two new laws and nine amendments to existing laws . In their proposals the Swedish Government referred in particular to the international economic situation and stated inter a[ia : "The policy of stability is thus today more complex than during the period of swift progress after the war - and it therefore also means that new methods to solve the problems are required . The task is in short to combine an increasing profit with a just distribution, a stable price and cost development and a low uncmployment rate .212 Siace we now again face a situation where the profits of trade increase, this tim.é due inter alia to the enormous încrease in competitive power from the devaluation in 1982, it is of the utmostimportance + that the price and cost development in our country does not accelerate again so that the devaluation effi;ets are destroyed leaving us in a new cost crisis with harmful effects on trade balance and employment . To avoid such a development now as well aslater it would be necessary to decicle uponmeasures which counter the increase of profits leading te a further concentration of power and property in trade . On the contrary it is the task to rpread out the power and property se that more people partïcipate in the increase of property . Through this the conditions for lower increase in costs and bigger growth are created, while a juta distribution is notset aside but on the contrary intcnsified . Through this the conflict of the policy of stability is alleviated considerabdy and the pre-conditions created for a stable and employment-creating econoniical giowth . This is the decisive and bzisic motive for the Government to propose theemployee investntent funds . It is also the motive which in various forms has been brought forward in the debate concerning the funds, in Sweden as well as in other places . " The structure of the system wae based ona new law concerning a profit-sltaring tax and a neve law concerning the adrninistrationof the taxes through the Government pension fùnd system . It may be surnmarise~d as follows : Means of obtaining capital The Profit-sharing Tax Actregulates the manner in which the funds are to be raised to satisfy the requirements of the employee investment fundsfor the capitad rieeded. 'rhe obligalion to pay profrt-sharingtax embraces Swedish limited liability companies, co-operative associations, savings banks and certain insu rance companies . l)nder Section 1, the tax accrues to ihe State and is transferred to the National Pension Insurance Fund. The amount of tax corresponds to 20% of the "profit-sharing base" . This base is the rew profit of the company, after a`fde~ductible" amount has been allowed for . The deductible amount is either 6% of the payroll of the company which is liable to pay tax or 500, 0 )0 Swedistt crowns if théeompany soprefers . By real profit is rieant the nominal profit of the company for the fiscal year ;after, ttaking intoaceount fhe effect of inflation on the assets and liabilitiés of ttie company (Section 2) :Inaditiontotheprofit-sharingtax,théemploye .e itivestment funds 'shall be financed by au increase in the supplementary pension charge, vrhich Sivedish employers and the self-employed are bound to pay to rthé Goverrment . 213 Briefly, the system of general (State) pension and its financing is built up as follows : Swedish employees and the self-employed are covered by thé 1962 General Insurance Act. The insurance schemes consist of health insuiance; basic pension and supplementary pension insurance. Normally, pensions are paid after the person concerned has reached 65 years of age. The right to supplementary pension is based on the income frotù gainful employment. The person entitled to pension collects a larger or lesser number of pension points in relation to his income, upon which the amount of the supplementary pension benefit is based . The general (State) insurance scheme is financed through the levying of a number of charges under the Act on Social Security Charges and are paid by the employer and by the self-employed . One of these charges is intended to finance supplementary pensions . For 1984, it is levied at the rate of 10% of the employees' pay or of the income of the self-employed from his work. From the Bill on employee investment funds it appears that 0 .2-0.5% of the supplementary pension charge in the form of a special supplementary pension charge shall be paid to the boards of the employee investment funds . The additional charge for 1984 of 0 .2% is regulated in the Act on the Amendment to the Act on Percentage Rates for Levying Charges for Supplementary Pension Insurance . The profit-sharing tax is expected to bring in receipts of 1 .5-2 billion Swedish crowns per year until 1990 and the special supplementary pension charge is expected to bring in receipts in the region of 2-2 .5 billion Swedish crowns annually. The employee investment fund boards will thus have available amaverage sum of 4 billion Swedish crowns annually from 1984 to 1990 and a total of 28 billion Swedish crowns over the seven year period. However, a limit on the transfer of funds to the boards has been stated . This corresponds to an "investment capacity" of 2-2 .5 billion Swedish crowns per year . The administration of the capital The second new law passed in 1983 which is of importance in the employee investment fund system is the Act on the Statutes of the National Pension Insurance Fund. The capital received under the law on social security charges,ismanaged by a government body, called the National.Pension Insurance Fund (AP Fund). Further, it shall also-manage the capital that is collected from the new profit-sharing tax and the special supplementary pensionehargewhieh is intended to finance the acquisition of shares by the employee investment funds . Before the creation of the employee investment fund system, the assets of the National PensioaInsuranceFundwere managed by four independent boards . As a result of the new Statutes for the National Pension Insurance Fund five new fund boards, called "Empldyee.InvestmentFundBoards", were created . Each of them has nin e 214 members appointed by the Swedish Government. Five of the members shall represent the employee interest . The five boz.rds are to have regional links i northern, eastern, western, southern and central board) . As regards the management of the assets made available to the fund boards the followirig dircctivcs arc laid down in the Sra[utes of theNational Pension Insurance Fund : 34. The Fund Boards shall, within the limits of what benefits the supplementary pension insurance system and is compatible with general econontic policy, and taking iniu account the fuaetionin,g of the credit rnarket, manage the assets enirusted to theni by investing them en the capital market . The object of.their investments shall be to inrprove the supply of risk aapit[d to the bene,frt of Swedi sh production and employinent . The assets shall be invested so that the demand for a good vield, a long-ter m approach and spread of risk is satisfied . , _ . 36. An employee invesmtent fund board may invest the assets that the board manages . , . . 1 . in the shares of Swedish limited liability conipanies 2. in such convertible loan stock or loan stock: to which options to subscribe to new shares are attached as has been issued by such limited llability companie.s as are intended in 1, an d 3. as risk capital in Swecïsh co-operative associations . 37 . Para 2 . An employee investment fund board may not acquire so many of the shares registered on the stock exchange in a limited liability comparry that they amount to 8% or more of the total number of stiares in the company oi, if the shares have various différrent voting values, so that the voting rights attached to the shares amount to 8% or more of the total voting rights of the shzres in the company . The employee investment fund boards will primarily invest their assets through rhe stock market. This will be done in the norrnal situation by purchasing shares through .he Stockholm Stock Exchange . Eaeh of the five fund boards may acquire a maximum number of shares in quoted eoinpanies as corresponds to voting rights of 8% . The tive boards can thus together obtain voting righs of 40% iha quoted limitédliability company . There is no similar limitation on the acquisition. of shares in other companiés . As a result of acquiring shares in Swedish comp anies, th e boards of the employee investinent funds are entitled to exercise the voting rights of these shares at the members' meetings of the companies concerned and consequently influence to a greater ôr lesser extent the election of the Boards of Direetors of the companies and the direction of the companies' affairs. 215 A limitation on the voting rights of the fund boards is found in Section 38 para . 1 : An employee investment fund board shall, at therëquest of a local trade union organisation at a limited liability company in which the fund board has acquired shares or, if the company is the parent compauy of a group, at its Swedish subsidiaries, assign to the trade union organisation for a maximum period of one year at a time the right to vote for half the voting rights attached to the shares . By local trade union organisation is meant such an association of employees a s has the standing of a party in local negotiations with the employer . The voting rights are transferred from the fund board by "assigning" to the trade union organisation for a maximum of one year at a time the voting rights of the shares that the board manages . There is no obstacle preventing the board of an employee investment fund from voluntarily assigning voting rights for more than 50% of the shares . However, the right of the local trade union organisation to exercise vôting rights for the abovementioned percentage of the shares is unconditional . The boards of the employee investment funds shall in accordance with Section 28 in the statutes of the National Pension Insurance Fund annually transfer a certain income from the assets under administration to the three fund boards responsible for the disbursement of supplementary pensions. This income corresponds to 3% of the current value of the assets that the boards managed at the end of the previous financial year. Thè current value calculations are performed with the aid of changes in the consumer price index . Briefly, the system means that thë fund boards are to be responsible for paying a 3% real interest on managed assets mentioned above to the AP Fund system. The Swedish Law Council (Lagrddet) The proposal that the Swedish Government presented to parliament was under the Constitution submitted for scrutiny from a legal point of view by .an institution called the Law Council . This council is composed of three members from the country's supreme legal institutions, the Supreme Court and the Supreme Administrative Court . In the present case, two Supreme Administrative Court Judges and aSupreme Court Judge scrutinised the bill and gave their opinion on 3 November 1983 . Concerning the compatibility of the Government bill with the Swedish Constitution and the European Convention on Human Rights, the Law Council made the following statement : "In some statements of opinion it has been questioned whether the proposal is compatible with the Constitution and whether it is in accordance with Swedish international commitments . On the latter point, it is probably the convention that Swedén supported through the ratification of the First Protocol of March 20, 1952 to the Convèntion concerning the Protection of Human Rights an d 216 FundamentaL Freedoms that is referred to . According to Article 1 in the Protocol all rights of physical or juridical persons to their own property shall remain inviolate and nobody may have their property confiscated excéÉrt in the natiorral interest and under conditions laid down in the law andthe general principles of public law . The bodes which have received the proposal for their epinion and which have taken up the question of the compatihility of the present with the Constitution have not gone into the question in more detail . What they appear to be wishing to question is whether our legal system allows assets to bc taken from specific comparies to be used by organs dominated by employees in the collective employee int~sest . The Law Conncil for its part has the following commem to make . The assets are taken from business firms by Government taces in the manner prescribed in the Constitntion, viz. in accordance with laws ; the supplementary pension charges should alsc be regarded as taxes . The taqes are specially destinedfor the National Pension Insurance Fund . The Constitution contains no rules concerning limitations on the purposes for witicfi Government tax.es may be levied. The use of Government funds is deaidri by Parliament and the principal rule is that this shall be cone by budgetary means . However, Chapter 9, Section 2 in the Constitution allows the use oT Government funds for special purposes a.part from through the budget . Giving Government revenues special destination is admittedly being brought to an end and Parliament lias stated that no new special destinations should be introduced . There is nevertheless no constitutional obstacle to giving .taxes a speciaf destination . Nor is there anything to pre.vent Govennnent funds bevng made available to bodies in which a specific gro~ap o:f citizens has a guaranteed dominating influence. In the view of the Law Council no complaint can be made againsr. the proposed employee investmerLt fund system on the grounds of incompati~oility with the Constitution . Similaily, the Law Council finds that the proposal is not in conflict with our internationat commitments . The requirement in Article 1 of the above-menticined supplementary protocol that euch interference as is intended in tbe Article must be based on the "public interest" can be regarded as being satisfied in 4hat the assets will acerue to the National Pension Insurance Funcl and be managed by boclies subject to public law . T'he fact that the proposal also has otherpurposes such as strengthening the influence of eniployees over the business sector would not appear to lead to any other conclusion . " Summar y In surnmary, the complex of laws in connection with the parliamentary approval of the Government bill includes thr, following points :-AlargenumberofSwedishcompanieswillhavetosharr,acertain-mount of their pioPits with the State by means of a special tax called the profit-sharing tax . 217 - All business enterprises which are compelled to contribute to the State for supplementary pensions under the law on social security charges will be affected, regardless of their earnings via the additional surcharge . - The receipts from the above charges are destined for the acquisition on the open market of shares in Swedish limited liability companies .-TheowneroftheseshareswillbetheNationalPensionInsuranceFund , which is a Government organ . - Five of the nine fund boards, the Employee Investment Fund Boards, are assigned to tnanage the above-mentioned shares and through their use of the voting rights attached to these shares at annual general meetings to exercise influence on decisions regarding the affairs of the companies concerned . - The majority .of the members of the etnployee investment fund boards (five out of nine) shall represent the employee interests. - The local trade union organisations at the companies in which shares have been acquired can claim to exercise voting rights for half the votes attached to the shares . The trade union organisations will not themselves be the owners of the share capital of,the companies, but they may, exercise the functions of ownership (voting rights) attached to the shares that the fund boards acquire . The right of ownership will be retained by the State (AP Funds) .Finally,itappearsthattheSwedishGovernmentasamotivesawtheemployees investment funds as one element in their economic policy . Action appeared necessary to enable employees to participate in the earnings of business enterprises in order to improve the stability of long-term economic policy and to lower unemployment . COMPLAINTS (Éxtract) The applicant claims that Sweden has violated the following Articles of the European Convention on Human Rights and the First Protocol by virtue of its introduction in 1983 of the employee investment funds , - Article I of Protocol No . I to the Convention regarding the right of property for the following reasons : Article 1 of Protocol No . 1 to the Convention In the view ofthe applicant there is no doubt as to the existence of an interference with its property rights . The levying of taxes is regarded in Sweden as an interference in individual property rights, nor can anything else be assumed wi th regard to the European Convention . It is a case then of deciding if the interference is legally justified in accordance with the exception rules in the second sentence of the first paragraph and in the second paragraph of Article 1 . 218 The characteristic that normaliy distinguishes expropriation s the presence in a law of a stated expropriation purpose, an expropriation authority ând a sysiem of rules of ,ompensaton of persons suffering damage . These fundamental features of expropriation are absent as far as the fund taxes are concerned . It is after all hére not a question of the deprivatiori of possessions in the public interest oF the type intended when expropriation is referred to. Even if the fund imposkions are not taxes in the ?roper meaning of ehe word it is nevenheless difticult to place them for that reason inder the provisions of the second sentence . The applicant therefore considers that :he exception rule regarding expropriation is ùotapplicable in this instance . The application of the exception rule nn the second paragraph is a more eoatplicated matter. This paragraphcontains two material ndes that must be distinguished from each other in the presenrt case. The firstrelates to,the rights of member states to control the use of property in the general interest, viz . : to restrictthe,use by4le individual oŸ his property without having deprived him of-ownersh Ip of the said property . This provision can harrlly be applicable as it is a matter of an interference in the form of deprivation of propen)in this case . The second exception rule in the second paragraph concerns the rights of member states to enforce such laws as, they deem necessary to ensnre the payment of inxes or other contributions or penalties- . The wording here appears primarily to refer not tothe right of the state to Iev y taxes as such but to the laws deemed necessary to "ensure payment" of statutory taxes, viz. theia collection . If this is the case, nor is the secondexception ruleapplieable to the fund laws either, as they do not contain provisions of such a type . However, the rule appears to have been given a broader meaning in its application, namely to apply to the right to levy taxes as such . Should the question of violation be exainined on the basis of power to levy taxes [he applicant claims in the second instanee that the taxes se :rve no public or general interest. They have been created in order to meet the demands of certain trade union arganisations to gain power over Swedish business enterprises . These organisations have civil law status and are not public law bodies in rhe sense inænded by general or public: interest. 1?or this reason also the exception rules in the second paragraph of the Article are not applicable in Ihe present case . In any case, fiscal instruments may not be used fcr such purposes and the interference cannot be defended on the grounds of the exception rule in the second paragraph . The aims stated in the b311 beyond a shift in power are, in the view of the applicant, pretexts, and it ir, clear that those referred to above have neither had nor can have the claimed effects . In Ihis context, there isreason to exarnine the statements of the Law Council . The applicant cannot share the view of the Law Council that no obstacle is provided 3y the Swedish Constitution to Government ftrnds being placed at the disposal oforgans in which one group of citizens ("employees" and the local trade union organisations) are guaranteed a decisive influence . Even less can such an arrangement be considered 219 acceptable in view of the protection of property rights provided by the First Protocol . The Law Council has examined the provisions of the latter with reference to the public interest. The Swedish translation of the Protocol makes no distinction between the English phrases "public interest" in thefirst paragraph and "general interest" in the second paragraph . It is therefore unclear which of the two provisions the Law Council was referring to, and consequently it is impôssible to know the standpoint of the Council on the facts of the matter . The Conncil also found that the said interest, whichever it may be, can be regarded as being satisfied in that the tax receipts accrue to the National Pension Insurance Fund and are managed by an organ controlled under public law, viz. the five employee investment fund boards . In theview of the applicant; the organisation of the management of the assets as such cannot justify the application of the exception rules in Article 1 of Protocol No . 1 . It must be the material provisions in the Article on the protection of property considered against the background of the entire complex of laws that decides whether or not there has been a violation . This subject has been completely disregarded by the Law Council, possibly because of the lack of time available for it to submit its statement of opinion. If it is assumed that the exception rules in Article I are not applicable or that the interference cannot be defended on the basis of these rules, it remains to decide whether or not the fund laws are in compliance with the provisions of the first sentence of the Article :"Every natural or legal person is entitled to the peaceful enjoyment of his possessions" . Any person who is deprived of his property without compensation can hardly be claimed to be in peaceful enjoyment of his possessions. In thiscase,there would appear to be no scope for weighingthe general interest and that of the,individual .InacomparisonwithSporongandLbnrothv . Sweden, one similarity and one difference becomé apparent . The difference consists in the fact that the latter case involved the issue of control of the use of properry ; the applicant was never deprived of his property or any part of it . The Court therefore considered that in this case it was possible to draw a balance between the conflicting interests . This situation doés not exist in the present case . The similarity is that in both cases it is in théapplicant's legal situation itself that the requisite balance was no longer to be found. It is through the actual fund legislation that the applicant is being deprived of his possessions by virtue of the obligation to pay taxes incumbent on him and the amount of which is calculated in the assessment for profit-sharing tax and extra supplementary pension charge. On the basis of what has been stated above, the applicant claims that by passing the laws concerning employee investment funds seen in their proper contezt, Sweden has violated Article 1 of Protocol No . I to the Convention. 220 THE LAW (Extract) I . The applicant has complained that the, introduction in 19 83 of the legislation in Sweden coneernimg the employee investment funds involves a breach of Article I of Proto3ol No . 1 to the Convetitibn _ItisclearfroinArticle 25 para. I of the Convention that the Commission ca n receive an application froni a person, non-governmental organisation or groupof individuals only if such person, non-governmental organisation or group of individuals can clairi to be a victim by one of the High Contracting Parties of the rights set forth in the Ccnvention . Pdoreover ttie Commission is competent to examine the compatibility of domestic legislaiion with the Convention only with respect to ies application in a concrete case, whila it is not competent to examine in ahstracto its compatibility with the Convention . Aosordingly the Commission will only examinethe applicant's complaints insofar as the legislation in question affects the applicant company itself . Arlicle I of l'rotocol No . I to the Convention reads : Every natural or legal person is entitled to the peaceful enjoyment of his possessions . No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for bv law and by the general principles of international law . The preceding provisioris shall not, however, in any way irnpair the right o f a State to enforce such laws as it deems necessary to control the use of property in accordance with thé geüéral interest or to secure, the payment of taxes or'other coruributions or penalties. The applicant has alleged that the levying of a profit-sharing tax upon it and the obligatioin to pay an increase in thr, supplementary perision charge are an interlerenr,e with its property rights which, iherefore, ean only be justified insofar as the interlerence is legally justified n accordance with the exception rtdes in the second sentence of the firstparagraph or the second paragraph of Article 1 of P'rotocol No . 1 . However, the applicant mainiains that nione of the exception rules apply . The characteristics that distinguish expropriation are absent in the present ease . Furthermore the case does not concern the control of,the use of property and finally, should the case refer to the power i:o levy taxes, the applicant claims that the taxe,s serve no public or general interest but have been created only in order to meet tlte demande. of certain trade union organisations to gain power over Swedish business enterprises. The applicant coricludes therefore that it can only be examined whether the Swe(hsh laws are in compliance with the first sentenee of Article I of Protocol No. 1 which is noe the case since a deprivation of possessions has taken place . An:;cle 1 of Protocol No . I to the Corivention secures to everyone the right to peaceful enjoyment of his possessions . 221 The European Court of Human Rights has defined the general purpose of that provision as follows : "By recognising that everyone has the right to the peaceful enjoyment of his possessions, Article 1 is in substance guaranteeing the right of property . This is the clear impression left by the words "possessions" and "use of property"(in French : "biens", "propriété", "usage des biens") ; the "trava[a préparatoires", for their part, eonfirm this unequivocally : the drafters continually spoke of "right of property" or "right to property" to describe the subject-matter of the successive drafts wbich were the forerunners of the pfesent Article 1 ." (Eur. Court H.R., Marckx judgment of 13 June 1979, Series A no . 31, para. 63) . " In the present case the Commission recalls that the possessions of which the applicant has been and will be deprived are the sums of money it must pay under the Profit-sharing Tax Act and the supplementary pension scheme . The Commission finds that this should be regarded as an interference with the applicant's right to peaceful enjoyment of its possessions and that, therefore, Article I of Protocol No . 1 is applicable in the present case . The essential point is thus to establish whether that interference was justified . The applicant maintains that the secondsentence of the first paragraph of Article 1 is not applicable in the present case. In that the Commission agrees . Although there is no reference to "expropriation" as such in the paragraph in question, its wording shows clearly that it is intended to refer to formal or de facto expropriation which the Commission finds does not occur in the present case . The applicant also maintains that the justifiable interferences as set out in the second paragraph of Article 1 do not apply either . In this respect the Commission cannot agree . The sums of money to be paid relate either to a profit-sharing tax or to a contribution to the Swedish pension system and the interference therefore falls under the notion "to secure the payment of taxes or other contributions" as set out in the second paragraph of Article 1 . The power. of taxation is expressly recognised hereby and includes - as quite rightly indicated by the applicant - also the right to levy taxes as such . Though it is certain that no general prohibition of taxes payable exclusively out of the tax-payer's capital can be derived from Article 1, the Commission finds that a financial liability arising out of the raising of taxes or contributions may adversely affect the guarantee of ownership if it places an excessive burden on the person concerned or fundamentally interferes with his financial position . However, it is inthe first place for the national authorities to decide what kind of taxes or contributions are to be collected . Furthermore the decisioüs in this area will commonly involve the appreciation of political, economic and social questions which the Convention leaves within the coinpetence of the contracting States . The power of appreciation of the Contracting States is therefore a wide one .2 In the present case the Commission recalls that the applicant is ofthe opinion that the etnployee investment fund legislation, after a scrutitrv of the facts, is no more than the expression of a desire for a different distribution of wealth and power and greater trade union influence through joint ownership . The outcome cf the transactions is in no way different from transactions corrcerning the na?ionalisation of industry aiming at the Swedish State becoming the actual owner . The reasons stated by thc (iovernrnent are, in the applicant's ooinion, rnerely a pretexu intended to conceal the raal point, which is the demands of the, trade unions associated with the Swedish labour movement to influeice the Swedish business enterprises . As already mentioned above, the Convention leaves it to the Contracting States to determine their political, economic and social policies and Article 1 of Protocol No. 1 to tae Convention is not intended to prolect any specific political view or system. Article I is a guaranr,ee within the dernocratic States Parties to the Convention, securiug the peaceful cnjoyment of possessions and it is in this light that the Commission examines the interference imposed on the applicant . The circumstances of the present case show that the applicani . is boqnd to pay a new tar: which amounts to a certain percentage of its profits . Furthermore it has been established that the applicant must pay an increase in social pension charges amountin; to 0.2-0.5 per cent. The Commission cannot find that ~hese obligations affect the applicant'a guarantee of ownership or interfere with its finaneial situation to such a:n extent that this could be considered disproportionate or an abuse of the Contracting Party's right under Article 1 of Protocol No . I to levy taxes . It rnay be true that the airn of these transactions vtcludes the creation of a diffierent policy in the economic tield . ]-Iowever, although opinions evidently differ as to the fairness of such policy rhe Commission considers that it was one which the Government were entitled to pursue . Accordingly the legislation concerning the employee investment funds did not infringe the applicant's rights under Article 1 of F'rotocol No. 1. - . . , It fcdlotvs that this part of the application is manifestly ill-founded within the meaning of Article 27 para . 2 of the Convention . 223