OPINION OF ADVOCATE GENERAL

WATHELET

delivered on 4 September 2014 ( 1 )

Joined Cases C‑401/13 and C‑432/13

Vasiliki Balazs

v

Casa Judeţeană de Pensii Cluj (C‑401/13)

and

Casa Judeţeană de Pensii Cluj

v

Attila Balazs (C‑432/13)

(Requests for a preliminary ruling from the Curtea de Apel Cluj (Romania))

‛Social security for migrant workers — Old-age benefits — Applicability of social security conventions between Member States — Refusal by the authorities of a Member State to grant, on the basis of EU legislation, an old-age benefit for periods of employment completed in its territory to a repatriated person whose country of origin is another Member State’

1. These requests for a preliminary ruling from the Curtea de Apel Cluj (Court of Appeal, Cluj (Romania)) concern the interpretation of Article 7(2)(c) of Regulation (EEC) No 1408/71 of the Council 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, in the version amended and updated by Council Regulation (EC) No 118/97 of 2 December 1996 (OJ 1997 L 28, p. 1), as amended by Regulation (EC) No 1992/2006 of the European Parliament and of the Council of 18 December 2006 ( 2 ) (‘Regulation No 1408/71’).

2. The requests have been made in proceedings between Vasiliki Balazs and the Casa Judeţeană de Pensii Cluj (Area Pensions Office, Cluj; ‘the Casa Judeţeană de Pensii’) and between the latter and Attila Balazs, concerning the grant of old-age pensions to Mr and Mrs Balazs.

I – Legal framework

A – EU law

3. According to the sixth recital in the preamble to Regulation No 1408/71: ‘… the provisions for coordination must guarantee that workers moving within the Community and their dependants and their survivors retain the rights and the advantages acquired and in the course of being acquired’.

4. Article 6 of that regulation provides: ‘Subject to the provisions of Articles 7, 8 and 46(4), this Regulation shall, as regards persons and matters which it covers, replace the provisions of any social security convention binding …: (a) two or more Member States exclusively, … …’

5. In derogation from Article 6, Article 7(2)(c) of Regulation No 1408/71 provides: ‘The provisions of Article 6 notwithstanding, the following shall continue to apply: … (c) certain provisions of social security conventions entered into by the Member States before the date of application of this Regulation provided that they are more favourable to the beneficiaries or if they arise from specific historical circumstances and their effect is limited in time if these provisions are listed in Annex III.’

6. Article 45 of Regulation No 1408/71 governs the consideration of periods of insurance or of residence in relation to pensions (old age and death). In accordance with Article 45(1), ‘[w]here the legislation of a Member State makes the acquisition, retention or recovery of the right to benefits, under a scheme which is not a special scheme within the meaning of paragraph 2 or 3, subject to the completion of periods of insurance or of residence, the competent institution of that Member State shall take account, where necessary, of the periods of insurance or of residence completed under the legislation of any other Member State, be it under a general scheme or under a special scheme and either as an employed person or a self-employed person. For that purpose, it shall take account of these periods as if they had completed under its own legislation’.

7. Article 46 of Regulation No 1408/71 sets out how benefits must be awarded: ‘1. Where the conditions required by the legislation of a Member State for entitlement to benefits have been satisfied without having to apply Article 45 or Article 40(3), the following rules shall apply: (a) the competent institution shall calculate the amount of the benefit that would be due: (i) on the one hand, only under the provisions of the legislation which it administers; (ii) on the other hand, pursuant to paragraph 2; (b) the competent institution may, however, waive the calculation to be carried out in accordance with (a)(ii) if the result of this calculation, apart from differences arising from the use of round figures, is equal to or lower than the result of the calculation carried out in accordance with (a)(i), in so far as that institution does not apply any legislation containing rules against overlapping as referred to in Articles 46b and 46c or if the aforementioned institution applies a legislation containing rules against overlapping in the case referred to in Article 46c, provided that the said legislation lays down that benefits of a different kind shall be taken into consideration only on the basis of the relation of the periods of insurance or of residence completed under that legislation alone to the periods of insurance or of residence required by that legislation in order to qualify for full benefit entitlement. Annex IV, part C, lists for each Member State concerned the cases where the two calculations would lead to a result of this kind. 2. Where the conditions required by the legislation of a Member State for entitlement to benefits are satisfied only after application of Article 45 and or Article 40(3), the following rules shall apply: (a) the competent institution shall calculate the theoretical amount of the benefit to which the person concerned could lay claim provided all periods of insurance and/or of residence, which have been completed under the legislation of the Member States to which the employed person or self-employed person was subject, have been completed in the State in question under the legislation which it administers on the date of the award of the benefit. If, under this legislation, the amount of the benefit is independent of the duration of the periods completed, the amount shall be regarded as being the theoretical amount referred to in this paragraph; (b) the competent institution shall subsequently determine the actual amount of the benefit on the basis of the theoretical amount referred to in the preceding paragraph in accordance with the ratio of the duration of the periods of insurance or of residence completed before the materialisation of the risk under the legislation which it administers to the total duration of the periods of insurance and of residence completed before the materialisation of the risk under the legislations of all the Member States concerned. 3. The person concerned shall be entitled to the highest amount calculated in accordance with paragraphs 1 and 2 from the competent institution of each Member State without prejudice to any application of the provisions concerning reduction, suspension or withdrawal provided for by the legislation under which this benefit is due. Where that is the case, the comparison to be carried out shall relate to the amounts determined after the application of the said provisions. …’

8. Finally, Article 94(1) and (2) of Regulation No 1408/71 provides: ‘1. No right shall be acquired under this Regulation in respect of a period prior to 1 October 1972 or to the date of its application in the territory of the Member State concerned or in a part of the territory of that State. 2. All periods of insurance and, where appropriate, all periods of employment or residence completed under the legislation of a Member State before 1 October 1972 or before the date of its application in the territory of that Member State or in a part of the territory of that State shall be taken into consideration for the determination of rights acquired under the provisions of this Regulation.’

9. Regulation (EEC) No 574/72 of the Council of 21 March 1972, ( 3 ) as amended, in particular, by Council Regulation (EC) No 1791/2006 of 20 November 2006 ( 4 ) (‘Regulation No 574/72’), lays down the procedure for implementing Regulation No 1408/71.

B – The bilateral agreement

10. The bilateral agreement between the Greek and Romanian Governments concerning final settlement of the compensation in respect of the social security contributions made by Greek political refugees repatriated from Romania, concluded on 23 February 1996 (‘the bilateral agreement’), is not included in Annex III to Regulation No 1408/71.

11. The terms ‘repatriated person’ and ‘period of insurance’ are defined, for the purpose of the bilateral agreement, in Article 1(a) and (e): ‘(a) “repatriated person” shall mean a person of Greek origin, established in Romania after 1 January 1945, having the status of political refugee, and also the members of his family, who have returned or, within six years of the date of entry into force of the present agreement, will return to Greece in order to reside there permanently; … (e) “period of insurance” shall mean the period for which social security contributions were paid in Romania, in accordance with Romanian law.’

12. Article 2 of the bilateral agreement states: ‘1. The contracting parties shall arrange for the compensation in respect of social security contributions made by repatriated persons in accordance with the provisions of paragraphs 2 and 3 of this article and Article 3 of this agreement. 2. The Romanian party undertakes to pay to the Greek party a lump sum by way of compensation for the payment of pensions by the Greek party and the covering by it of the period of insurance completed by repatriated persons. 3. The Greek party undertakes to pay pensions to retired repatriated persons and to recognise the period of insurance completed in Romania by insured repatriated persons, in accordance with Greek social security law.’

13. Under Article 3 of the bilateral agreement, the compensation referred to in Article 2(2) thereof amounts to USD (United States dollars) 15 million.

14. Pursuant to Article 5 of that agreement, ‘[o]nce the sum of USD 15 million has been paid, Romania shall no longer have any obligation regarding the social security rights of repatriated Greek political refugees’.

II – Facts of the dispute in the main proceedings

15. Mr and Mrs Balazs are Greek nationals residing in Thessaloniki (Greece). They have the status of ‘repatriated Greek political refugees’.

16. In 1948, Mr and Mrs Balazs, then aged 7 and 9 respectively, were recognised as political refugees in Romania. They were insured under the Romanian public social security system and made contributions to that system for periods of 34 years, 7 months and 6 days (Mr Balazs) and 28 years (Mrs Balazs). They were repatriated to Greece on 18 August 1990.

17. In 1998, following applications submitted by Mr and Mrs Balazs for recognition of the periods of work they had completed in Romania, the Greek authorities found that those periods corresponded, respectively, to 9 382 and 8 351 days. In respect of those periods, the authorities recognised 4500 days, in accordance with the applicable Greek social security legislation.

18. The Greek authorities thereafter granted old-age pensions to Mr and Mrs Balazs.

19. A total period of insurance of 6993 days of work, comprising the 4500 days recognised in respect of her period of work in Romania and 2 493 days in respect of employment in Greece, was thus taken into consideration for Mrs Balazs. On that basis, Mrs Balazs was granted a monthly pension of GRD (Greek drachmas) 136910 (approximately EUR 390) with effect from 1 April 1999.

20. As regards Mr Balazs, the total period of insurance taken into consideration was 7733 days, comprising the 4500 days recognised in respect of his period of work in Romania and 3 233 days in respect of employment in Greece. On that basis, after initially receiving an invalidity pension, Mr Balazs was, from 2009, awarded a monthly retirement pension of EUR 596.99 by the Greek authorities.

21. On 11 October and 27 November 2007, Mrs Balazs and Mr Balazs respectively applied to the Casa Judeţeană de Pensii for an old-age pension on the basis of Regulation No 1408/71 and Regulation No 574/72.

22. Those applications were rejected by decisions of 5 October 2011 on the ground that, since the Greek authorities considered Mr and Mrs Balazs to be repatriated Greek political refugees, the Romanian authorities, by virtue of Article 5 of the bilateral agreement, were under no obligation to grant them old-age pensions.

23. By civil judgments of 26 September 2012, the Tribunalul Cluj (Regional Court, Cluj) annulled those decisions and ordered the Casa Judeţeană de Pensii to adopt fresh decisions granting Mr and Mrs Balazs old-age pensions in accordance with Regulation No 1408/71 and Regulation No 574/72, taking into account the entire contribution periods completed by them in Romania. The court stated that those regulations applied to the applications submitted by Mr and Mrs Balazs since the bilateral agreement did not fall within the scope of Article 7(2)(c) of Regulation No 1408/71, in that the application of that agreement was not limited in time, the agreement was not mentioned in Annex III to the regulation and, clearly, its provisions could not be regarded as more favourable to the beneficiaries.

24. In implementation of those judgments, on 20 and 27 February 2013 the Casa Judeţeană de Pensii adopted two fresh decisions by which, pursuant to Regulation No 1408/71, it granted Mr and Mrs Balazs monthly old-age pensions of RON (Romanian lei) 405 and RON 500 respectively. In those decisions, it stated that in accordance with the provisions of Regulation No 574/72, 4500 days had been subtracted from the total periods of 7733 and 6 993 days calculated by the Greek authorities, since they overlapped with the periods of compulsory insurance completed by Mr and Mrs Balazs in Romania, between 1 June 1975 to 31 May 1990.

25. In both cases, appeals against the civil judgments of the Tribunalul Cluj were brought before the Curtea de Apel Cluj, both by Mr and Mrs Balazs and by the Casa Judeţeană de Pensii. The Casa Judeţeană de Pensii essentially contended that Regulation No 1408/71 and Regulation No 574/72 do not apply in the present instance because of the existence of the bilateral agreement. In accordance with that agreement, any obligations owed by Romania in relation to repatriated Greek political refugees came to an end since Romania performed its obligation to pay USD 15 million to Greece. On the other hand, Mr and Mrs Balazs sought, on the basis of the same regulations, recognition of their entitlement to an old-age pension in respect of the entire period during which they made contributions in Romania. They submitted, in essence, that, on account of Romania’s accession to the European Union, that Member State is required to apply Regulation No 1408/71 and Regulation No 574/72. The bilateral agreement, which is less favourable and is not included in Annex III to Regulation No 1408/71, does not fall within the scope of Article 7(2)(c) of that regulation.

26. It was in those circumstances that the Curtea de Apel Cluj decided to stay both of the main actions and to refer a question to the Court of Justice for a preliminary ruling.

III – The requests for a preliminary ruling and the procedure before the Court

27. By decisions of 27 June and 2 July 2013, received at the Court on 31 and 16 July 2013 respectively, the Curtea de Apel Cluj stayed the proceedings and referred the following question to the Court of Justice for a preliminary ruling under Article 267 TFEU: ‘Is Article 7(2)(c) of Regulation (EEC) No 1408/71 to be interpreted as including within its scope a bilateral agreement which two Member States entered into before the date on which that regulation became applicable and by which the two States agreed to the termination of obligations relating to social security benefits owed by one State to nationals of the other State who had been political refugees in the territory of the first State and who have been repatriated to the territory of the second State, in exchange for a payment by the first State of a lump sum for the payment of pensions and to cover periods during which social security contributions were paid in the first Member State?’

28. By decision of 4 September 2013, the President of the Court ordered that the cases be joined.

29. Written observations were submitted by Mr and Mrs Balazs, the Greek and Romanian Governments and the European Commission.

30. At the hearing held on 4 June 2014, Mr and Mrs Balazs, the Greek and Romanian Governments and the Commission made oral submissions.

IV – Analysis

A – Subject-matter of the question referred

31. The referring court’s question concerns a problem regarding the relationship between a bilateral social security agreement entered into when one of the two signatory States was not yet a member of the European Union and Regulation No 1408/71.

32. The issue of the applicability ratione temporis of Regulation No 1408/71 is resolved by settled case-law, according to which the regulation enters into force in a new Member State upon its accession to the European Union. ( 5 ) Furthermore, although Regulation No 1408/71 is, in principle, valid only for the future, it may nevertheless apply to the future effects of situations which came about during the period of validity of the old legislation. ( 6 )

33. In my view, the fact that Article 5 of the bilateral agreement states that, once Romania has paid the sum of USD 15 million, it ‘shall no longer have any obligation regarding the social security rights of repatriated Greek political refugees’ is not liable to alter the Court’s approach, under which Regulation No 1408/71 entered into force in Romania upon its accession to the European Union and therefore applies to the future effects of past situations.

34. Indeed, if one merely reads Articles 6 and 7 of that regulation, the principle of replacement is indisputable. In order to derogate from that principle, Article 7(2)(c) imposes two cumulative conditions. ( 7 ) First, the international convention must be more favourable to the beneficiaries or it must arise from specific historical circumstances, in which case its effect must be limited in time. Second, it must be included in Annex III to Regulation No 1408/71. In the present instance, since the bilateral agreement is not included in Annex III to the regulation, ( 8 ) the exception should not apply.

35. However, under the judgment in Rönfeldt (C‑227/89, EU:C:1991:52) the principle of replacement must be set aside in favour of the application of the international convention if that convention affords potential beneficiaries more favourable treatment, regardless of whether it is included in Annex III to Regulation No 1408/71. It is therefore necessary to examine the applicability of the rule in Rönfeldt to the present case.

B – Replacement by Regulation No 1408/71 in the light of the rule in Rönfeldt and the development thereof

36. The question of the relationship between Regulation No 1408/71 and an earlier international convention is expressly governed by Articles 6 and 7 of that regulation.

37. The rule is replacement by Regulation No 1408/71. According to Article 6, the regulation shall, ‘[s]ubject to the provisions of Articles 7, 8 and 46(4) … replace the provisions of any social security convention binding … two or more Member States’.

38. By way of derogation, Article 7(2)(c) provides that ‘certain provisions of social security conventions entered into by the Member States before the date of application of this Regulation [shall continue to apply] provided that they are more favourable to the beneficiaries or if they arise from specific historical circumstances and their effect is limited in time if these provisions are listed in Annex III’.

39. Until the judgment in Rönfeldt (EU:C:1991:52), the principle and the exception were strictly applied: the regulation replaces social security conventions entered into by Member States which are not mentioned in Annex III ‘even if the application of the conventions is more advantageous to persons entitled to benefits than the said regulation’. ( 9 )

40. According to the Court, the strictness of that approach was due to the mandatory nature of the principle of replacement by Regulation No 1408/71, which ‘does not allow of exceptions save for the cases expressly stipulated by the regulation’. ( 10 )

41. In the judgment in Rönfeldt (EU:C:1991:52), the Court recalled the mandatory nature of the principle of replacement and the fact that it did not allow of exceptions not set out in the regulation itself, ( 11 ) but none the less held that Articles 45 TFEU and 48 TFEU ‘preclud[e] the loss of social security advantages … which would result from the inapplicability, following the entry into force of Council Regulation (EEC) No 1408/71, of conventions operating between two or more Member States and incorporated in their national law’. ( 12 )

42. However, in the judgment in Thévenon, ( 13 ) the Court — addressing the ‘particular circumstances which prompted [it] in Rönfeldt to allow the exception to the rule laid down by Article 6 of Regulation No 1408/71’ ( 14 ) — stated that the rule in Rönfeldt cannot apply to workers who have not exercised their right to freedom of movement until after the entry into force of the regulation.

43. In conclusion, as the Court explained in paragraph 27 of the judgment in Kaske (C‑277/99, EU:C:2002:74), ‘[t]he sole purpose of the principles laid down in Rönfeldt is to perpetuate entitlement to an established social right not enshrined in Community law at the time when the national of a Member State relying on it enjoyed that right. Accordingly, the fact that Regulation No 1408/71 became applicable in a national’s Member State of origin on the date when that Member State acceded to the European Community does not affect his established right to benefit from a bilateral rule which was the only one applicable to him when he exercised his right to freedom of movement. [T]hat approach is derived from the notion that the person concerned was entitled to entertain a legitimate expectation that he would benefit from the provisions of the bilateral convention’ (emphasis added).

C – Inapplicability of the rule in Rönfeldt to the present case

44. Whilst under the rule in Rönfeldt the principle of replacement by Regulation No 1408/71 must be set aside in favour of the application of an international agreement which affords potential beneficiaries more favourable treatment, it is also necessary for that rule to apply in a case like that of Mr and Mrs Balazs.

45. I do not think that it does.

1. The decisive factor is the date on which the right to freedom of movement is exercised

46. My view is that the extension under the rule in Rönfeldt of the circumstances in which the principle of replacement by Regulation No 1408/71 is excluded must be interpreted restrictively.

47. I consider such a construction to be consistent with the judgment in Rönfeldt (EU:C:1991:52) itself and with the judgments that followed it. In those judgments, the Court draws attention to the mandatory nature of the principle that the regulation replaces the provisions of social security conventions between Member States. ( 15 )

48. Applying the same restrictive approach, the Court has refused such an extension of the derogation for workers who did not exercise their right to freedom of movement until after the entry into force of Regulation No 1408/71. ( 16 )

49. A restrictive interpretation can also address some of the criticisms expressed by learned writers, who took the view that the judgment in Rönfeldt (EU:C:1991:52) undermined consistency in the coordination of social security schemes and infringed the principle of the primacy of EU law over national law, albeit convention-based law. ( 17 )

50. There is a fundamental factual difference between the situation of Mr and Mrs Balazs and the cases in which the rule in Rönfeldt has been applied. In those cases, the beneficiaries of the international convention exercised their freedom of movement not only before Regulation No 1408/71 entered into force (a condition stipulated in the judgment in Thévenon), ( 18 ) but also after the convention was signed. ( 19 )

51. On the other hand, in the case of Mr and Mrs Balazs the bilateral agreement was signed on 23 February 1996, that is to say, after they had exercised their right to freedom of movement. Mr and Mrs Balazs, who are Greek nationals, settled in Romania in 1948 and were repatriated to Greece on 18 August 1990, namely more than six years before the bilateral agreement was signed.

52. Accordingly, it cannot be denied that Mr and Mrs Balazs did not have — to paraphrase paragraph 27 of the judgment in Kaske (EU:C:2002:74), cited in point 43 of this Opinion — any established right to benefit from the bilateral agreement, as the latter was not applicable to them when they exercised their right to freedom of movement. In other words, Mr and Mrs Balazs could have no legitimate expectation that they would be able to benefit from the provisions of a bilateral convention, as it was not in existence when they exercised their right to freedom of movement.

53. In those circumstances, I consider that the extension of the derogation from the principle of replacement by Regulation No 1408/71, deriving from the judgment in Rönfeldt (EU:C:1991:52), cannot be applied to a situation such as that in the main proceedings.

54. I therefore propose that the Court should state in answer to the question submitted by the referring court that application of Regulation No 1408/71, as provided for in Article 6 of that regulation, may not be derogated from when workers falling within the scope of an international social security convention have exercised their right to freedom of movement before the convention’s entry into force.

2. The consequences of applying Regulation No 1408/71

55. In the context of the main proceedings, the replacement of the bilateral agreement by Regulation No 1408/71 means, in practical terms, that as from 1 January 2007 (the date of Romania’s accession to the European Union) the Greek and Romanian authorities had to apply to Mr and Mrs Balazs the rules on the consideration of periods of insurance and on the award of benefits laid down in Regulation No 1408/71.

56. In other words, the pensions payable by Greece and Romania to Mr and Mrs Balazs as from 1 January 2007 must be determined in accordance with Articles 45, 46 and 94(2) of Regulation No 1408/71.

57. Both Romania and Greece must therefore take into account, for the purpose of determining benefit entitlements, all periods of insurance, employment or residence completed under the legislation of any Member State before the date of the regulation’s application in Romania.

58. Indeed, according to the Court’s settled case-law, it follows from Article 94(2) of Regulation No 1408/71 that a Member State ‘is not entitled to refuse to take into account periods of insurance completed in the territory of another Member State, for the purposes of establishment of a retirement pension, for the sole reason that they were completed before the entry into force of the regulation in its regard’. ( 20 )

59. Consequently, Article 94(2) of Regulation No 1408/71 must be interpreted in conjunction with Article 2(1) thereof as ‘guaranteeing that all insurance periods and all periods of employment or residence completed under the legislation of a Member State before the entry into force of that regulation shall be taken into consideration for the purpose of determining entitlement to benefits in accordance with its provisions, subject to the condition that the migrant worker was a national of one of the Member States when the periods were completed’ ( 21 ) (which is the case with Mr and Mrs Balazs).

60. In accordance with Article 46(2) of Regulation No 1408/71, the actual amount of the benefit payable by each of the Member States in question will be in proportion to the duration of the periods of insurance or residence completed by Mr and Mrs Balazs in each Member State, before the materialisation of the risk, under that country’s national legislation.

61. As confirmed by Article 15(1) of Regulation No 574/72, since ‘benefits in respect of … old age … are to be awarded by the institutions of two or more Member States in accordance with the provisions of Article 46(2) of the Regulation, each of the institutions concerned shall effect a separate aggregation, by taking into account the whole of the periods of insurance or residence completed by the employed or self-employed person under the legislations of all the Member States to which he has been subject …’.

62. Finally, under Article 46(3) of Regulation No 1408/71, Mr and Mrs Balazs ’shall be entitled to the highest amount[,] from the competent institution of each Member State’, out of the actual amount referred to above and the amount calculated on the basis of national legislation alone pursuant to Article 46(1) of Regulation No 1408/71.

3. Additional observations on the consequences of applying Regulation No 1408/71

63. I would like to complete my analysis with two additional observations on the specific consequences, for Greece and Romania on the one hand, and for Mr and Mrs Balazs on the other, of applying Regulation No 1408/71.

64. First, I am aware of the fact that non-application of the bilateral agreement in question in the main proceedings is liable to affect the scope of the rights and obligations accepted by the Member States party to that agreement, since, for the period after 1 January 2007, the old-age benefit paid by Greece to Mr and Mrs Balazs will be in proportion to the periods of insurance completed in Greece alone.

65. However, the consequences of any calling into question of the bilateral agreement by one or other of the Member States party to it does not fall within the Court’s jurisdiction.

66. Second, I would like to return to the Commission’s argument that the decisions taken on 20 and 27 February 2013 by the Casa Judeţeană de Pensii, in implementation of the judgments of 26 September 2012 delivered by the Tribunalul Cluj, comply with EU law in applying Regulation No 1408/71.

67. The Court expressly asked the Commission whether, with that analysis, it was actually putting forward a third approach, consisting in the joint application of Regulation No 1408/71 (by the Romanian authorities, in the decisions of 20 and 27 February 2013) and the bilateral agreement (by the Greek authorities). At the hearing held on 4 June 2014, the Commission replied that its analysis merely permitted reconciliation of the principles expressed in the judgments in Walder (EU:C:1973:62) and Rönfeldt (EU:C:1991:52), namely the replacement of the bilateral agreement by Regulation No 1408/71 and the maintenance of the most favourable aspects of that agreement.

68. However, I think that that approach, irrespective of its practicability for Mr and Mrs Balazs, is not legally consistent with Regulation No 1408/71.

69. On the contrary, as the Romanian Government’s representative pointed out at the hearing, Article 7 of Regulation No 1408/71 does not permit the joint application of that regulation and an international convention. Nevertheless, regardless of what the Commission states, that is the outcome of the approach it recommends.

D – In the alternative, the Court’s jurisdiction to determine the most favourable provision

70. If the Court were not to follow my approach and were to decide to extend the rule in Rönfeldt to Mr and Mrs Balazs, the only question that would remain is that of the most favourable provision.

1. Arguments of the parties

71. In their written observations, Greece, the Commission and Mr and Mrs Balazs consider that the application of Regulation No 1408/71 would result in a more favourable situation for the beneficiaries as it would enable them to secure an old-age pension in respect of the entire period during which they worked and made contributions in Romania.

72. Only the Romanian Government puts forward an opposing view, essentially relying on two arguments: — first, it submits that it is apparent from Articles 1(e), 2(2) and 5 of the bilateral agreement, and from its objective of final settlement of the compensation in respect of the social security contributions made by repatriated Greek political refugees, that Greece undertook to recognise the entire period of insurance completed in Romania and to pay pensions in respect of the whole of that period. In other words, by limiting the value assigned to that period to 15 years, Greece is unilaterally altering the obligations that is must take on under the bilateral agreement. — second, as to the question whether the rights deriving from the bilateral agreement are more favourable for the beneficiaries than those flowing from Regulation No 1408/71, the Romanian Government observes that the bilateral agreement merely specifies the applicable national legislation for the purpose of granting the pension. It is therefore necessary to establish specifically, in the light of the circumstances of each case, which set of legal rules is most favourable for the beneficiaries. In this instance, given that the amount of the pension paid by the Greek authorities to Mr and Mrs Balazs is higher than that paid to them by the Romanian authorities, application of the bilateral agreement would be more favourable for them, even if the Court were to find that the Greek authorities could unilaterally prescribe the length of the period of insurance taken into account.

2. Assessment

73. I am of the opinion that, in order to determine whether Regulation No 1408/71 or the bilateral agreement is more favourable for Mr and Mrs Balazs, it is necessary first to interpret that agreement and, possibly, the national law applicable pursuant to the agreement.

a) Interpretation of an international convention

74. Although I have a certain measure of sympathy for the Romanian Government’s interpretation of the bilateral agreement, I do not consider that it is for the Court to rule on the scope of Greece’s obligations under that agreement. ( 22 )

75. Nevertheless, it must be stated that, in paragraph 37 of its judgment in Wencel (EU:C:2013:303), the Court held that ‘an EU law provision which, like Article 7(2) of [Regulation No 1408/71], gives precedence to the application of a bilateral convention, cannot have a purport that conflicts with the principles underlying the legislation of which it is part’.

76. The Court has accordingly already held that the provisions of a convention which were included in Annex III to Regulation No 1408/71 — and therefore applicable in place of that regulation — had to be regarded as incompatible with Articles 45 TFEU and 51 TFEU. ( 23 )

77. Although the Court laid down those principles in the context of applying the exception set out in Article 7(2) of Regulation No 1408/71, they apply a fortiori in the context of the exception established by case-law as a result of the judgment in Rönfeldt (EU:C:1991:52).

78. Accordingly, the view may reasonably be taken that, in order to be compatible with the principles underlying Regulation No 1408/71 and Articles 45 TFEU and 51 TFEU, an international convention such as that at issue in the main proceedings should be interpreted as requiring the Hellenic Republic — which undertook, pursuant to Article 2(3) of the bilateral agreement, ‘to pay pensions to retired repatriated persons and to recognise the periods of insurance completed in Romania by insured repatriated persons’ — to calculate a pension for the whole of those periods.

79. Put another way, the reference to Greek law in Article 2(3) of the bilateral agreement does not relieve the Greek authorities of their obligation to interpret that agreement in a way which is compatible with the Treaty.

b) Determination of the most favourable provision

80. As regards the specific determination of the most favourable provision, I am of the opinion, in accordance with the case-law of the Court, that it is ‘for the national court to verify whether application of [the international] convention would in practice be more or less advantageous for the workers concerned than application of the regulation. In the former case, by way of exception and in accordance with the principle stated in the judgment in Rönfeldt, the rules laid down by the [bilateral agreement] should be applied. In the latter case, it is the rules laid down by the regulation, as interpreted by the Court, that must be applied’. ( 24 )

81. In other words, it would be for the national courts ‘to assess whether a claimant has an established right under a social-security convention[, interpreted in accordance with the principles underlying Regulation No 1408/71,] to a more favourable benefit’. ( 25 )

82. To perform that task, the referring court will have to compare the situation of Mr and Mrs Balazs according to whether their pension is calculated and determined under the bilateral agreement, interpreted in accordance with EU law, or under Regulation No 1408/71.

83. In order to determine the entitlements to which Mr and Mrs Balazs may lay claim pursuant to Regulation No 1408/71, the national court will necessarily have to take account of Articles 45, 46 and 94(2) thereof. ( 26 )

84. Under this alternative hypothesis, the national court will also, ultimately, have to apply only one of the two legal instruments to Mr and Mrs Balazs: either Regulation No 1408/71 or the bilateral agreement.

E – Limitation of the temporal effects of the forthcoming judgment

85. In its written observations, the Romanian Government asks the Court to limit the temporal effects of its judgment if it decides that it is incumbent upon the Romanian authorities to grant Mr and Mrs Balazs pension rights under Regulation No 1408/71.

86. That request is meaningful only if the Court upholds the view I have set out in chief or, should the Court not do so, if the referring court finds that Regulation No 1408/71 is more advantageous than the bilateral agreement for the persons concerned.

87. As the Romanian Government acknowledges, such a limitation can be imposed only if two criteria are satisfied, namely, the parties must have acted in good faith and there must be a risk of serious difficulties.

1. Arguments of the Romanian Government

88. On the issue of good faith, the Romanian Government states that its conduct is based on the settled case-law of the Court, according to which EU law precludes the loss of social advantages for workers on account of the replacement of an international convention by Regulation No 1408/71.

89. Furthermore, Romania’s position differs from that of other Member States which entered into agreements with Greece and decided to apply Regulation No 1408/71.

90. As regards the risk of serious difficulties, the Romanian Government relies on the fact that the contributions of the persons covered by the bilateral agreement were earmarked for payment of the lump sum of USD 15 million to the Greek Government and that, if Regulation No 1408/71 were to be applied, other sources of funding would therefore have to be found.

91. According to estimates of the Casa Națională de Pensii Publice (Romanian National Public Pensions Fund), an additional RON 38560683 (approximately EUR 8 680 537) would have to be paid. The Romanian Government adds that around 800 applications similar to those submitted by Mr and Mrs Balazs have been lodged.

2. Assessment

92. As mentioned above, I have a certain measure of sympathy for the Romanian Government’s interpretation of the bilateral agreement and of the scope of the obligations of each party thereto.

93. However, in the context of examining the limitation of the temporal effects of a judgment of the Court, the requirement of good faith relates not to a Member State’s confidence in its interpretation of its national law (including the international agreements to which it is a party), but rather to the confidence it could place in its interpretation of EU law. ( 27 )

94. In the present instance, while the scope of the Rönfeldt case-law may perhaps be the subject of discussion and be open to interpretation, the fact remains that Romania had to expect to apply Regulation No 1408/71 as from 1 January 2007.

95. Although Romania wished to have the bilateral agreement included in Annex III to that regulation, its request was refused by Greece. In those circumstances, it is confidence in the application of the fundamental rule — namely the replacement of the bilateral agreement by Regulation No 1408/71, pursuant to Article 6 of that regulation — which had to prevail.

96. I therefore take the view that it is not appropriate to limit the effects of the forthcoming judgment, since, when the criterion of good faith is not satisfied, ‘it is not necessary to establish whether the second criterion …, relating to the risk of serious difficulties, is satisfied’. ( 28 )

97. In any event, I am of the opinion that the risk of serious difficulties has not been established either.

98. According to estimates of the Romanian National Public Pensions Fund, if Regulation No 1408/71 were to apply an additional RON 38560683 (approximately EUR 8 680 537) would have to be paid, over and above the USD 15 million paid under the bilateral agreement.

99. First of all, in the absence of more specific figures, it cannot be ruled out that the amount indicated by the Romanian Government also covers the 800 applications similar to those submitted by Mr and Mrs Balazs which have already been lodged. Any limitation of the temporal effects of the judgment would have no bearing on those cases. ( 29 )

100. It must also be recalled that the existence of financial consequences for a Member State ensuing from a preliminary ruling does not in itself justify limiting the temporal effects of that ruling. ( 30 ) The risk of serious economic repercussions must also be assessed according to the number of legal relationships entered into in good faith on the basis of rules considered to be validly in force. ( 31 )

101. In addition to the limited nature of the amount relied on, the Romanian Government has not supplied any information on the number of situations which are potentially affected.

102. Accordingly, the condition relating to the existence of serious difficulties cannot be considered to be satisfied.

V – Conclusion

103. In a situation such as that in the main proceedings, the benefit recipients exercised their right to freedom of movement before the relevant social security convention was signed. In view of this particular factor, I take the view that the derogation set out in the judgment in Rönfeldt (EU:C:1991:52) does not apply.

104. Consequently, in the light of the foregoing considerations, I invite the Court to reply as follows to the question referred for a preliminary ruling by the Curtea de Apel Cluj: (1) There may be no derogation from the application of Regulation (EEC) No 1408/71 of the Council 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, in the version amended and updated by Council Regulation (EC) No 118/97 of 2 December 1996, as amended by Regulation (EC) No 1992/2006 of the European Parliament and of the Council of 18 December 2006, when workers falling within the scope of an international social security convention have exercised their right to freedom of movement before the convention’s entry into force. (2) In the alternative, if the Court were to decide to apply the rule in Rönfeldt (C‑227/89, EU:C:1991:52) to the cases in the main proceedings, it would be for the national courts to assess whether Mr and Mrs Balazs have an established right under the bilateral agreement between the Greek and Romanian Governments concerning final settlement of the compensation in respect of the social security contributions made by Greek political refugees repatriated from Romania, concluded on 23 February 1996 — interpreted in accordance with the principles underlying Regulation No 1408/71, in the version amended and updated by Regulation No 118/97, as amended by Regulation No 1992/2006 — to a more favourable benefit than that resulting from the application of Articles 45, 46 and 94(2) of Regulation No 1408/71 in both States.

( 1 ) Original language: French.

( 2 ) OJ 2006 L 392, p. 1.

( 3 ) OJ, English Special Edition 1972 (I), p. 159.

( 4 ) OJ 2006 L 363, p. 1.

( 5 ) See, to that effect, judgment in Wencel (C‑589/10, EU:C:2013:303, paragraph 30). See also judgment in Duchon (C‑290/00, EU:C:2002:234, paragraphs 21 and 22).

( 6 ) See, to that effect, judgment in Wencel (EU:C:2013:303, paragraph 33).

( 7 ) Ibidem, paragraph 36.

( 8 ) The Greek and Romanian Governments are agreed that the bilateral agreement was not included in Annex III to Regulation No 1408/71 following a memorandum submitted by the Greek authorities to the Administrative Commission on Social Security for Migrant Workers. The Administrative Commission approved that memorandum at its 303rd meeting held in Brussels on 12 and 13 December 2006 (despite a request to the contrary made by Romania).

( 9 ) Judgment in Walder (82/72, EU:C:1973:62, paragraph 8).

( 10 ) Ibidem (paragraph 6).

( 11 ) Paragraph 22.

( 12 ) Paragraph 29.

( 13 ) C‑475/93, EU:C:1995:371, paragraphs 26 to 28. See also, to that effect, judgments in Thelen (C‑75/99, EU:C:2000:608, paragraph 16) and Habelt and Others (C‑396/05, EU:C:2007:810, paragraph 119).

( 14 ) Judgment in Thévenon (EU:C:1995:371, paragraph 27).

( 15 ) Paragraph 22. See also, to that effect, judgments in Thelen (EU:C:2000:608, paragraph 14) and Habelt and Others (EU:C:2007:810, paragraph 118) and Opinion of Advocate General Mischo in Kaske (EU:C:2001:549, point 10).

( 16 ) Judgments in Thévenon (EU:C:1995:371, paragraphs 26 to 28); Thelen (EU:C:2000:608, paragraph 16); and Habelt and Others (EU:C:2007:810, paragraph 119).

( 17 ) See, inter alia, Kessler, F., ‘La prise en compte des droits à pension acquis en vertu d’une convention bilatérale conclue avant l’entrée en vigueur du Règlement CEE 1408/71’, Revue de droit sanitaire et social, 1991, pp. 368 to 370, and Van Raepenbusch, S., ‘Les rapports entre le règlement (CEE) No 1408/71 et les conventions internationales dans le domaine de la sécurité sociale des travailleurs circulant à l’intérieur de la Communauté’, Cahiers de droit européen, 1991, pp. 449 to 466, especially point 10. For a point of view expressly in favour of a restrictive interpretation, see González-Sancho López, E., ‘Relaciones entre legislación comunitaria y convenios bilaterales en materia de seguridad social de migrantes: de la sentencia Rönfeldt al caso Peschiutta’, Revista de trabajo y Seguridad Social, No 5, January-March 1992, pp. 81 to 92.

( 18 ) EU:C:1995:371, paragraphs 26 to 28.

( 19 ) In Rönfeldt, (EU:C:1991:52), the international convention in issue, dated 14 August 1953, was between the Federal Republic of Germany and the Kingdom of Denmark. The beneficiary was a German national who had exercised his freedom of movement in 1957 and had returned to Germany in 1971. In Thelen (EU:C:2000:608), the international convention in issue, dated 19 July 1978, was between the Republic of Austria and the Federal Republic of Germany. The beneficiary was a German national who had lived in Austria between 1986 and 1996 and had worked there between 1991 and 1993. In Kaske (EU:C:2002:74), the international convention in issue was again between the Republic of Austria and the Federal Republic of Germany. It had entered into force on 1 October 1979 and the beneficiary had joint German and Austrian nationality. She had been gainfully employed in Austria between 1972 and 1982 and in Germany between 1983 and May 1996 (intermittently), and had returned to Austria in June 1996. In Naranjo Arjona and Others (C‑31/96 to C‑33/96, EU:C:1997:475), the situation was slightly different as the international convention in issue, between the Federal Republic of Germany and the Kingdom of Spain, had entered into force on 1 November 1977, during the beneficiary’s period of residence. The beneficiary was a Spanish national who had exercised his freedom of movement in 1966 and had returned to Spain in 1991. Nevertheless, in that situation too the beneficiary was entitled to entertain a legitimate expectation that the convention in question would apply, as he had remained in the host country for a further 14 years and had returned to his country of origin at a time when the convention was still applicable.

( 20 ) Judgment in Duchon (EU:C:2002:234, paragraph 23). See also, to that effect, judgments in Rönfeldt (EU:C:1991:52, paragraph 16); Rundgren (C‑389/99, EU:C:2001:264, paragraph 29); and Kauer (C‑28/00, EU:C:2002:82, paragraph 22).

( 21 ) Judgment in Belbouab (10/78, EU:C:1978:181, paragraph 8), emphasis added.

( 22 ) See, to that effect, judgment in TNT Express Nederland (C‑533/08, EU:C:2010:243, paragraphs 58 to 63) and order in Hartmann (C‑162/98, EU:C:1998:539), in which the Court pointed out that it did not have jurisdiction to interpret an international agreement entered into by several Member States.

( 23 ) See judgment in Habelt and Others (EU:C:2007:810, paragraphs 124 and 125).

( 24 ) Judgment in Naranjo Arjona and Others (EU:C:1997:475, paragraph 29).

( 25 ) Judgment in Martínez Domínguez and Others (C‑471/99, EU:C:2002:523, paragraph 31).

( 26 ) See the explanations above on the consequences of applying Regulation No 1408/71.

( 27 ) ‘The first condition which must satisfied in order for a preliminary ruling to be limited in time is that the affected parties and the national authorities must have been led into adopting practices which are not consistent with EU law and which are ascribable to an objective and significant uncertainty regarding the implications of the relevant provisions of EU law. Thus, it is not sufficient that those involved acted in good faith as regards the validity of the provisions of EU law or of national law which conflict with EU law’ (Fenger, N., and Broberg, M., Le renvoi préjudiciel à la Cour de justice de l’Union européenne, Larcier, collection Europe(s), 2013, p. 581).

( 28 ) Judgment in Transportes Jordi Besora (C‑82/12, EU:C:2014:108, paragraph 47).

( 29 ) See, to that effect, judgment in Bosman (C‑415/93, EU:C:1995:463, paragraph 144).

( 30 ) See, to that effect, judgment in Nisipeanu (C‑263/10, EU:C:2011:466, paragraph 34).

( 31 ) See, to that effect, judgment in Roders and Others (C‑367/93 to C‑377/93, EU:C:1995:261, paragraph 43).