C-299/01
ECLI:EU:C:2002:243
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OPINION OF MR RUIZ-JARABO — CASE C-299/01
O P I N I O N O F ADVOCATE GENERAL RUIZ-JARABO C O L O M E R delivered on 18 April 2002 *
1. The Commission has brought an action law made entitlement to a guaranteed against the Grand Duchy of Luxembourg minimum income subject to the condition under Article 226 EC. It seeks a declaration that the applicant had resided in the by the Court of Justice that the Member country for at least 10 years during the State has failed to fulfil its obligations previous 20. under Article 7(2) of R e g u l a t i o n No 1612/68 on freedom of movement for workers within the Community 2 and Article 43 EC.
The Commission contacted the Lux- The Member State is alleged to have embourg authorities, pointing out that that infringed the provision by maintaining, in condition might be incompatible with its national legislation, a requirement of a Community law. It received the reply that prior period of residence on its territory for a draft law intended to remove the con- the granting of a guaranteed minimum dition was being prepared. income.
I — Facts 3. However, by letter dated 19 July 1999, the Commission was informed that the Luxembourg Conseil d'État had issued an unfavourable opinion and therefore the law passed on 29 April 1999 3 had maintained 2. Early in 1998 it was brought to the the residence requirement, although its Commission's attention, by way of an duration was reduced to five years during individual complaint, that the Luxembourg the previous twenty.
1 — Original language: Spanish. 3 — Published in the Mémorial (Official Journal of the Grand 2 — Regulation (EEC) of the Council of 15 October 1968 (OJ, Duchy) on 1 June 1999. That amendment came into force English Special Edition 1968 (II), p. 475). on 1 March 2000, nine months after its publication.
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I I— The Community provisions Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular com- panies or firms within the meaning of the 4. Under Article 7 of Regulation second paragraph of Article 48, under the No 1612/68: conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capi- tal.'
' 1 . A worker who is a national of a Member State may not, in the territory of another Member State, be treated differ- ently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and should he become unemployed, reinstate- ment or re-employment. III — The contested Luxembourg legis- lation
2. He shall enjoy the same social and tax advantages as national workers.
6. The legislation which is regarded as incompatible with Community law is Article 2(1) and (2) of the Law of 26 July ...' 1986 establishing entitlement to a guaran- teed minimum income. Under those provi- sions, the benefit is granted to any person who, with the mandatory authority, has his domicile and actual residence in the Grand Duchy, is over 25 years of age, earns less than the established minimum, is prepared 5. Article 43 EC, for its part, provides: to exhaust the possibilities offered by national or foreign legislation to improve his situation, and has resided in Lux- embourg for at least five years during the previous twenty. Only stateless persons and political refugees are exempt from the residence requirement.
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IV — The administrative procedure 9. On 24 July 2000, the Commission's staff requested specific details of the planned schedule, and at the same time asked the national authorities to grant the benefit immediately to the nationals of other Member States to whom it had been 7. In spite of the fact that the duration of refused because they did not fulfil the the period of residence required to qualify residence requirement. for the benefit had been reduced, the Commission considered that the legislation was still incompatible with the fundamen- tal principle of non-discrimination by rea- son of nationality enshrined in Article 7(2) of Regulation No 1612/68, for employed In its letter of 26 October 2000, the workers, and in Article 43 EC, for self- government provided some details of the employed workers. On 6 August 1999, it future legislative provision, stating that it therefore sent a letter of formal notice to intended to submit it to the vote in the the authorities of the Grand Duchy inviting parliamentary session 2000-01. It added them to submit observations within two that, in the absence of applicable legis- months. lation, it was impossible to accede to the request in respect of the aforementioned nationals.
8. On 26 January 2000, having received no reply and remaining unconvinced by the explanations which accompanied notifi- V — The contentious proceedings cation of the amended legislation, the Commission sent the Luxembourg Govern- ment a reasoned opinion under Article 226(1) EC urging it to amend the Law again. 10. On 26 July 2001, since it had received no news relating to the legislative amend- ment which had been announced, the Commission lodged an application before the Court seeking a declaration that the Member State had failed to fulfil its obli- gations.
On 31 May 2000, the government notified the Commission of its decision to make a new legislative change, in order to comply with the guidelines laid down in the reasoned opinion, and repeated that inten- 11. The applicant alleges that the legis- tion in its letter of 15 June 2000. lation currently in force in Luxembourg I - 5902
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constitutes a manifest infringement of the to pursue activities as self-employed per- principle of equality of treatment, which sons in another Member State the benefit of prohibits not only overt discrimination the same treatment as the host State's own based on nationality but also all covert nationals and also prohibits any discrimi- forms of discrimination which, by applying nation based on nationality which hinders other distinguishing criteria, lead in fact to the taking up or pursuit of such activities. 7 the same result. 4 According to the case-law of the Court, the requirement that a person shall have been resident for a certain period is covert discrimination by reason of nationality, because such a requirement is more easily met by Luxembourg nationals than by nationals of other Member States. 5 The Commission also invokes, in support The fact that the requirement is imposed on of its action, the judgment of the Court in Luxembourg nationals in the same way Commission v Belgium, 8 in which, in does not alter that assessment. respect of a similar piece of legislation and a benefit similar in content, it held that to maintain the requirement of a period of residence on Belgian territory which workers from other Member States had to fulfil in order to qualify for the grant of the allowance of the minimum means of sub- sistence (minimex) was contrary to the principle of equality of treatment. The Commission states that there is no doubt that the benefit in issue constitutes a social advantage, as the Court held in its judgment in Hoeckx, 6 and it must there- fore be granted on the same terms to all workers who are nationals of Member States. 12. In the reply to the claim, submitted on 10 October 2001, Luxembourg states that on 22 March 2000 it passed the law intended to amend the contested national legislation. It invites the Court to dismiss the action or to stay the proceedings until the Commission withdraws its application.
Article 43 EC, for its part, confers on nationals of one Member State who wish
4 —Case 152/73 Sotgiu (1974] ECR 153, paragraph 11, and 13. The Commission waived its right to Case C-175/88 Biehl [1990] ECR I-1779, paragraph 13. submit a rejoinder, and also stated that 5 — Case C-221/89 Factortame and Others [1991] ECR I-3905, paragraph 32; Case C-279/89 Commission v United King- dom [1992] ECR I-5785, paragraph 42; and Case C-111/91 Commission v Luxembourg (1993] ECR I-817, paragraph 10. 7 — Case C-337/97 Meeusen [1999] ECR I-3289, paragraph 27. 6 — Case 249/83 Hoeckx [1985] ECR 973, paragraph 22. 8 — Case C-326/90 Commission v Belgium [1992] ECR I-5517.
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there was no reason to stay the proceed- 16. In its reply to the claim, Luxembourg ings. states that it leaves to one side the matter of whether the five-year residence require- ment is discriminatory, without putting forward any argument in that respect, and declares that it is prepared to amend the legislation which contains it. Even if the defendant State does request the Court to 14. As neither of the parties has submitted dismiss the action because it encloses the a request stating the reasons why it wished draft law — the promulgation of which to present oral observations, the Court has does not appear in the records either — I decided, in accordance with Article 44a of consider that its attitude is tantamount to a the Rules of Procedure, to give a decision submission. on the case without holding a hearing.
17. Furthermore, it is well known that the object of an action under Article 226 EC is VI — Examination of the action established by the Commission's reasoned opinion, and even when the default has been remedied after the time-limit pre- scribed by paragraph 2 of the same article, pursuit of the action still has an object. That object may consist in establishing the basis of the liability that a Member State could incur towards those who acquire A — The request for a declaration of rights as a result of its default. 9 failure to fulfil obligations
15. It is clear from the case-law of the Court cited by the applicant that the requirement that a worker must reside in 18. The suggestion that the proceedings one Member State constitutes covert dis- should be stayed is also irrelevant, since the crimination by reason of nationality against circumstances specified in Article 82a(1)(b) the nationals of the other Member States, of the Rules of Procedure as justifying such and that a benefit such as the one in a decision are not present. In any event, up question must be regarded as a social to April 2002, the Commission has given advantage which must be granted to the nationals of the other Member States on the same terms as to the nationals of the 9 — Case 39/72 Commission v Italy [1973] ECR 101, paragraph 11, and Case 154/85 Commission v Italy [1987] ECR 2717, Member State concerned. paragraph 6.
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no indication that it wishes to withdraw its Luxembourg authorities for information action. about the measures adopted in order to regularise, immediately, the position of Community nationals who had applied to receive the disputed benefit. In support of that request it stated that the principle of non-discrimination by reason of nationality 19. Since it has been established, without a and the precedence of Community law shadow of a doubt, that Luxembourg has were directly applicable throughout the not fulfilled its obligation to adjust its territory of the Union. In the letter sent to national law to the provisions of the Commission by Luxembourg's Perma- Article 7(2) of Regulation No 1612/68 nent Representative on 26 October 2000, it and Article 43 EC, within the time-limit was stated that such action was impossible prescribed in the reasoned opinion, the because there was no legal provision for the Commission's request for a declaration of granting of the benefit to Community failure to fulfil obligations must be granted nationals without the requirement of a and Luxembourg must be ordered to pay prior period of residence in the Grand the costs. Duchy.
21.1 have to say that I sympathise with the B — The request that the Court specify the Commission's position, but I must consequences of the declaration of failure acknowledge that its request cannot be to comply with obligations granted for the reasons I shall now explain.
20. In paragraph 20 of the claim, the Commission seeks, as well as a declaration that the Luxembourg State has failed to comply with its obligations, a statement of 22. Firstly, in accordance with settled case- its consequences, in order that Community law, the letter of formal notice from the law may be fully effective for the nationals Commission to the Member State, and then of other Member States affected in the past the reasoned opinion issued by the Com- by the proscribed legislation. mission delimit the subject-matter of the dispute, so that it cannot thereafter be extended. The opportunity for the State concerned to submit its observations, even if it chooses not to avail itself thereof, constitutes an essential guarantee intended In a letter dated 24 July 2000, sent by the by the Treaty, adherence to which is an Director-General for Employment and essential formal requirement of the Social Affairs, the Commission asked the infringement procedure. Consequently, the
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reasoned opinion and the proceedings and Social Affairs, when the Luxembourg brought by the Commission must be based authorities had already replied to the on the same complaints as those set out in opinion and the subject-matter of the future the letter of formal notice initiating the dispute had been delimited. pre-litigation procedure. 10
23. Secondly, the consequences of a dec- laration of failure to fulfil obligations is contained in Article 228 EC: the Member Although the Commission is not obliged to State is required to take the necessary indicate in the reasoned opinion the meas- measures to implement the judgment of ures or steps to be taken to eliminate the the Court. infringement, it is obliged to indicate, at least, the complaints which it intends to make the subject of its application to the Court. The Commission must specifically indicate to the Member State concerned Those measures are not restricted to elim- that it must adopt a certain measure if it inating the effects of the national legislation intends to make the failure to adopt that for the future, but, as the judgment has measure the subject-matter of its infringe- effect ex tunc, also extend to removing the ment action. 11 harmful consequences caused from the moment the incompatibility with the Com- munity legislation arose. 12 It is well known that Member States are required to make good loss and damage caused to individuals as a result of breaches of Community law. The basis for that obligation is found in, In the case I am considering, however, the amongst other provisions, Article 10 EC, Commission did not urge the Luxembourg under which Member States are required to Government — either in the letter of for- take all appropriate measures, whether mal notice or in the reasoned opinion sent general or particular, to ensure fulfilment in January 2000 — to regularise immedi- of their obligations under Community law. ately the position of nationals of other Among these is the obligation to nullify the Member States to whom it had refused to unlawful consequence of a breach of Com- grant the minimum guaranteed income munity law. allowance because they did not fulfil the residence requirement. According to the documents in the case, that request was not made until the following July, in a letter from the Director-General for Employment According to the case-law, an interpre- tation given by the Court to a provision of 10 —Case C-191/95 Commission v Germany [1998] ECR I-5449, paragraph 55; Case C-328/96 Commission v Austria (1999) ECR I-7479, paragraph 34; and Case 12 — Case 6/60 Humblet v Belgian State [1960] ECR 559 et seq. C-365/97 Commission v Italy [1999] ECR 1-7773, para- especially 571, as regards the ECSC Treaty, and Joined graph 23. Cases C-6/90 and C-9/90 Francovich and Others [1991] 11 — Commission v Austria, cited above, paragraph 39. ECR I-5357, paragraph 36, as regards the EC Treaty.
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Community law clarifies and defines its I consider that, at this stage, a Member meaning and scope only as it should have State cannot be permitted to use the been understood and applied from the time absence of national legislation as a reason of its entry into force. 13 for refusing equal treatment to the nationals of other Member States residing in its territory, particularly when the case- law of the Court has held benefits of a very similar nature to be a tax advantage within the meaning of Article 7(2) of Regulation No 1612/68 15 and judgment has been given against several States for imposing a requirement of prior residence in its terri- tory in order to qualify for them. 16 Other- To that it must be added that the Member wise, it would be very easy for them to State has not requested the Court, as it evade their obligations under Community could have done, to impose temporal limits law merely by not legislating or by delaying on the effects of the judgment. for as long as possible making an adjust- ment to their national laws.
24. Finally, if, as I suggest, it is declared in these proceedings that the Member State has failed to fulfil its obligations, and if the Member State persists in its stubborn refusal to regularise the position of those who were adversely affected before the amended legislation came into force, the Commission has the opportunity of bring- ing a fresh action before the Court. Since early in 1998, when it received the individ- ual complaint, until the new law becomes 25. For the reasons I have given, I consider applicable, 14 several years will have passed that the Commission's request that the during which that Member State has appar- Court specify the consequences of the ently continued to infringe Community declaration of failure to comply with law. obligations cannot be granted.
13 — Joined Cases C-367/93 and C-377/93 Roders and Others 15 — Case 157/84 Frascogna [1985] ECR 1739; Case 122/84 [19951 ECR I-2229, paragraph 42, and Case C-35/97 Scrivner [1985] ECR 1027; Moeckx, cited above; Case Commission v France [1998] ECR I-5325, paragraph 46. 256/86 Frascogna [1987) ECR 3431; and Case C-310/91 14 — It must be borne in mind that the 1999 amendment, which Schmid [1993] ECR I-3011. reduced from ten to five years the period of residence 16 —Commissionv Belgium, cited above; Case C-111/91 needed to qualify for the benefit, did not come into force Commission v Luxembourg [1993] ECR I-817; and Case until nine months after it was published. C-278/94 Commission v Belgium [1996] ECR I-4307.
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V I I— Conclusion
26. In the light of the foregoing considerations, I propose that the Court should:
(1) declare that, by maintaining in its national law a requirement of a prior period of residence on its territory for the grant of the guaranteed minimum income allowance, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 7(2) of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community and Article 43 EC;
(2) order the Member State to pay the costs of the proceedings.
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