C-153/97

GRAJERA RODRÍGUEZ v INSS AND TGSS

OPINION OF ADVOCATE GENERAL LA PERGOLA delivered on 15 October 1998 *

* Original language: Italian. applied to revalorisation of a pension 1 — Case C-25WH Lafiicnte Nielo [19%] ECR1-4187 and Joined becoming payable at the time of pay Cases C-31/96, C-32/96 and C-33/96 Naranjo Arjona and Others [1997] ECR 1-5501. ment of the last contribution in Spain — 2 — Sec Council Regulation (EEC) No 1408/71 of 14 June 1971 be regarded as contrary to Articles 48 on the application of social security schemes to employed icrsons, to self-employed persons and to members of their and 51 of the Treaty establishing the familics moving within the Community, as amended, updated European Community? and adapted, inter alia: by Council Regulation (EEC) No 2001/83 (OJ 1983 L 230, p . 6); by Annex I, Part VIII, of the Act concerning the Conditions of Accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties (hereinafter 'the Accession Act', OJ 1985 L 302, p. 170); and by Council Regulation No 1248/92 (cited below at footnote 3). There were further amendments to the Regula tion even after the publication of a consolidated version in December 1992 (OJ 1992 C 352, p. 1). (2) In order to guarantee equal treatment 3 — Annex VI to the Regulation lays down specific rules for for migrant workers in matters of social implementing the legislation of certain Member States.

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OPINION OF MR LA PERGOLA — CASE C-153/97

security, must the basis for determining tion of the insured risk, divided by a fixed the Spanish pension be calculated by ref­ number (112). If, for all or part of the refer­ erence to what would have been the ence period, the worker concerned was not bases for the migrant worker's contribu­ under an obligation to pay social security tions if he had stayed in Spain during the contributions, the bases applicable to fill such calculation period preceding materialisa­ gaps will be the minimum bases set annually tion of the risk provided for on a general by law for adult workers. The basic amount basis by Spanish legislation?' is then multiplied by a percentage which varies according to the number of years for which the worker has made contributions, with the proviso that the amount of the pen­ sion resulting from this calculation may not 2. I do not believe that we can fully under­ be less than the minimum (or, as the case may stand the questions referred here without a be, more than the maximum) fixed annually brief summary of the relevant rules of national by Spanish law. law and the decisions made by the Court in 5 Lafuente Nieto and Naranjo Arjona before even considering the subject-matter of the proceedings in the national court.

dora). That basic amount consists of the total del Estado of 29 June 1994, No 154, p. 20658), and Real Decreto 2064/1995, de 22 de diciembre, por el que se aprueba of the contribution bases of the worker con el Regolamento General sobre Cotización y Liquidacíon de cerned in the 96 months before materialisa otros Derechos de la Seguridad Social, Articles 8 and 23 (BOE of 25 January 1996, No 22, p. 2295)).

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rialisation of the risk are assessed at face value, law. The Convenio entre la República Federal whereas the remainder — in respect of the de Alemania y el Estado Español sobre Segu- first 72 months of the whole period of 8 years ridad Sodai, signed on 4 December 1973 — are subject to revalorisation in line with which came into force on 1 November 1977 1 the consumer price index published by the (hereinafter 'the Convention'), 1is of special 9 Instituto National de Estadística. interest for present purposes, particularly Article 25(1)(b) thereof concerning the calcu­ lation by the competent Spanish authorities of the amount of the old-age pension (and, under Article 26(1) of the Convention, of invalidity pensions). That article, which is not the subject of an express reservation under 12 Annex III to the Regulation, provides: 'if the whole or part of the contribution period chosen by the claimant for the calculation of his own basic amount of benefits is completed 5. The determination of the basic amount of in the Federal Republic, the competent Spanish old-age pensions (and of benefits for perma­ institution shall determine that basic amount nent total invalidity due to non-occupational by reference to the contribution bases in force illness), under the system described above, is in Spain during that period or part thereof for less straightforward in the case of migrant workers in the same category as the person workers who, having completed periods of concerned.' contribution in Spain, have worked (and paid contributions) in another Member State during the eight years preceding materialisation of the risk. Before 1 January 1986, the date of the accession of Spain to the Community, the determination of the basic amount of benefits payable to such workers was regulated by a succession of bi-or multilateral conventions on social security, concluded by Spain with 6. The Convention and other international almost all the existing Member States (with agreements concerning social security signed the exception of Denmark, Ireland and by Spain ceased to be in force (apart from 10 Greece) and incorporated into its national provisions which were the subject of express

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OPINION OF MR LA PERGOLA — CASE C-153/97

reservation ) on 1 January 1986, when, as I 8. When Spain (and Portugal) acceded to the have said, the Regulation became part of Community, Article 47(1) of the Regula­ Spanish law. Under Article 6 of the Regula­ tion was extended by the addition of a new 14 tion, it replaced, as a matter of principle, provision, subparagraph (e) (now subpara­ and only as regards its scope rattorte personae graph (g)), according to which, where the et materiae, any previous social security con­ national legislation to which the competent vention which was exclusively binding on two social security institution is subject requires it or more Member States. to calculate benefits on the basis of average contributions, that average is to be deter­ mined 'by reference only to those periods of insurance completed under the legislation of the said State.'

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GRAJERA RODRÍGUEZ v INSS AND TGSS

to the Regulation, in order to ensure its cor­ down two important principles. First of all, it rect interpretation. made clear that Article 47(1)(e) (now sub­ paragraph (g)) of the Regulation in fact con­ cerns a method for calculating benefits based on average contributions like that provided for by Spanish law (see paragraphs 16 to 19 29). 10. In its ruling on interpretation in Lafuente Nieto, which concerned the calculation of social security benefits payable to a Spanish worker who became incapacitated for work in Germany and who had paid no contribu­ tions under the Spanish legislation during the requisite period for the determination of the 18 average contribution basis, the Court laid

They require C-251/94, cited above at footnote 1, paragraph 42, and Joined Cases C-31/96 to C-33/96, cited above ibidem, paragraph migrant workers to be protected from any 24), The need to specify the methods of applying Article 47 of the Regulation for Spain is, moreover, explicitly men tioned in the preamble to Regulation No 1248/92 (see the thirty-second recital). Note that subparagraph (b) of para graph 4, cited above, was amended by Council Regulation 19 — The Court thus dismissed the plaintiffs arguments that the (EC) No 1223/98 of 4 June 1998 amending Regulation (EEC) method for calculating invalidity benefits under Spanish law No 1408/71 on the application of social security schemes to falls within the rule in Article 47(1)(b) of the Regulation

As the L 168, p. 1; see below, point 21). Court rightly pointed out, under the Spanish social security 18 — Mr Lafuente Nieto was employed in Spain (until 1969) and system calculation of the benefits is not based on the amount then in Germany (until July 1990), where he became wholly of earnings, contributions or increases received by the worker and permanently incapacitated for work. The competent concerned during the whole of the insurance or residence social security institution calculated the amount of the con periods completed by him (see Case C-251/94, cited above tested pension as if contributions had been paid on the at footnote 1, paragraph 21). The Court also rejected the minimum basis for the years in which he had worked and Commission's argument that the rules in Article 47(1)(c) do paid contributions in Germany (that ís to say, for the whole not apply to the Spanish legislation.

I would circumstances in which the rule in Article 47(1)(c) was point out, in passing, that the fact that this case concerns a inserted into the Regulation 'indicate that it was intended different benefit (Spanish old-age pension) from that at issue precisely to cover a system of calculating invalidity benefits in Lafuente Nieto does not mean that this precedent is irrel such as that laid down by the Spanish legislation, which evant in the present context. Under Article 40(1) of the effectively provides that, unless specified otherwise, benefits Regulation, the provisions of Tide III, Chapter 3, of the arc to be calculated on the basis of average contributions' Regulation laying down specific provisions concerning (ibid., paragraph 23). Second, the Court found that the addi old-age pensions and death are to be applied by analogy to tions made by Regulation No 1248/92 (see above, paragraph workers who become incapacitated and who — like Mr Lafu 9) to Annex VI to the Regulation, even if they entered into ente Nieto — have been successively subject to the legisla force after the events in issue in that case, confirmed the fact tion of two or more Member States, at least one of which is that Article 47(1) 'which refers precisely to the calculation based on a distributive model of insurance (such as the of the theoretical amount of the benefit, contains rules which Spanish system). concern the Spanish legislation' (ibid., paragraph 28).

adverse effect stemming from the exercise of questions set out above (see point 1) to the their right to freedom of movement, such as Court of Justice. Mr Graj era Rodríguez, the. the possible reduction in the amount of social plaintiff in this case, became entitled to a security benefits payable to them. Article Spanish old-age pension on 2 February 1993, 47(1)(e) (now subparagraph (g)) of the Regu­ having completed periods of contribution to lation cannot therefore be interpreted, not the Spanish social security system (from 1953 even by way of exception, so as to allow the to 1961 and from 1967 to 1969) and to the use, to the detriment of migrant workers, of German system (from 1961 to 1967 and from a method of calculation based on minimum 1969 to 1993). Therefore he did not pay con­ 20 rather than average contributions. Nor, tributions under Spanish law during the period according to the same judgment, can that cal­ laid down by the social security legislation culation be based on the amount of contribu­ for the determination of his average contribu­ tions paid in the Member State of emigra­ 21 tion basis (3 February 1985 to 2 February tion. The reference contribution basis must 1993). As is clear from the order for refer­ always be that provided for by the national ence, the pension awarded to him by the INSS legislation which would have been applicable if the person concerned had retained an obli­ amounting to PTA 5 141 per month (includ­ gation to pay contributions under the legisla­ ing the increments applicable) was calculated tion of the Member State responsible for pay­ from a basic amount of PTA 2 873, resulting ment. However, the theoretical amount of the from the sum of the contribution bases cor­ benefit thus obtained is to be duly revalorised responding to the contributions actually paid and increased as if the person concerned had by Mr Grajera Rodriguez during the 96 continued to work under the same conditions months immediately prior to 30 June 1969 in the Member State in question (see para­ (date of payment of his last Spanish social 22 graphs 30 to 43). security contribution before he emigrated to Germany) and the division of the amount thereby obtained by 112. At first instance, the Juzgado de lo Social (Social Court), Madrid, granted Mr Grajera Rodriguez's application and ordered the INSS to use a basis of PTA 149 988 for calculation of the monthly amount, apparently set by reference to the maximum statutory annual bases for manual workers in 11. Following the judgment in Lafuente the period from 1 February 1985 to 31 January Nieto, the Tribunal Supremo referred the 1993 inclusive; this was because the average monthly wages actually received by the plain-

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GRAJERA RODRÍGUEZ v INSS AND TGSS

tiff in Germany in the last eight years of his to Annex VI are not even known. Apart career were far higher than (in fact more than from that — the Tribunal Supremo points out double) those Spanish maximum bases. The — there has been a significant improvement judgment at first instance was quashed by the in the level of social protection provided by Tribunal Superior de Justicia (High Court of the Spanish system only in the last few decades, Justice), Madrid, which essentially confirmed through increases in salaries as a result of that the calculation made by the INSS was overall economic growth and the gradual correct, whereupon Mr Grajera Rodríguez bringing of contribution bases into line with lodged an appeal in cassation with the refer­ 25 actual wages. On the other hand, according ring court to ensure uniformity of the law to the national court, the array of criteria for (para la unificación de doctrina), arguing that revalorisation (single and uniform percent­ the judgment appealed against conflicted with ages, lump-sum increments, mixed improve­ judgments recently handed down by other ments) applied to pensions in the Sixties and Spanish courts of law and with the decision 23 in the first half of the Eighties has resulted in of that court of 27 March 1995. a 'concentration' of social protection on min­ imum pensions, with a marked trend for the

view that the method of calculation under the 25 — As the Spanish Government in its written replies (see above, footnote 24) and the national court point out, in the period Regulation appears likely to lead to a dif­ from 1944 to 1958, characterised by a strict incomes policy which allowed the two social partners no room for contrac­ ferent outcome from that intended by Articles tual independence, social security contributions reflected 48 and 51 of the Treaty. The mere revalorisa­ salaries fixed by law, according to branch of activity and professional category. Subsequently, from the time of the tion of the theoretical amount does not ensure Ley de Convenios Colectivos of April 1958, the tendency for contributions to reflect actual wages disappeared because, equality of treatment for migrant and non- whilst wages could be subject to increases negotiated by col­ migrant workers where the person concerned lective bargaining, contributions were still linked to the minimum wage. Following the 1963 reform which intro­ ended his working life in another Member duced a general minimum wage, the Spanish legislature — in order to halt the progressive decline in standards of social State and the periods of contribution in Spain protection caused by the disparity between actual salaries were completed a long time ago. In many and notional salaries for the purposes of contributions — established a tariff of uniform bases for each professional cases the historical bases corresponding to the category not linked to the actual wages of individual workers and subject to periodic revision. A mixed system of tariff contributions paid by the worker during the bases and supplementary individual bases (as a percentage of the former) was introduced in 1972 in order gradually to period referred to in Heading D, paragraph 4, bring contributions into line with actual wages. And it is only since 1979 that Spanish law has used the current system of contributions calculated on the basis of actual total pay, subject to minimum and maximum limits. See also M. A. Olea-J. L. Tortuero Plaza, Instituciones de Seguridad Social, Madrid, 1992 (13th edition, revised), pp. 449 and 450. 23 — Sala 4a, Ar. 2560.

As is clear from the second question referred for a ruling, the Tribunal Supremo takes the view, in line with its own case-law on the 30 13. The order for reference states that this point, that, in order to achieve full updating case cannot be decided on the basis of the on objective bases of the benefit payable to principles laid down by the Court in Lafu- the worker concerned in circumstances such ente Nieto. That judgment concerned the as those described, the contribution basis to interpretation and validity of Article 47(1) of be taken into account for the determination the Regulation in the version predating Regu­ of the social security benefit at issue should 28 lation No 1248/92 (see above, point 8); be an average between the maximum and the moreover, it requires the relevant revalorisa­ minimum bases set by the provisions in force in Spain during the reference period — that is to say, during the 96 months prior to mate­ rialisation of the risk — for the relevant pro­ 26 — See Desdentado Bonete (op. cit. supra, footnote 24), p . 95, footnote 29 (with reference to L. E. de la Villa-A. Desaden- fessional category. 'Given that it is impossible tado Bonete, Informe sobre L· reforma del sistema español de in practice to reconstruct the elements of an la Seguridad Social, Madrid, 1983, pp. 94 to 98). Note, inci­ dentally, that the author is the Magistrado of the Tribunal insurance career in Spain, the average basis Supremo who drafted the order for reference in the main proceedings. constitutes [again, according to the Tribunal 27 — Law No 26 of 1985 provides: 'Las pensiones que se causen Supremo] an amount weighted in accordance con aplicación de las modificaciones introducidas en la pre- sente Ley, serán revalorizados al comienzo de cada año' with the remuneration of an average worker (Article 4); the fact remains that 'las deviaciones que pud- from the appropriate professional category.' ieran producirse, sobre las previsiones de inflación para cada año (...), serán tenidas en cuenta en el año siguiente para However, the national court points out that mejorar todas las pensiones del sistema que sean inferiores al salario mínimo interprofesional' (fifth additional provision). it is not on the question whether the average As regards the frequency of revalorisations of pensions, contribution bases of the last eight years decreed by ordenes ministeriales from 1956 — after an interval of eight years before the second (in 1964) — they occurred should be used (rather than those prior to every two years from 1964 to 1970, and annually thereafter (except in 1976 and 1978 when revalorisation took place twice a year): see A. Desdentado Bonete-B. Fernández Fernández-E. González-Sancho López, La reforma de las pensiones de la Segundad Sodai, Madrid, 1986, p . 128.

emigration) that it seeks a ruling from the judgment in this case — that where applica Court of Justice: 'the choice of such factors tion of that provision 'so interpreted proves [for updating] is a matter for national law.' less advantageous, for workers who were The doubts raised by the Tribunal Supremo already employed in another Member State concerning the validity of Heading D , para before the Regulation entered into force in graph 4, of Annex VI to the Regulation relate the first Member State, than the application to another matter: given that, according to of a previous convention between those two the case-law of the Court of Justice, a Spanish States, the competent court should, by way of migrant worker has the right to the same exception, apply the rules laid down by that

The national court makes clear that it is inclined to answer that question in the negative and points out that, under the system of updating laid down by the provision in issue, a migrant worker is placed on the same footing as a non-migrant 15. I have already referred to the case-law of worker in a piecemeal and arbitrary fashion. the Court on the objective of Articles 48 to It would therefore be very difficult for such a system to make good the reduced value of benefits deriving from a calculation based on 31 — The plaintiffs in Joined Cases C-31/96, C-32/96 and C-33/96 contributions in the distant past. were all Spanish nationals who, having been employed in Spain for some years, emigrated to Germany, where their working life came to an end. As they had exercised their right to freedom of movement before 1 January 1986, the Court, following my Opinion of 17 June 1997 on this point (cited above, footnote 5, paragraph 32), held that the prin ciples it had laid down in Rönfelat (Case C-227/S9 [1991] ECR I-323) and Tbévenon (Case C-475/93 [1995] ECR I-3813) were applicable to workers in the position of Mr Naranjo Artona, Mr Vicente Mateos and Mrs García

The Court held that it could not be ruled out that application of interpretation laid down in the earlier judg the provision contained in Article 25(1)(b) of the Conven ment in Lafuente Nieto, which I have tion (see above, footnote 12) might result in more favourable treatment for the plaintiffs than that provided for by the described above (sec point 10). The Court Regulation and concluded that it was for the national court to ascertain whether that was the case. also stated — and this is of relevance to the

51 of the Treaty. Those provisions, as the of different rules to comparable situations Court has held in numerous judgments, fur­ without objective justification. ther the establishment of the greatest possible freedom of movement for Community workers and are therefore intended to ensure that those workers do not lose the social security advantages guaranteed by their national legislation following emigration to another Member State. Such an effect might dissuade a Community worker from exer­ cising his fundamental right to freedom of 16. In the present case it is not disputed that the provision of the Regulation which requires movement and would therefore constitute an 32 the basic amount of the Spanish old-age pen­ obstacle to such freedom. The essential aim sion to be determined on the basis only of the of Regulation No 1408/71, adopted under insurance periods actually completed under Article 51 of the Treaty, is to ensure that social the Spanish legislation — regardless of whether security schemes governing workers in each such periods were in the recent or distant Member State who move within the Commu­ past — covers both migrant and non-migrant nity are applied in accordance with uniform workers without distinction. Community criteria. To that end it lays down a whole set of rules founded, in particular, upon the prohibition of discrimination on grounds of nationality or residence and upon the maintenance by a worker of the rights acquired by virtue of the social security schemes which are or have been applied to 33 him. That principle of equal treatment pro­ hibits not only overt discrimination but also As has been observed, however, the order for all covert forms of discrimination which, by reference points, albeit tentatively, to a pos­ applying distinguishing criteria other than citi­ sible disparity in the treatment of the two zenship or residence, in fact achieve the same categories of worker. Such discrimination, 34 result. However, still according to the settled were it to exist, would concern only some, case-law of the Court, breach of the general but none the less presumably the majority of principle of equality presupposes the applica­ migrant workers. It seems to be a common tion of the same rule to different situations or trend in Europe for Spanish migrant workers to spend the last years of their insurance career abroad and to have achieved in their host country (especially if, as is often the case in proceedings brought before the Spanish courts, the host country is Germany) a level of earnings far higher than either the Spanish average salary or the minimum contribution bases applicable for the professional category

in question. Thus all migrant workers who from actual remuneration) in the last eight have spent the last years of their working life years of their working life immediately pre­ and final contribution periods outside Spanish ceding the attainment of pensionable age. territory would be placed at a possible disad­ Accordingly, the bases used for the calcula­ vantage by Community legislation on the tion will, as a rule, have reached their highest determination of contribution bases and the level in the whole of the working life of the period of payment to be taken into account person concerned. — where they acquire the right to a Spanish old-age pension following application of the aggregation mechanism mentioned above (see above, point 7). That is precisely the position of the plaintiff in the present case. According to the case-law of the Court, any discrimina­ tion is not eliminated by the mere fact that there is no such discrimination against other migrant workers who find themselves in the reverse situation (last eight contributory years 37 spent in Spain). In addition, the calculation of the benefit will not be hampered by the administrative and statistical problems which inevitably compli­ cate such operations in the case of social security contributions made decades earlier. Difficulties of that sort seem, on the contrary, to be unheard of at the current stage of leg­ islative development of the Spanish social security system, which began with the reform 38 of 1979. More specifically, taking the most 17. Why is the Tribunal Supremo asking the recent remuneration as the basis for the cal­ Court for a ruling on the compatibility with culation of the average remuneration means the objective of Article 51 of the Treaty of the that problems do not arise over the lack of rules implementing the Spanish legislation on verifiable data regarding contribution bases in old-age pensions laid down in Heading D, the distant past, nor over the technical com­ paragraph 4, of Annex VI to the Regulation? plexities inherent in updating the pensions Looking at the grounds of the order for refer­ resulting from the calculation, which requires ence, it seems to me that the reasons that can a case-by-case analysis of a series of legisla­ be discerned are twofold. There are also two tive instruments and administrative decisions ways in which non-migrant workers are dating back over a long period and often con­ favoured by the Regulation in conjunction 39 cerning benefits of a different type. In other with the provisions of Spanish law. As I have words, according to the national court, the said several times, in contrast to the position system of updating laid down by the relevant regarding (most) migrant workers, the basic provisions of Annex VI to the Regulation is amount for non-migrant workers can be cal­ not only discriminatory in theory but inef- culated from the contribution bases (and thus

18. It cannot be denied that the problems highlighted by the Tribunal Supremo are gen uine and serious. However, I do not believe that they are capable of affecting the validity In my view, it follows that the possible dearth of Heading D, paragraph 4, of Annex VI to of reliable objective data on earlier contribu the Regulation. On this point I think I can tion bases 40 cannot constitute an obstacle to endorse the line of argument pursued by the the implementation of Heading D, paragraph Commission in these proceedings: according 4, of Annex VI to the Regulation, and still to that institution, intervening in these pro less an obstacle such as to render the provi ceedings, it is not possible to speak of the sion invalid. Furthermore, where it is genu invalidity of the method of updating laid inely the case that no reliable data are avail down by the provision in question because in able, the general rules on evidence in force in fact it does not prescribe any particular method. the Spanish social security system will be That interpretation of the provision at issue applicable.

alone. On the other hand, the Court has held ments — some of which are of a composite that the implementation of the Regulation can nature inasmuch as they cover both personal under no circumstances result in a reduction in the value of the social security benefits due to the person concerned under the national law of a Member State. The Court, therefore, 40 — The 'replacement' bases fixed in 1992 by the INSS in the circular cited above cannot of course be considered to be confined itself to indicating a starting point such (see above, footnote 24 and relevant section of text). and target which the competent social secu 41 — I would point out, for instance, that in the written replies of the Spanish Government (see above, footnote 24) reference rity institution (or, in cases of dispute, a is made to the individual employment card (cartilla del tra- bajador), which workers were obliged to hold and keep up national court) should bear in mind when to date in order to provide evidence of the professionai cat- applying the Community rules. The selection egory to which they belonged (and thus, before 1963, of the relevant uniform contribution basis). That document had to and use of the most suitable instruments of contain a chronological record of a worker's employers and his professional category in each successive job. If a cartilla national law for achieving the complete revalo were lost the Spanish social security institutions would risation of the benefit due to the worker accept any other means of proof, such as production of wage slips or salary statements. As regards the determination of taking that starting point as a basis is, how contribution bases according to category, introduced by the legislature in 1963, the Spanish authorities state that such ever, another matter. It seems to me that such bases were published annually in the BOE.

and substantive aspects — adopted periodi to the worker 'as though he had continued to cally by the legislature to be an impractical work in Spain', carried out by the national solution, it will have to achieve by other court in the most favourable manner allowed means the objective laid down in Article 51 by national law — the final amount of the of the Treaty of guaranteeing full maintenance benefit resulting from the calculation may be of the purchasing power of the theoretical very small. That possibility, it is almost super benefit payable to the worker: the provision fluous to point out, arises because of the fea at issue is, therefore, lawful from the point of tures of — and, I would even say, from the view considered here. It is not for the Court very ideology and political philosophy behind to provide information on the various theo — the Spanish social security legislation of a retical solutions provided for by the national previous era; it cannot, therefore be said to legal system concerned. That point has already have any implications for the assessment of

42 Lafuente Nieto, may be considered equi virtue either of national law alone or of table criteria that are sufficiently easy for the national law supplemented, where necessary, 43 national court to apply. by Community law.' Accordingly, the sub stantive and procedural differences between the social security systems of the individual Member States, and thus in the rights of the persons employed there, are unaffected by 44 Article 51 of the Treaty. Moreover, for a worker in the same position as the plaintiff in the present case, the application of the Regu

tion. The national court also touched on the cient insurance periods. policy pursued by Spanish governments until 1985 of concentrating on the minimum levels of periodical revalorisations for pension pur poses. In the light of those factors, the pos sibility cannot be ruled out· that — even after the complete revalorisation of the pension due 43 — See inter alia Case 733/79 Laterza [1980] ECR 1915, para graph 8, and Case C-146/93 McLachlan [1994] ECR 1-3229, paragraph 29. 44 — See Case 313/86 Lenoir v Caisse d'allocation?familiales des 42 — See above, footnote 22 and relevant section of the text. Alpes-Mańtimes [1988] ECR 5391, paragraph 13.

20. I now turn to the other ground on which essary not to lose sight of the fundamental the national court considers that the provi characteristics of the so-called contributory sion in issue may be contrary to Article 51 of model of financing under the social security the Treaty. As the Tribunal Supremo points system, whereby it is ultimately the contribu out, the Court held in Lafuente Nieto that a tions made by the insured which determine migrant worker who receives a pension must the amount of the benefits paid. As the Spanish be treated as if he had continued to work Government has pointed out in this case, under the same conditions in his Member 'under a time-honoured principle of our social State of origin (see above, point 10); that con security system, the amount (of contributory dition is intended to ensure that the migrant pensions) is closely bound up with consider worker's treatment as regards pension rights ations relating to contributions and propor complies with Article 51. On the other hand, tionality in order that financial benefits should Heading D of Annex VI to the Regulation reflect faithfully the contributions made in contains a provision requiring the calculation the past, with the result that those who have of the theoretical amount to be linked to the paid similar contributions receive a similar

Let us according to which a migrant worker's career suppose that, to meet such a claim, the ben must — for pension purposes, which is what efit in issue is determined on the basis of the we are concerned with here — be deemed to arithmetical average of the maximum and have been spent without interruption in the minimum contribution bases laid down for Member State of origin, the Court wished to the relevant professional category by Spanish use a formula — a legal fiction, as it were — law in the eight years before materialisation which serves to ensure the effectiveness of the social security safety net. It is a formula obvi ously intended to meet the need to update the benefit due to a worker who has made con 45 — On the other hand, it can be seen that the financing of the Spanish social security system through taxation generally, tributions to the social security system long which in 1990 covered approximately 30% of social security expenditure (compared with 4% in 1976), served from 1986 before materialisation of the risk. However, onwards essentially to support the cost of minimum (non- this fiction, it must be said, is to be treated contributory) pensions and of benefits paid by sickness insurance (see Commission of the European Communities, with caution. When interpreting it, it is nec La protection sociale en Europe, Luxembourg, 1994, p . 28).

47 — See Case 41/72 Getreide-Import [1973] ECR 1, paragraph 5, and Case 158/80 Rewe [1981] ECR 1805, paragraphs 19 to 27. It has been observed that such a solution can be justified on the ground that the principle of legality is a matter of public policy and implies that the Court can consider of its own motion any other matters liable to affect the validity of For that reason I believe that the Community the act in issue, albeit solely on the basis of the documents on the court file (sec J. Doulois, Appréciation de validité legislature made correct use, on the points (Renvoi en), in C. Gavalda-R. Kovar (dir.), Répertoire de droit communautaire Dalîoz, Paris, 1992 — (and loose-lcaf edition, April 1992), Volume I, paragraph 52). The Court has also stated that 'If it appears that the real purpose of the questions submitted by a national court is concerned rather 46 — Under the German legislation, the amount of the old-age with the validity of Community measures than with their pension (Altersrente) depends on: (i) the individual basis of interpretation, it is appropriate for the Court to inform the calculation (that is to say, the relation between the annual national court at once of its view without compelling the income of the person concerned and the average incomes of national court to comply with purely formal requirements all the insured m the reference year); (ii) the general basis of which would uselessly prolong the procedure under Article calculation, fixed by law on the basis of the average annual 177 and would be contrary to its very nature. Although this income of all the insured and subject to annual alignment with salary increases; (iii) the number of annual insurance periods completed by the worker (including any substitute S'pc of strict adherence to formal requirements may be cfended in the case of litigation between two parties whose mutual rights must be subject to strict rules, it would be periods (Ersatzzeiten, during which there is no obligation to inappropriate to the special field of judiciai cooperation contribute, for example, during military service or whilst under Article 177 which requires the national court and the rearing children) as well as possible periods of interruption Court of Justice, both keeping within their respective juris­ (Ausfallszeiten) and additional periods (Zurechnungszeiten), diction, and with the aim of ensuring that Community law during which the insured was unfit to work or otherwise is applied in a unified manner, to make direct and comple­ prevented from working), and (iv) a fixed multiplier. Sec D . mentary contributions to the working out of a decision.' Pictcrs in Social Security Law in the Fifteen Member States (Sec Case 16/65 C. Schwarze [1965] ECR, in particular, of the European Union, Antwcrpcn-Apcldoorn, 1997, p. 886; sec also Case 145/79 Roquette Frères [1980] ECR p. 118, and Administrative Commission of the European 2917, paragraph 7)). The Court has thus not baulked at Communities on Social Security for Migrant Workers, Social declaring an instrument invalid of its own motion when it security for migrant workers. Guide No 1. F. R. of Germany, was only required to interpret it (see Case 62/76 Slrehl Luxembourg, 1975, pp. 48 and 49. [1977] ECR 211, paragraphs 10 to 18).

4, of Annex VI to the Regulation. I have also With effect from 1 July 1998, paragraph 4(b) observed that, although that provision came of Section D of Annex VI reads: 'the amount into force after the events in issue in those of the pension obtained shall be increased by two cases — and thus remains, in both cases, the amount of the increases and revalorisa­ irrelevant to the subject-matter of the ques­ tions calculated for each subsequent year [thus tions referred — the Court cited it in support including the year in which the risk materia- of the interpretation it gave in both judg­ lises], for pensions of the same nature' (see ments of the provision laid down in Article Article 1(8)(b) and Article 3(1)). The version 47(1 )(e), (now (g)), of the Regulation (see of the Regulation which must be applied in 48 above, footnote 17). The Court wished to the present case is that predating the amend­ make clear that effective and uninterrupted ment I have cited and is thus, in my view, updating of the theoretical amount had to be partially invalid as I have explained. a criterion, so that it met as effectively as pos­ sible the objective of protecting the person concerned as though he had continued to work in the Member State in question. Only in that way is it possible to ensure the com­ patibility with the principles laid down by Article 51 of the Treaty of the provisions of the Regulation requiring the average contri­ bution basis of the migrant worker to be determined only according to the contribu­ tions actually paid to the social security insti­ 22. To conclude this analysis, and pursuant tution responsible for payment. to the Court's judgment in Naranjo Arjona

III — Conclusion

23 . In the light of the considerations set out above, I propose that the Court should answer to the questions referred by the Tribunal Supremo for a preliminary ruling as follows:

(1) In so far as Heading D , paragraph 4, of Annex VI to Council Regulation ( EEC ) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons , to self-employed persons and to members of their families moving within the Community , as amended by Council Regulation ( EEC ) No 1248/92 of 30 April 1992, provides that, in situations such as that in the main proceedings , the amount of the theoretical Spanish benefit, calculated on the basis of actual contributions paid by the worker in the years immediately pre­ ceding payment of the last contribution under the relevant legislation, is to be the subject of appropriate revalorisation for each subsequent year only until the year before materialisation of the risk, it is incompatible with Article 51 of the

51 — See above, footnote 31 and related section of text. 52 — Sec Naranjo Arjona (cited above, footnote 1), paragraph 29.

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OPINION OF MR LA PERGOLA — CASE C-153/97