Judgment of the Court of First Instance (Third Chamber) of 8 January 2003. - Astrid Hirsch, Emanuele Nicastro and Johannes Priesemann v European Central Bank. - Officials - Members of staff of the European Central Bank - Article 19 of the Conditions of Employment - Education allowance - Refusal to grant it to members of staff not entitled to the expatriation allowance under Article 17 of those conditions - Principle of non-discrimination. - Joined cases T-94/01, T-152/01 and T-286/01.



European Court reports - staff cases 2003 Page IA-00001

Page II-00027



Parties

Grounds

Decision on costs

Operative part



Parties

In Joined Cases T-94/01, T-152/01 and T-286/01,

Astrid Hirsch, member of staff of the European Central Bank, resident in Eppstein-Niederjosbach, Germany, represented by G. Vandersanden and L. Levi, lawyers,

Emanuele Nicastro, member of staff of the European Central Bank, resident in Frankfurt on Main, Germany, represented by N. Pflüger, R. Steiner and S. Mittländer, lawyers,

and

Johannes Priesemann, member of staff of the European Central Bank, resident in Frankfurt on Main, Germany, represented by N. Pflüger, lawyer,

applicants,

v

European Central Bank, represented by V. Saintot and T. Gilliams, acting as Agents, assisted by B. Wägenbaur, lawyer, with an address for service in Luxembourg,

defendant,

APPLICATION for annulment, in Case T-94/01, of the decision of the European Central Bank of 25 September 2000 refusing to grant the applicant an education allowance to cover the costs of attendance by her son at the International School Frankfurt, in Case T-152/01, of the decision of the European Central Bank of 15 February 2001 refusing to grant the applicant an education allowance in respect of his two sons and, in Case T-286/01, of the decision of the European Central Bank of 6 June 2001 refusing to grant the applicant an education allowance in respect of his children,

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES

(Third Chamber),

composed of: K. Lenaerts, President, J. Azizi and M. Jaeger, Judges,

Registrar: D. Christensen, Administrator,

having regard to the written procedure and further to the hearing on 24 October 2002,

gives the following

Judgment

Grounds

Legal background

1 Pursuant to Article 36.1 of the Statute of the European System of Central Banks and of the European Central Bank (ECB), annexed to the EC Treaty, the Governing Council adopted the Conditions of Employment for Staff of the European Central Bank (OJ 1999 L 125, p. 32, hereinafter the `Conditions of Employment'), which, in the version applicable to the facts in issue, provide inter alia:

`9.(c) No specific national law governs these Conditions of Employment. The ECB shall apply (i) the general principles of law common to the Member States, (ii) the general principles of European Community (EC) law, and (iii) the rules contained in the EC regulations and directives concerning social policy which are addressed to the Member States. Whenever necessary, these legal instruments will be implemented by the ECB. EC recommendations in the area of social policy will be given due consideration. In interpreting the rights and obligations under the present Conditions of Employment, due regard shall be shown for the authoritative principles of the regulations, rules and case-law which apply to the staff of the EC institutions.

...

17. Under the conditions laid down in the Staff Rules, an expatriation allowance equal to 16% of the total amount of the basic salary, household allowance and child allowance shall be paid to:

(i) members of staff who are not and never have been nationals of the State in whose territory their place of employment is situated, unless they have habitually resided or carried out their main occupation within the present territory of that State for the entire five-year period ending six months before they entered the service of the ECB; and

(ii) members of staff who are or have been nationals of the State in whose territory their place of employment is situated and who have habitually resided outside the present territory of that State for the entire ten-year period ending at the date of their entering the service of the ECB.

The allowance shall not be less than EUR 437 per month.

18. Under the conditions laid down in the Staff Rules, an expatriation allowance equal to 4% of the total amount of the basic salary, household allowance and child allowance shall be paid to members of staff who are not and never have been nationals of the State in whose territory their place of employment is situated and who have habitually resided or carried out their main occupation within the present territory of that State for the entire five-year period ending six months before they entered the service of the ECB.

19. Until the establishment of a European School in the Frankfurt area, members of staff who are entitled to an expatriation allowance of 16% shall be entitled to an education allowance for each dependent child who is in regular full-time attendance at an educational establishment, subject to the following conditions and in accordance with the Staff Rules:

(i) for attendance at an international school within the Frankfurt area which is recognised as such by the ECB in accordance with the Staff Rules, the allowance will be equal to whichever of the following is the greater:

- 100% of tuition fees; or

- the actual education costs, i.e. tuition fees, boarding fees and prescribed books, up to a maximum of EUR 437 per month.

The above entitlements shall be reduced by EUR 111 per month for attendance at pre-primary classes at such schools;

(ii) for attendance at other educational establishments:

- entitlement to the allowance commences on the first day of the month in which the child begins to attend a primary educational establishment;

- the allowance shall be equal to the actual education costs, i.e. tuition fees, boarding fees and prescribed books, up to a maximum of EUR 437 per month.

...

42. After all available internal procedures have been exhausted, the Court of Justice of the European Community shall have jurisdiction in any dispute between the ECB and a member or a former member of its staff to whom these Conditions of Employment apply.

Such jurisdiction shall be restricted to the legality of the measure or decision, unless the dispute is of a financial nature, in which case the Court of Justice shall have unlimited jurisdiction.'

Facts

2 The applicants are members of staff of the ECB, each having one or more dependent children of school-age. Mrs Hirsch has a son who has been attending the International School in Frankfurt (`the ISF') since the 2000/01 school year. Mr Nicastro has two sons whom he wished to enrol at the ISF with effect from the 2001/02 school year. Mr Priesemann has three children of school-age, whom he also wished to enrol at the ISF with effect from the 2001/02 school year.

3 On 31 August 2000 (Case T-94/01), 5 February 2001 (Case T-152/01) and 24 April 2001 (Case T-286/01) respectively, the applicants applied to the ECB for the grant of an education allowance.

4 Their applications were rejected by the ECB on 25 September 2000 (Case T-94/01), 15 February 2001 (Case T-152/01) and 6 June 2001 (Case T-286/01) on the same ground, namely that the applicants were not entitled to the 16% expatriation allowance provided for in Article 17 of the Conditions of Employment (hereinafter `the 16% expatriation allowance') and were not therefore entitled to an education allowance under Article 19 of those conditions.

5 In each case, the ECB's refusal was the subject of an application for administrative review, sent to the Director-General of the ECB's Administration and Personnel Directorate-General, which was rejected on 21 December 2000 (Case T-94/01), 19 April 2001 (Case T-152/01) and 19 July 2001 (Case T-286/01); it was then the subject of a complaint to the President of the ECB under a grievance procedure, which was also rejected on 20 February 2001 (Case T-94/01), 17 May 2001 (Case T-152/01) and 24 September 2001 (Case T-286/01).

Procedure

6 Those were the circumstances in which, by applications lodged at the Registry of the Court of First Instance on 27 April 2001 (Case T-94/01) , 6 July 2001 (Case T-152/01) and 22 November 2001 (Case T-286/01), the applicants brought the present actions.

7 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Third Chamber) decided to open the oral procedure and, in the course of measures of organisation of procedure provided for in Article 64 of the Rules of Procedure of the Court of First Instance, asked the ECB to reply in writing to a number of questions. The ECB replied within the time-limit allowed.

8 The parties presented oral argument and replied to the questions of the Court at the hearing on 24 October 2002.

9 After hearing the views of the parties at the hearing, the Court (Third Chamber) considers that it is appropriate to join the three cases for the purposes of judgment.

Forms of order sought

10 In Case T-94/01 Mrs Hirsch claims that the Court should:

- annul the decision of the ECB of 25 September 2000 and, if necessary, the decisions of the ECB of 21 December 2000 and 20 February 2001;

- order the ECB to reimburse tuition fees amounting to EUR 11 370 for the school year 2000/01 and tuition fees for future school years, with interest of 8% per year from 1 September of each year until payment of the sums due, and installation fees of EUR 5 922, together with interest of 8% per year from 1 September 2001;

- order the ECB to pay the costs.

11 In Case T-152/01 Mr Nicastro claims that the Court should:

- annul the decision of the ECB of 15 February 2001 and, if necessary, its decisions of 19 April and 17 May 2001;

- declare that he is entitled to the grant of an education allowance for his two sons in accordance with his application of 5 February 2001 and that in the circumstances the rejection of that application is void and in any event of no legal effect;

- order the ECB to pay the costs.

12 In Case T-286/01 Mr Priesemann claims that the Court should:

- annul the decision of the ECB of 6 June 2001 and, if necessary, its decisions of 19 July and 24 September 2001;

- declare that he is entitled to the grant of an education allowance for his children Carolin, Caspar and Lena, in accordance with his application of 24 April 2001 and that in the circumstances the rejection of that application is void and in any event of no legal effect;

- order the ECB to pay the costs.

13 The ECB contends in each case that the Court should:

- dismiss the application;

- order the applicant to pay her own costs (Case T-94/01) or order in accordance with the rules on costs (Cases T-152/01 and T-286/01).

Admissibility

14 In Cases T-152/01 and T-286/01 the ECB challenges the admissibility of the head of the form of order by which the applicant seeks a declaration by the Court that the applicant is entitled to an education allowance and that, in consequence, the rejection of his application in that regard is of no legal effect.

15 It is in fact settled law that in the course of action for annulment it is not for the Court to make findings or declarations of principle, otherwise it may encroach on the prerogatives of the defendant institution. In the event of the annulment in whole or in part of the contested decision, the institution concerned is required by Article 233 EC to take the necessary measures to comply with the judgment (see, in particular, Case T-583/93 P v Commission [1995] ECR-SC I-A-137 and II-433, paragraphs 17 and 18). The second head of the form of order sought by Mr Nicastro and by Mr Priesemann must therefore be rejected as inadmissible.

16 It must be added that, the conditions of admissibility of an action being a matter of public policy, the Court may examine them of its own motion under Article 113 of the Rules of Procedure. Its power of review is not limited to the pleas of inadmissibility put forward by the parties (Case T-130/89 B. v Commission [1990] ECR II-761, summary publication, paragraph 13, and Case T-173/99 Elkaïm and Mazuel v Commission [2000] ECR-SC I-A-101 and II-433, paragraph 19). Thus, it must examine of its own motion whether the various requests made in the application are admissible.

17 In Case T-94/01, by the second head of the form of order, Mrs Hirsch is seeking an order that the ECB reimburse her EUR 11 370 in respect of tuition fees for attendance by her son at the ISF during the 2000/01 school year, EUR 5 922 in respect of the installation fees paid upon his enrolment at the school, and tuition fees for subsequent school years, plus default interest.

18 It is settled law that such an order is inadmissible (Case C-5/93 P DSM v Commission [1999] ECR I-4695, paragraph 36; Case T-156/89 Valverde Mordt v Court of Justice [1991] ECR II-407, paragraph 150, and Case T-192/99 Dunnet and Others v EIB [2001] ECR-SC I-A-65 and II-313; ECR II-813, paragraph 70).

19 Furthermore, the head referred to in paragraph 17 above, inasmuch as it relates to reimbursement of tuition fees in respect of school years subsequent to the 2000/01 school year, concerns expenses which, not having been incurred when the application was lodged, are unquantified; the Court is not therefore able to rule on them. Moreover, the applicant's application for reimbursement of those fees was made for the first time before the Court, thereby infringing the recognised principles of case-law applicable by analogy to a dispute between the ECB and a member of its staff, according to which the form of order sought before the Court must have the same subject-matter as that raised in the course of the pre-litigation procedure (see, in particular, Case T-12/94 Daffix v Commission [1997] ECR-SC I-A-453 and II-1197, paragraph 120).

20 It follows that the second head of the form of order sought by Mrs Hirsch must be rejected as inadmissible.

21 The present actions are therefore admissible inasmuch as they seek the annulment of the ECB decisions of 25 September 2000 (Case T-94/01), 15 February 2001 (Case T-152/01) and 6 June 2001 (Case T-286/01), refusing to grant an education allowance to the applicant concerned (hereinafter `the contested decisions'), as confirmed in each case by the ECB decisions rejecting the application for administrative review and rejecting the complaint.

Substance

22 In Case T-94/01 the action is based on two pleas. The first plea alleges infringement of the principle of non-discrimination. The second plea alleges infringement of the duty to have regard to the interests of members of staff. In Case T-152/01 the action is based on a single plea alleging infringement of the principle of equal treatment and of the duty to have regard to the interests of members of staff. Case T-286/01 is based on a single plea alleging infringement of the principle of equal treatment.

23 The Court will first examine the first plea raised by Mrs Hirsch, the single plea raised by Mr Nicastro inasmuch as it alleges infringement of the principle of equal treatment, and the single plea raised by Mr Priesemann.

Arguments of the parties

24 The applicants put forward, in essence, five arguments in support of the pleas in question.

25 First, they submit that Article 19 of the Conditions of Employment establishes a difference in treatment between children of members of staff of the ECB according to whether or not their parents are expatriates. However, that distinction is not relevant. The education allowance is not intended for the member of staff; its aim is to provide for the child's education. Nor is expatriation necessarily synonymous with the difficulties which a child may face in adjusting to school. Mrs Hirsch refers in that context to the case of an Austrian member of staff. Mr Nicastro and Mr Priesemann cite the case of a German member of staff who is in the situation referred to in Article 17(ii) of the Conditions of Employment and who has a right to a 16% expatriation allowance and thus to an education allowance for his child, even though the difficulties in the child's adjustment to the school ceased upon his return to Germany.

26 The applicants add that the expatriation allowance is intended to compensate for the expenses and disadvantages resulting from the permanent performance of duties in a country with which the member of staff has not established a durable link before he takes up his duties. The fact that the child allowance referred to in Article 16 of the Conditions of Employment is taken into account when calculating the amount of the 16% expatriation allowance shows that the latter allowance already covers the inconvenience suffered by the child of the member of staff concerned, so that the additional grant of an education allowance solely to expatriate staff results in their being placed in a more favourable situation than non-expatriate staff. Furthermore, since the expatriation allowance ensures that equality, in terms of schooling, is established between expatriate and non-expatriate children, the education allowance cannot be regarded as pursuing that same objective. Having regard to that different objective, the right to an expatriation allowance cannot constitute a factor which is capable of objectively justifying the different treatment under Article 19 of the Conditions of Employment.

27 Moreover, under the Staff Regulations of Officials of the European Communities (hereinafter `the Staff Regulations of Community officials'), an entitlement to the expatriation allowance is not a condition for the grant of the education allowance.

28 Second, the applicants submit that attendance at an international school is not the best method of enabling the subsequent reintroduction of children of expatriate members of staff into the education system of their country of origin because most courses are given in English and the international schools do not take account of national particularities. Considerations relating to that objective or the concern to preserve the cultural identity of those children cannot therefore be put forward to justify the unequal treatment under Article 19 of the Conditions of Employment.

29 Third, the applicants submit that the ECB's refusal to grant them, unlike expatriate members of staff, an education allowance where their children attend the ISF deprives them of a solution which offers better quality education than that provided by State schools in Germany and allows their parents, because of the timetabling of courses and the reception and care of their children, to better reconcile their working and private lives. They add that, the care of children being, as a general rule, assumed by the mother, the difference in treatment established by Article 19 of the Conditions of Employment infringes Article 141 EC.

30 Mrs Hirsch submits that the enrolment of her son in a German State school would oblige her to reduce her working hours, and thus to agree to a reduction in her income or to incur significant child-care costs that are not covered by the ECB. She adds that, for reasons relating in particular to their parents' financial situation, not all children of non-expatriate staff necessarily have access to all German educational establishments.

31 Fourth, Mrs Hirsch claims that the fact that the future European School in Frankfurt will be free for all children of ECB staff members, whether expatriate or not, proves that those children are in the same objective situation and must therefore be treated in the same way. Mr Priesemann submits that, in order to make up for the absence of fees for that school, the ECB will make a donation to it which will benefit all staff of the ECB and their children. It is difficult to understand why only the children of staff with a right to the expatriation allowance may currently receive an education allowance, whereas, with effect from the opening of the European School, all the children of members of staff of the ECB will benefit from the support of that school.

32 Fifth, Mr Nicastro, in his reply, and Mr Priesemann submit that Article 19 of the Conditions of Employment is based on the principle of the unity of the European public service. It aims to encourage, pending the opening of the European School in Frankfurt, attendance at international schools; those schools best fulfil the objectives pursued by the uniform system of European Schools, namely, first, to promote a school system which takes children throughout the day and thereby enables staff of the Community institutions to concentrate on their work and to allow their spouses also to work; second, to encourage, within a body of staff made up of nationals of all the Member States, the development of a cosmopolitan and tolerant spirit; third, to create conditions which allow members of staff of the Community institutions with dependent children to change institution without fearing that their children may have difficulties when changing schools.

33 A literal interpretation of Article 19 of the Conditions of Employment would partially prevent the achievement of its aim, since ECB staff who are not entitled to the 16% expatriation allowance would, without any objective justification, be treated differently from those entitled to it, although they are in a comparable situation. On the other hand, to interpret Article 19 of the Conditions of Employment in accordance with the principle of equal treatment would allow all staff of the ECB to be treated equally in regard to the schooling of their children.

34 The ECB disputes, first, the submission that Article 19 of the Conditions of Employment is illegal. It contends that Article 19 is not contrary to the principle of equal treatment, since the two categories of children to which the difference in treatment relates are not in the same objective situation. The fact that a member of staff is expatriated within the meaning of Article 17 of the Conditions of Employment has an effect on the situation of his child, in particular in terms of schooling. To provide for the schooling of an expatriate child is, according to the ECB, objectively more difficult and more costly than the schooling of a non-expatriate child. The schooling of an expatriate child entails attendance at a private school or an international school capable of giving him education in his own language and/or of enabling him subsequently to pursue his studies in his State of origin or in a State with which he has a cultural connection. The expatriate child thus has, in terms of educational establishments, an objectively more limited choice than that of the non-expatriate child, who, being in a familiar educational environment, has access to all educational establishments in his State, whether they be public or private, national or international.

35 The purpose of the education allowance provided for in Article 19 of the Conditions of Employment is to compensate for the expenses and inconvenience caused by expatriation in regard to the schooling of children. That allowance is intended to re-establish, in an objective manner, equality between the children of expatriate staff and those of non-expatriate staff as regards access to education and the expenses of schooling.

36 With regard to the case cited by Mrs Hirsch, of the Austrian child at school in Germany, the ECB states that the fact that the child is able to follow education in his mother tongue in Germany does not cause him to lose his status as an expatriate. With regard to the case cited by Mr Nicastro and Mr Priesemann, of the German member of staff who falls under Article 17(ii) of the Conditions of Employment, the ECB maintains that the children of that member of staff, who may never have attended a German school, undeniably feel dislocated upon their return to Germany even though they are of German nationality.

37 The ECB adds that the disadvantages of expatriation in terms of schooling for children are not covered by the 16% expatriation allowance; that allowance is only intended to compensate for the expenses and disadvantages incurred by a member of staff resulting from the permanent performance of duties in a country with which he has not established previous durable links before entering into service. Contrary to the applicants' claim, the difficulties in adjusting to schooling are not compensated for by the part of the expatriation allowance corresponding to 16% of the child allowance, since that allowance is not sufficient to cover the costs of attending an international school. Moreover, the applicants' claim is tantamount to denying the need for the education allowance which they seek and, if allowed, would lead to discrimination against expatriate staff with children in comparison with those who have no children, because the former would receive, despite their clearly higher expenses, an expatriation allowance equal to that paid to the latter.

38 The applicants' reference to the conditions for the grant of an education allowance laid down in the Staff Regulations of Community officials does not affect the legality of the rule adopted by the ECB in Article 19 of the Conditions of Employment. That rule is based on objective criteria and, moreover, the children of Community officials are all able to attend a European School, which is not the case for the children of ECB staff.

39 Second, the ECB states that, although the international schools do not provide schooling which allows all expatriate children, whatever their nationality, to be educated in their mother tongue, the education provided by those schools nevertheless adopts an international approach in order to reduce the inconvenience suffered by a child in having to leave the educational environment of his home country and to facilitate the future reintegration of pupils into the educational system of their Member State of origin or of the State with which they have a cultural connection. In the current situation, those schools constitute the best alternative to the German school system.

40 Third, the ECB submits that the aim of the education allowance is not to allow ECB staff to reconcile their working life with their private life, so that the submissions by the applicants regarding the conditions under which children are received and cared for in the international schools and in the German State schools cannot be relevant in a review of the lawfulness of the criteria for granting the education allowance. It denies, moreover, that Article 141 EC is relevant and asserts that the principle of equal treatment of the sexes is not at issue in the present cases.

41 As to the alleged actual obligation on Mrs Hirsch to enrol her son at the ISF, the ECB submits that her argument is based on purely factual considerations and conjecture which cannot have any bearing on the lawfulness of the criteria laid down in Article 19 of the Conditions of Employment. The financial considerations to which she refers do not alter the fact that non-expatriate children, such as her son, may, unlike expatriate children, attend the German school system.

42 Fourth, the ECB submits that the fact that the absence of a European School in the Frankfurt region is one of the conditions for the grant of the education allowance shows the underlying logic and objective of Article 19 of the Conditions of Employment. Once that school opens, all the children of ECB staff will receive free schooling in their mother tongue, which will enable them to pursue their studies afterwards in their own State of origin, so that there will no longer be any reason for the education allowance. The ECB admits that the situation of parents of non-expatriate children will be improved as a result, since their children will have free access to the European school, which will constitute another educational establishment which can provide education in German and will allow them to pursue their studies in Germany. However, that fact does not affect the legality of the rules currently applicable to them, since they are based on objective criteria.

43 The ECB adds that the aim of creating the European School is to offer a quality and diversified education to all dependent children of ECB staff, whereas the aim of the education allowance is to compensate for the educational disadvantages suffered by the children of expatriate parents. That difference in aim justifies the adoption of two measures based on different criteria. Moreover, the ECB's decision to give to the children of all of its staff the right to attend the European School without charge is not motivated by a wish to eradicate any previous alleged discrimination.

44 Fifth, the ECB submits that Article 19 of the Conditions of Employment concerns a right to a financial benefit, so that it cannot be interpreted in the broad manner suggested by Mr Nicastro and Mr Priesemann; moreover, that interpretation is irreconcilable with the wording and purpose of that article.

Findings of the Court

45 It common ground that in all three cases the reason for the contested decisions is that the applicant in question is not entitled to the 16% expatriation allowance.

46 Moreover, the applicants do not deny that they fail to fulfil the criteria laid down in Article 17 of the Conditions of Employment and cannot therefore lay claim to that allowance. Mrs Hirsch is a German national and has always resided in Germany. Mr Nicastro is not a German national but, when he entered the service of the ECB, he had been living for more than five years in Germany and is therefore not eligible for the 16% expatriation allowance by virtue of Article 17(i) of the Conditions of Employment. Mr Priesemann is a German national and the period of his residence outside Germany, namely 1992 to 1996, is less than the ten-year period laid down in Article 17(ii) of the Conditions of Employment for entitlement to that allowance.

47 The applicants submit, however, that to deny them the education allowance on the ground that they are not entitled to the 16% expatriation allowance unlawfully discriminates against them in comparison with ECB staff who are entitled to that allowance.

48 The Court finds that, in adopting the contested decisions, the ECB complied with the terms of Article 19 of the Conditions of Employment, which, contrary to the claims of Mr Nicastro and Mr Priesemann (see paragraph 32 above), can be construed only as making the award of an education allowance conditional upon entitlement to the 16% expatriation allowance.

49 In each case, the applicant's argument must in fact be understood as an allegation that the contested decision infringes the principle of equal treatment because Article 19 of the Conditions of Employment, on which that decision is based, is contrary to that principle. Consequently, in each case there are grounds for finding that, as the applicants stated at the hearing, a plea of illegality has been raised before the Court within the meaning of Article 241 EC (see, to that effect, Case T-536/93 Benzler v Commission [1994] ECR-SC I-A-245 and II-777, paragraph 31, and Case T-171/00 Spruyt v Commission [2001] ECR-SC I-A-187 and II-855, paragraph 53), which the ECB has also recognised, as is shown by its pleadings.

50 The parties agree that the legal basis for the contested decisions was Article 19 of the Conditions of Employment. It is, moreover, a provision of general scope affecting the applicants but whose annulment they are not able to seek under Article 230 EC. In those circumstances, the plea of illegality raised against that article is admissible (see, to that effect, Case 92/78 Simmenthal v Commission [1979] 777, paragraph 39; Joined Cases T-6/92 and T-52/92 Reinarz v Commission [1993] ECR II-1047, paragraph 56, and Spruyt v Commission, cited in paragraph 49 above, paragraph 62). It is therefore necessary to consider whether it is well founded.

51 The Court has consistently held that the principle of non-discrimination or equal treatment, which is a fundamental principle of law, prohibits comparable situations from being treated differently or different situations from being treated in the same way, unless such difference in treatment is objectively justified (see, in particular, Case 91/85 Christ-Clemen and Others v Commission [1986] ECR 2853, paragraph 10, Case C-174/89 Hoche [1990] ECR I-2681, paragraph 25, and the case-law cited there). In a matter which, like the present cases, involves the exercise of a discretion, that principle is infringed where the institution concerned makes a differentiation which is arbitrary or manifestly inappropriate in relation to the objective pursued by the rules in question (Case T-164/97 Busacca and Others v Court of Auditors [1998] ECR-SC I-A-565 and II-1699, paragraph 49).

52 In the present case, Article 19 of the Conditions of Employment treats members of staff of the ECB who receive the 16% expatriation allowance differently from those who do not receive that allowance, the former, unlike the latter, being entitled to an education allowance. It is therefore necessary to ascertain whether, in the light of the objective of the rules, the respective situations of those two categories of staff justify such different treatment.

53 It must be noted that under its independent rule-making powers, the ECB decided to establish an `education allowance' in Article 19 of the Conditions of Employment. It has never claimed that this reference to an `education allowance' is purely fortuitous and in reality relates to a financial benefit of some other nature. Article 19 of the Conditions of Employment cannot, in those circumstances, be interpreted as the implementation of the ECB's wish to derogate, by way of a special provision, from the general scheme of the education allowance system, as established by the case-law applicable to the staff of the Community institutions, which the ECB must take into account pursuant to Article 9(c) of those conditions.

54 According to the case-law applicable to staff of the Community institutions, the objective of the scheme of education allowances is to ensure that every member of staff is able to provide for his children's upbringing and education (see, in particular, Joined Cases 152/81, 158/81, 162/81, 166/81, 170/81, 173/81, 175/81, 177/81 to 179/81, 182/81 and 186/81 Ferrario and Others v Commission [1983] ECR 2357, paragraph 10).

55 Admittedly, there is no doubt that, until the European School in Frankfurt opens, the education of a child of a member of staff in receipt of the 16% expatriation allowance entails, as a general rule, high expenses associated with attendance in Germany at an international school or a school providing education in the child's mother tongue, or at a boarding school in the State of origin, whereas a staff member who is not in receipt of such allowance is, by virtue of access to the German school system, normally able to obtain education for his child at lesser expense, possibly even free of charge.

56 However, that does not justify the fact that members of staff who do not receive the 16% expatriation allowance are, when faced with the expenses of schooling, denied the right to an education allowance, contrary to the objective of that scheme.

57 It must be noted in that regard that the fact of attributing a compensation function to the education allowance provided for in Article 19 of the Conditions of Employment - and not a flat rate function - under which the allowance depends on the actual educational expenses incurred and, subject to a particular ceiling, on the amount of those expenses, in itself reveals the objective difference between the respective general situations of the two categories of staff involved. In accordance with the compensation principle, a member of staff of the ECB who is able to provide education for his child at minimal expense, or even free of charge - which is, according to the ECB, the situation of the large majority of staff members who do not receive the 16% expatriation allowance - will receive an education allowance of a minimal amount or not be able to claim any allowance at all, whereas a member of staff who is faced with high education expenses - which, according to the ECB, is the case of practically all the members of its staff in receipt of the 16% expatriation allowance - will be entitled to an education allowance which reflects the amount of those expenses.

58 In that context, the criterion for an additional award based on a person's entitlement to the 16% expatriation allowance is manifestly disproportionate with regard to the ECB's legitimate concern to take account of the fact that the schooling of the child of a member of staff in receipt of the 16% expatriation allowance is generally more expensive than the schooling of the child of a member of staff who is not in receipt of that allowance. That criterion also infringes the principle of equal treatment, inasmuch as it denies an education allowance to a member of staff who is not in receipt of the 16% expatriation allowance and who, because of particular constraints or personal reasons that are not open to question, must, in order to provide for the upbringing and education of his child, incur costs comparable in size to those which may be incurred by a member of staff in receipt of that allowance.

59 Nor can the fact that there is a restricted choice for the education of children of staff members in receipt of the 16% expatriation allowance be regarded as a relevant justification for the different treatment under Article 19 of the Conditions of Employment.

60 Admittedly, in most cases the child of a member of staff in receipt of the 16% expatriation allowance does not have any choice but to pursue his education in an international school recognised by the ECB, in an environment which differs from that which he would have experienced in his State of origin, a state of affairs likely to give rise to difficulties of adjustment, whereas, as a rule, the child of a member of staff who is not in receipt of the expatriation allowance is able to pursue his schooling in a familiar environment containing a wide range of educational establishments.

61 The Court points out, however, that under Article 17 of the Conditions of Employment the 16% expatriation allowance is calculated on the basis of `the total amount of the basic salary [of the member of staff], household allowance and child allowance'. When that allowance is calculated, account is therefore taken of the family situation of the member of staff concerned. Consequently, that allowance covers all types of difficulties of adjustment encountered by the member of staff or his family following their installation in Germany, in particular those encountered by his children owing to the change of country in which they are educated.

62 This analysis of the situation is confirmed by paragraph 11 of the Opinion of Advocate General Jacobs in Case 201/88 Atala-Palmerini v Commission [1989] ECR 3109):

`The expatriation allowance, under Article 4(1) of Annex VII [of the Staff Regulations of Community officials], is a continuing monthly payment and as such is intended to compensate for the continuing disadvantages which result from living in a foreign country in order to work for the Communities. ... Moreover, in Case 147/79 Hochstrass v Court of Justice [1980] ECR 3005, at p. 3020, the Court explained that the foreign residence allowance under Article 4(2) of Annex VII was intended to compensate for the disadvantages which officials undergo as a result of their status as aliens, and it held: "It cannot be denied that an official who has not and has never had the nationality of the State in whose territory his place of employment is situated may be subject, by reason of his status as an alien, to a number of inconveniences both in law and in fact, of a civic, family, educational, cultural and political nature, which the nationals of the country do not experience." Similar considerations in my view apply to the expatriation allowance under Article 4(1) of Annex VII, and the emphasis should be placed on the fact that that allowance is intended to compensate for the long-term disadvantages of becoming an expatriate.'

63 The considerations in the passage set out in the preceding paragraph, which, by virtue of Article 9(c) of the Conditions of Employment, apply to the expatriation allowance provided for in Article 17 of those conditions, confirm that the disadvantages of expatriation covered by the award of an expatriation allowance include not only disadvantages specific to the official or the member of staff concerned, but also those of the members of his family.

64 It follows that, by including the child allowance within the basis for calculating the 16% expatriation allowance in Article 17 of the Conditions of Employment, the ECB is already taking into account the difficulties faced by the child in having to adjust to a foreign school environment and having to accept a limited choice of educational establishments.

65 In any event, even if, as the ECB contends, the inclusion of the child allowance in the basis for calculating the 16% expatriation allowance does not cover the specific disadvantages encountered by the child in his schooling, that does not justify a difference in treatment in regard to the education allowance as radical as that under Article 19 of the Conditions of Employment, by virtue of which members of staff not in receipt of the expatriation allowance are denied any financial support by the ECB despite their possible exposure to educational expenses, contrary to the objective of the scheme of education allowances.

66 Such different treatment is all the more disproportionate in view of the fact that a number of situations are incompatible with the ECB's contention that the children of staff in receipt of the 16% expatriation allowance are in a less favourable situation, in terms of school environment and choice of educational establishments, than the children of staff who do not receive that allowance.

67 The Court observes, first, that in certain cases the child of a member of staff in receipt of the 16% expatriation allowance may find, in Germany, the school environment which he had in his State of origin. Thus, the child of a French member of staff is able to attend the Lycée français in Frankfurt, which enables him to follow or to continue education in his mother tongue and in a familiar school environment. Despite a limited, and possibly non-existent choice, that child is therefore placed, in terms of conditions of schooling, in a situation as comfortable as that of the child of a member of staff who does not receive the 16% expatriation allowance.

68 Second, the child of a member of staff in receipt of the 16% expatriation allowance may stay in his State of origin with the spouse or another member of the family in order to follow or continue his schooling there. If so, expatriation of the member of staff does not require the child to adjust to a foreign school environment and does not, as such, affect the choice of education which he has in his State of origin. That child does not therefore experience conditions of schooling that are less comfortable than those of the child of a member of staff not in receipt of the 16% expatriation allowance.

69 Lastly, there are a number of situations in which the child of a member of staff in receipt of the 16% expatriation allowance has, in Germany, a choice of education comparable to that generally enjoyed by the child of a member of staff not entitled to that allowance. That is so, for example, in the case of a child of a mixed couple comprising a member of staff of the ECB in receipt of the 16% expatriation allowance and a German national, or in the case of a child, one of whose parents satisfies the conditions laid down in Article 17(ii) of the Conditions of Employment (member of staff of the ECB who has habitually resided abroad for at least 10 years before his entry into service) and who, not having started school before his arrival in Germany, will experience no difficulty in adjusting to the German educational system.

70 On the other hand, the child of a member of staff not in receipt of the 16% expatriation allowance may be faced with a reduced choice of education. Various reasons (geographical, personal or family considerations) may lead to an actual restriction in the - theoretically wide - choice of schooling available to the child of a German member of staff who has always resided in Germany. So too, because of the different educational structures in the various German Länder, a German member of staff from a Land other than Hessen may have no option, following his posting to the ECB, but to enrol his child in a boarding school in his Land of origin. Moreover, the child of a German member of staff who has, prior to entry into service of the ECB, resided outside Germany for less than the ten-year period provided for in Article 17(ii) of the Conditions of Employment, may find that because he was in a different educational system before his arrival in Germany he is actually unable to fit into the German system.

71 In the light of the foregoing, the Court finds that, in making the right to an education allowance dependent on entitlement to the 16% expatriation allowance, the ECB applied a criterion that is manifestly inadequate in the light of the objective of the scheme of education allowances.

72 It follows that Article 19 of the Conditions of Employment, in restricting entitlement to an education allowance to members of staff who are entitled to the 16% expatriation allowance and excluding members of staff who are not entitled to the 16% expatriation allowance, infringes the principle of equal treatment and is therefore illegal.

73 Consequently, the contested decisions must be annulled and it is not necessary to examine the other arguments and pleas put forward by the applicants. Pursuant to Article 233 EC it is for the ECB to give due effect to this judgment by modifying the scheme of education allowances under Article 19 of the Conditions of Employment, in the light of the grounds of this judgment, so that they accord with the principle of equal treatment, and by reviewing, under the scheme as so modified, the applicants' requests for the grant of an education allowance in respect of their children.

Decision on costs

Costs

74 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs, if they have been applied for in the successful party's pleadings. Since the ECB has been unsuccessful in all three cases, it must be ordered to pay the costs, in accordance with the form of order sought by the applicants.

Operative part

On those grounds,

THE COURT OF FIRST INSTANCE

(Third Chamber)

hereby:

1. Joins Cases T-94/01, T-152/01 and T-286/01 for the purposes of judgment;

2. In Case T-94/01:

- Annuls the decision of the European Central Bank of 25 September 2000;

- Dismisses the remainder of the action;

- Orders the European Central Bank to pay the costs;

3. In Case T-152/01:

- Annuls the decision of the European Central Bank of 15 February 2001;

- Dismisses the remainder of the action;

- Orders the European Central Bank to pay the costs;

4. In Case T-286/01:

- Annuls the decision of the European Central Bank of 6 June 2001;

- Dismisses the remainder of the action;

- Orders the European Central Bank to pay the costs.