1.

The Bundessozialgericht, the plaintiff Testa and the Italian Government first express doubts as to whether Article 69, interpreted as described, is compatible with Article 51 of the EEC Treaty and capable of being valid. In their view, it is incompatible with the meaning and purpose of Article 51 of the EEC Treaty which is to promote freedom of movement for workers, for the contingent entitlement acquired by reason of contributions to be extinguished irrespective of national rules, because a worker has exercised his rights to freedom of movement for a period of longer than three months. This consideration is said to emerge from the settled case-law of the Court of Justice, especially in Cases 24/75 (Petroni) and 112/76 (Manzoni), in which it was made clear that a migrant worker who exercises his right to freedom of movement should not lose the social security advantages which he has under the rules of a single Member State. Moreover, if the rules were to stipulate that national entitlements or contingent entitlements should be extinguished, a migrant worker would in fact be treated less favourably when going to another Member State in order to look for work than if he went to a non-member State, since in the latter case his national entitlement would revive on his return. In the opinion of the Italian Government the requirement that a worker must “return” within a short time and for good not only deliberately conflicts with the general structure of Regulation No 1408/71 and with the principle that the place of residence plays no part; the requirement to return, taken in this sense, also recreates the very discrimination between national and migrant workers which the EEC Treaty was intended to abolish. On the other hand, the Federal Government and the Commission in particular take the view that the rules in question, which enable unemployment benefits to be “exported” into another Member State, are to be understood not simply as the fulfilment of the binding duty to legislate imposed on the Commission and the Council by the Treaty in Article 51 (b), but as a further step left to the discretion of the Community institutions under Article 51 towards creating freedom of movement for workers in the field of social security. The new rules contain an important extension together with a restriction, which are mutually dependent and can only be seen as a whole. If one judges them as a consistent whole one must acknowledge that none of the advantages granted by the rules of the Member States have been curtailed. When considering this argument one should not overlook the fact that Regulation No 1408/71 was adopted in implementation of Articles 48 to 51 of the EEC Treaty and is therefore also to be judged in the light of those provisions. As I have already stated, Article 69 of the regulation constitutes a special rule which, as such, does not curtail but neither increases freedom of movement by enabling unemployment benefits, which by their nature are not usually amenable to exportation, to be “carried away” into another Member State for certain periods of time, in the interests of freedom of movement. The Court of Justice made this point succinctly in Case 139/78 (Coccioli) when it stated: “Article 69 ... confers on a person who avails himself of that provision an advantage as compared with a person who remains in the competent State in as much as, by the effect of Article 69, he is freed for a period of three months of the duty ... to keep himself available to the employment services of the competent State and to be subject to the control procedure organized therein.” However, if the Council confers entitlements on migrant workers in its directives which they would, not otherwise have, then it must also be empowered, within its legislative discretion, to determine the extent and duration of those advantages in the light of the specific features of national social security schemes and the way in which they work. As a result the Court of Justice concluded in its judgment in the Cuccioli case that the three month period, which restricts only the right to benefits anchored in Community law, is lawful. On the other hand, in the Petroni and Manzoni cases, the Court of Justice held that certain applications of the provisions in Article 46 (3) of Regulation No 1408/71 against the overlapping of benefits conflict with Article 51 of the EEC Treaty because they deprive a worker who has exercised his right to freedom of movement of social security advantages which he is already guaranteed solely by virtue of the legislation of a single Member State and because this would fail to achieve the objective of Articles 48 to 51 of the EEC Treaty. Unlike the measures held invalid in those cases, the rule in Article 69 (2) does not, however, affect rights acquired by an individual under national law, provided that the person looking for work returns in good time to the country of employment. An unemployed person who avails himself of the rule, returning to the country of employment in good time, is therefore not worse off but better off than the person who goes to a non-member State, since his entitlement to benefits is maintained during the three month absence. In this respect he is also basically at an advantage in comparison with workers from non-member States who cannot avail themselves of that rule. In conclusion, let it be said to the objection of the Italian Government that the rule also applies to German unemployed persons who go to another Member State to look for work and in that respect it is not an infringement of the prohibition on discrimination contained in Article 48 et seq. of the EEC Treaty. Of course it cannot be denied that, in the event of late return, the second half of the first sentence of Article 69 (2) as interpreted here extinguishes rights which, were it not for the rule of Community law, the unemployed person would not have lost after returning from a stay abroad. However, in my view such interference with these rights acquired by the individual under national law is justified by the following considerations: First, as I have already explained, one must not forget that even paragraph (2) of Article 69 serves to improve freedom of movement for workers because without it the rule in paragraph (1) would not be possible. Next, and this seems an essential aspect to me, wholly unemployed workers from the Member States are not forced to have recourse to Article 69 of Regulation No 1408/71 when seeking employment in another Member State. Instead they can go to another Community country without availing themselves of that provision and forfeit their entitlement to unemployment benefit during their absence but, where national law so provides, they can continue to draw it upon their return. However, if they opt for the more advantageous rule in Article 69 which, upon the conditions contained therein, provides for entitlement to benefit to be maintained for a maximum period of three months, they thereby also accept as it were the “encumbrance” attaching to that rule, namely the loss of all entitlement to benefits in the event of late return. In notice E 303/5 the attention of unemployed persons is drawn to the close relationship between the opportunity created by Community law to continue to be entitled to benefits whilst being unavailable to the competent institution and the concommitant risk of losing that continued entitlement in the event of late return; the notice specifically states that if the unemployed person's search for work outside the country of last employment continues for more than three months any remaining rights to employment benefits in that country of last employment are extinguished at the end of that period. Finally, I have already pointed out in my Opinion in the Coccioli case that by providing for the possibility of an extension of the period the hardship clause in the second sentence of Article 69 (2) offers a remedy for the solution of cases where the complete loss of further entitlement after the expiry of the period would be a breach of the principle of proportionality. The Court of Justice has therefore decided that Article 69 (2) of Regulation No 1408/71 does not restrict the power of the competent services and institutions of the Member States to take into consideration, with a view to deciding upon any extension of the period laid down by the regulation, all factors which they regard as relevant and which relate either to the individual situation of the workers concerned or to the exercise of effective control. However, these cases present the opportunity of further defining the limit to the discretion which emerges from the meaning and purpose of that provision. It should be clearly emphasized, particularly in regard to the main proceedings in the Vitale case, that in each individual case the competent services or institutions in the Member States must decide, when exercising their discretion as they are bound to do, whether the facts set out in an application for an extension of the period laid down in Article 69 (2) of Regulation No 1408/71 constitute an “exceptional case” which justifies an exception being made to the rule. In the exercise of that discretion, which is conditioned by the meaning and purpose of the provision in question, particular consideration must be given to the length of time by which the three month period has been exceeded, the reason for the late return, and also, and this seems to me to be of particular importance, the seriousness of the legal consequences in the event of late return.