50 years of social security coordination : past, present, future.
Date: 2010-06-16
Institutions: Directorate-General for Employment, Social Affairs and Inclusion
Subjects: EU law, conference proceedings, social legislation, social policy, social security

50 years of Social Security 
Coordination
Past – Present – Future

Report of the conference celebrating  
the 50th Anniversary of the 
European Coordination of Social Security

Prague, 7 & 8 May 2009

Responsible Editor
Prof. dr. Yves Jorens – Ghent University, Belgium 

This book contains the contributions of the European conference, organised by the Social Law Depart-
ment of the Ghent University, on behalf of the European Commission, DG Employment, Social Affairs and 
Equal Opportunities, on 7 and 8 May in Prague, on the occasion of the 50th  Anniversary of the European 
Coordination of Social Security.

European Commission

Directorate-General for Employment, Social Affairs and Equal Opportunities 
Unit E.3

Manuscript completed in May 2009

This book contains the contributions of the European conference, organised by the Social Law Department of Ghent 

University, on behalf of the European Commission, Employment, Social Affairs and Equal Opportunities DG, on 7 and 8 

May in Prague, on the occasion of the 50th Anniversary of the European Coordination of Social Security. 

This text was written at a time when the Lisbon Treaty had not yet entered into force. Therefore, in their contributions 

the authors still refer to the relevant articles of the old Treaty on European Union and of the old Treaty establishing the 

European Community.

Neither the European Commission nor any person acting on behalf of the Commission may be held responsible for the use 

that may be made of the information contained in this publication. 

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TABLE OF CONTENTS

PREFACE  ................................................................................................................................................................................................... 5-7

Opening speech by Mrs Lenia Samuel, Deputy Director General

European Commission - Employment, Social Affairs and Equal Opportunities DG

A SHORT HISTORY OF SOCIAL SECURITY COORDINATION  ..................................................................................................8-28

Simon Roberts 

THE ROLE OF THE EUROPEAN COURT OF JUSTICE IN THE DEVELOPMENT 

OF SOCIAL SECURITY LAW OF PERSONS MOVING WITHIN THE EUROPEAN UNION  ............................................... 29-54

Sean Van Raepenbusch

ACHIEVEMENTS OF 50 YEARS OF EUROPEAN SOCIAL SECURITY COORDINATION  ................................................. 55-71 

Rob Cornelissen

APPLICATION OF THE COORDINATION REGULATION 

IN THE CONTEXT OFDECENTRALISATION AND REGIONALISATION 

IN MATTERS OF SOCIAL SECURITY ............................................................................................................................................. 72-90

Eberhard Eichenhofer

THE IMPLEMENTATION OF COORDINATION REGULATIONS 

IN ACTIVE LABOUR MARKET POLICY PROVISIONS AT NATIONAL LEVEL ....................................................................91-111

Maximilian Fuchs

THE IMPACT OF ARTICLES 12, 18, 39 AND 43 OF THE EC TREATY 

ON THE COORDINATION OF SOCIAL SECURITY SYSTEMS ............................................................................................ 112-128

Eleanor Spaventa

COORDINATION IN THE CONTEXT OF INTERNAL MARKET RULES 

OR HOW TO RESOLVE THE MIDLIFE CRISIS ......................................................................................................................... 129-149

Jean-Philippe Lhernould

NEW PATTERNS OF MIGRATION AND CHALLENGES 

FOR THE FUTURE  ........................................................................................................................................................................ 150-167

Paul Minderhoud 

3

50 years of Social Security Coordination 

Past – Present – Future

TOWARDS NEW RULES FOR THE DETERMINATION 

OF THE LEGISLATION APPLICABLE? ...................................................................................................................................... 168-186

Yves Jorens

COORDINATION OF NEW BENEFITS ...................................................................................................................................... 187-212

Bernhard Spiegel

CROSS-BORDER HEALTHCARE: TOWARDS COORDINATION 

OF TWO PATIENT MOBILITY ROUTES  ................................................................................................................................... 213-236

Jean-Claude Fillon

OVERALL CONCLUDING REMARKS  ....................................................................................................................................... 237-241

Yves Jorens

ANNEXE: SOME PHOTOS OF CONFERENCE PARTICIPANTS ....................................................................................... 242-243

4

PREFACE

Mrs Lenia Samuel,  
Deputy Director-General
European Commission — Employment, Social 
Affairs and Equal Opportunities DG

Today,  7  and  8  May  2009,  we  are  celebrating  the 
50th  Anniversary  of  the  European  Coordination  of 
social Security.

Fifty years is a beautiful age. It immediately makes 
clear  that  we  are  dealing  with  one  of  the  first 
domains the European Union was active in. Indeed, 
the  coordination  regulations  for  migrant  workers 
are indispensable for the free movement of workers, 
one  of  the  basic  principles  of  the  European  Union 
and also one of the most tangible examples of the 
benefits the European Union brings to its citizens.

But  today,  we  are  not  only  celebrating  an  instru-
ment  that  has  reached  a  respectable  age;  we  are 
also  celebrating  the  rebirth  of  this  instrument.  I 
am very pleased to be able to inform you that, two 
weeks  ago,  the  European  Parliament  adopted,  by 
an  overwhelming  majority,  the  two  new  coordi-
nation regulations that will guide us into the next 
decades of European history. In 1998 the European  
Commission  proposed  a  new  framework  for  a 
regulation  on  the  coordination  of  social  security 
schemes.  After  so  many  presidencies  and  discus-
sions in the Council, the European Parliament has 
now, as one of its last important decisions under it 

current  mandate,  adopted  the  regulations  which 
will make the new coordination framework appli-
cable as from 2010.

Indeed, the time was ripe to modernise the instru-
ment  that  is  crucial  for  the  functioning  of  the  free 
movement of workers. In 1958 the free movement 
of  workers  was  necessary  to  guarantee  the  devel-
opment  of  a  free  economic  market.  When  setting 
up  the  European  Economic  Community,  no  social 
standards were introduced, as it was believed that 
these  would  follow  out  of  further  integration  and 
economic growth. To realise this process, the cross-
border  movement  of  workers  was  necessary.  All 
barriers that could limit the development of these 
markets were to be removed.

The introduction of European citizenship by the Maas-
tricht Treaty was a significant step forward in the trans-
formation  from  a  European  Economic  Community, 
with its economic preoccupations, to a political Euro-
pean Union serving the interests of all its citizens.

Free movement is perhaps one of the most impor-
tant  rights  under  Community  law  for  individuals, 
an  essential  element  of  European  citizenship  and 
an  important  instrument  for  achieving  an  efficient 
labour market and high level of employment.

The  European  Commission  is  in  this  respect  very 
happy  that  Belgium  and  Denmark  decided  very 
recently  to  no  longer  apply  the  transitional  meas-
ures for workers from the Member States that joined 
the Union in 2004 and to give them the opportunity 
to fully contribute to the labour market.

But  the  challenges  remain  substantial. We  have  to 
cope  with  an  ageing  society  and  an  increasingly 
flexible  labour  market  in  a  globalising  world.  In 
order to achieve the goals of the Lisbon strategy, the 
European Council decided that one of its important 
guidelines was to improve the matching of labour 
market  needs  by  removing  obstacles  for  workers’ 
mobility  across  Europe  and  by  enabling  a  better 
anticipation of skill needs, labour market shortages 

5

50 years of Social Security Coordination 

Past – Present – Future

and  bottlenecks.  A  large  potential  labour  force  is 
indeed necessary to cope with all these challenges.

Mobility was and is, therefore, still high on the polit-
ical agenda of the European Commission. Already a 
few  years  have  passed  since  the  European Year  of 
Workers’ Mobility took place. In 2007, the Commis-
sion  presented  a  communication  on  ‘Mobility,  an 
instrument for more and better jobs: the European 
job  mobility  action  plan’.  In  this  action  plan,  we 
pointed  out  that  the  coordination  regulations  are 
an  important  instrument  for  promoting  workers’ 
mobility and a successful instrument for achieving 
this  objective.  The  coordination  regulations  form 
one of the key elements for people to exercise their 
right to free movement. By removing the different 
national barriers in the field of social security, these 
instruments guarantee that people moving within 
the  European  Union  will  not  suffer  any  disadvan-
tages in their social security rights. True free move-
ment  is  therefore  not  possible  without  protecting 
the  social  security  rights  of  migrant  workers  and 
members of their families.

As such, the coordination regulations contribute to 
a better functioning of the labour market. The grow-
ingly flexible labour markets with their new forms 
of mobility can make the application of these regu-
lations problematic. Patterns of temporary employ-
ment do pose challenges to the correct application 
of  these  regulations.  The  European  Commission 
will  continue  to  create  the  conditions  that  enable 
increased  mobility.  In  2010,  it  is  envisaged  that  a 
new communication on mobility will be adopted.

Social  security  is  a  fundamental  right  that  should 
be guaranteed; it is an important safety net in this 
time  of  economic  crisis. Thanks  to  the  regulations 
coordinating the various social security schemes of 
Member States, free movement has indeed become 
a tangible, integral part of our European Union and 
identity over the last 50 years. The new regulation 
framework,  becoming  applicable  in  2010,  consti-
tutes  a  further  important  step  for  achieving  this 
fundamental objective of the European Union.

But the process is not finished and challenges may 
still be faced. We will have to work further on that. 
For that reason, we are very happy to have organ-
ised today’s conference, where we will not only look 
back at 50 years of achievements, but also look at 
the challenges of the future. Which lessons can be 
learnt from the past in order to be better armed for 
the challenges of the future?

During  the  last  50  years  the  regulations  went 
through many different reforms, to take stock of 
developments  at  national  and  European  level. 
Several of the presentations today will shed light 
on the origins and positive achievements during 
this  period.  And  we  cannot  overestimate  these 
achievements.  In  fact,  the  coordination  regula-
tions  are  an  instrument  that  work  well  and  I  am 
convinced that the application of the new regu-
lation  will  improve  under  its  new  implement-
ing  regulation,  in  particular  through  closer  and 
more  efficient  cooperation  between  the  institu-
tions. This will be facilitated by the new method 
of exchanging data via electronic means. To this 
end, the Commission has been collaborating very 
closely  with  the  experts  and  institutions  of  the 
Member States.

But, of course, the new regulation does not consti-
tute the end of the dynamic process. In fact, it is our 
common responsibility to continue to monitor the 
developments  which  may  have  an  impact  on  the 
coordination regulations in the future.

Ladies and gentlemen, on 29 April 2009, the Euro-
pean  Commission  organised  in  Brussels  a  meet-
ing  of  the  Director-Generals  of  social  security,  as 
a starting -point for a series of conferences on the 
new regulations. Several conferences will be organ-
ised this year in order to be well prepared for the 
new  framework.  Today’s  conference  has  another, 
but not less important, objective. This conference 
does not aim at looking at the implementation of 
the  new  framework;  it  concerns  the  coordination 
system itself, its limits, its problems, its challenges. 
This conference has one thing in common with all 

6

the other initiatives the European Commission has 
undertaken this year: it contributes to disseminat-
ing information on the coordination system. Cor-
rect  and  understandable  information  is  perhaps 
our  greatest  challenge  today.  Without  it,  citizens 
will not make use of their rights. The Commission 
has  taken  several  initiatives  in  this  respect,  from 
conferences to brochures and a website, and shall 
continue its efforts.

For all these reasons, I am very happy that you are 
all here to celebrate together this important anni-
versary. I am also grateful to notice that the judici-
ary is well represented. In fact, during the last 50 
years,  judges  have  played  an  enormously  impor-
tant role and are one of the driving forces behind 
European integration. I would like to congratulate 
you  on  this  anniversary  and  I  wish  you  all  a  suc-
cessful conference.

7

50 years of Social Security Coordination 

Past – Present – Future

A ShORT  hiSTOR y OF SOCiAL  
SECuRiT y COORdiNATiON

Simon Roberts 
University of Nottingham (UK)

Simon Roberts is Special Lecturer at the Faculty of Social Sciences, Law and Edu-
cation at Nottingham University. Simon Roberts wrote his PhD on social security 
for migrant workers in the European Union and has kept particular interest in 
the subject ever since.

He is the UK expert in the EC’s Observatory on the Free Movement of Workers 
in the European Union. He was also involved in the CONSENSUS III programme. 
For the past 4.5 years, Simon Roberts has been the trESS national expert for the 
United Kingdom. Since 2008, he is also visiting expert at trESS national seminars. 
Simon Roberts is member of the trESS Think Tank. He was recently an expert as-
sisting the European Commission’s European Research Area Group tasked with 
‘Realising a single labour market for researchers’. He is a member of the Editorial 
Board of the European Journal of Social Security.

Simon Roberts is the author of numerous publications on migration, free move-
ment and social security. He is co-author of the Migration and Social Security 
Handbook (“A rights guide for people entering and leaving the UK”). Other pub-
lications include Roberts, S., (2004) ‘A Strong and Legitimate Link’. The Habitual 
Residence Test  in  the  United  Kingdom  in  Langer,  R.,  and  Sakslin,  M.,  eds.  Co-
ordinating  Work-based  and  Residence-based  Social  Security,  Faculty  of  Law, 
University of Helsinki.

I. 

The ComPeTIng PrInCIPleS 
oF TerrITorIalITy and 
Free movemenT

Community  coordination  of  social  security 
is  
50  years  old.  However,  the  history  of  social  coor-
dination can be traced back beyond the European 
Economic Community (EEC) to the beginning of the 
20th century when the first bilateral social security 
agreements  were  negotiated  between  what  are 
now member countries of the European Union (EU). 
The need for coordination can be traced back still 
further  —  to  1648  when  the Treaty  of  Westphalia 
brought  the  Thirty  Years  War  to  an  end (1).  Under 
the terms of the Treaty Bodin’s (2) principle of state 

The Treaty or Peace of Westphalia refers to the Treaties of Munster and 
Osnabruck.

Jean Bodin (1576), Six books of the Commonwealth.

1( ) 

2( ) 

8

sovereignty — that every ‘sovereign’ state’s jurisdic-
tion is unchallengeable within its own frontiers but 
is  limited  to  those  frontiers  by  the  fact  that  other 
states  are  also  sovereign  within  their  own  territo-
ries — was accepted as the foundation of interna-
tional law and behaviour (3).

This principle (4) was to hold sway in Europe for 300 
years until, on 9 May 1950, Robert Schuman, draw-
ing on the ideas of Jean Monnet, proposed setting 
up a common market in coal and steel. The follow-
ing  year  Belgium,  France,  the  Federal  Republic  of 
Germany,  Italy,  Luxembourg  and  the  Netherlands 
signed the Treaty of Paris establishing the European 

3( ) 

4( ) 

Hartmann,  F.  (1978), The  relations  of  nations.  New York,  Macmillan; 
Heater, D. (1990), Citizenship. London, Longman.

For a discussion of the ambiguities inherent in but also the fruitfulness 
of the concept of sovereignty, see Ferrera, M. (2005), The boundaries 
of welfare, Oxford University Press.

Simon Roberts

Coal  and  Steel  Community  (ECSC).  In  1955,  at  a 
meeting in Messina, the foreign ministers of the six 
countries  took  the  decision  to  extend  European 
integration  to  the  economy  as  a  whole  and,  on 
25  March  1957,  the  six  signed  the  Treaties  estab-
lishing the EEC, which came into effect on 1 Janu-
ary  1958 (5). The  establishment  of  the  EEC  marked 
a  new  form  of  political  organisation  in  Europe  as 
the member countries pooled part of the sovereign 
power  that  had  rested  with  the  nation  state  since 
the Treaty of Westphalia.

One of the fundamental principles of the new Euro-
pean  common  market  is  the  free  movement  of 
labour. Article 48 (now 39) (6) of the Treaty of Rome 
provided  for  freedom  of  movement  of  workers  to 
be secured within the Community through the abo-
lition  of  any  discrimination  based  on  nationality 
between workers of the Member States as regards 
employment,  remuneration  and  other  conditions 
of  work  and  employment.  Freedom  of  movement 
entails  the  right,  subject  to  limitations  justified 
on  grounds  of  public  policy,  security  or  health,  to 
accept offers of employment; to move freely within 
the  territory  of  Member  States  for  this  purpose; 
to  stay  in  a  Member  State  to  work  in  accordance 
with the provisions governing the employment of 
nationals  of  that  state;  and,  subject  to  conditions 
contained  in  the  implementing  regulations,  to 
remain in the territory of a Member State after hav-
ing been employed there.

Free movement is of course not a recent phenome-
non. The complex distribution of ethnic and linguis-
tic groupings across western Europe testifies to the 
multitude  of  waves  of  migration  that  has  layered 
the European landscape since the early Iron Age (7). 
More  recently  throughout  the  19th  century  the 
industrialising countries of north-western and cen-
tral  Europe  attracted  workers  from  neighbouring 

5( ) 

6( ) 

7( ) 

http://europa.eu/abc/history/index_en.htm

The  Treaty  of  Amsterdam  changed  the  numbering  of  the  Treaty 
articles so that Article 48 became 39 and Article 51 became 42.

Rokkan,  S.  and  Urwin,  D.  (1983),  Economy,  territory,  and  identity. 
London, Sage.

countries.  The  United  Kingdom  (UK)  was  the  first 
industrial  country  to  have  large-scale  recourse  to 
migrant  labour  from  another  country,  when  hun-
dreds of thousands of Irish peasant farmers crossed 
to  Liverpool  and  Glasgow  following  the  famine  of 
1845–47  to  work  as  labourers,  dockers  and  steel-
workers (8). Later, France drew workers from neigh-
bouring  Italy;  by  1931  there  were  900 000  Italians 
in France; and the German Empire drew in workers 
from central Europe (9).

After the Second World War, and in particular during 
the 1950s, 1960s and early 1970s, western European 
states resumed their pre-war practice of drawing in 
labour  from  other  parts  of  Europe  —  in  particular 
from  the  European  periphery  and  Mediterranean 
basin (10).  Immediately  after  the  Second  World  War 
France resumed recruiting from the poverty-stricken 
south of Italy; West Germany drew workers over the 
border  from  East  Germany  and  also  from  southern 
Italy;  and  the  UK  continued  to  draw  workers  from 
Ireland (11).  From  1954  the  Nordic  Common  Labour 
Market  provided  for  Finnish  migration  to  Sweden, 
while Belgium and the Netherlands, suffering serious 
unemployment  during  the  1950s,  did  not  become 
importers of labour until later in the decade (12).

However,  the  barriers  and  obstacles  that  faced 
migrant workers after the Second World War were 
not the rivers and mountains that had confronted 
early  Iron  Age  women  and  men  but  state  borders 
and, under the concept of state sovereignty, nation 
states may decide who may and who may not cross 

8( ) 

9( ) 

Berger, J. and Mohr, J. (1989), A seventh man. Cambridge, Granta.

Salt,  J., ‘International  labour  migration: The  geographical  pattern  of 
demand’ in Salt, J. and Clout, H. (1976), Migration in post war Europe. 
Oxford,  Oxford  University  Press;  King,  R., ‘The  social  and  economic 
geography  of  labour  migration:  From  guestworkers  to  immigrants’ 
in  Pinder,  D.  (1990)  (ed.),  Western  Europe:  Challenge  and  change. 
London, Belhaven.

10(
) 

Thomas,  E-J.  (ed.)  (1982),  Immigrant  workers  in  Europe:  Their  legal 
status.  Paris,  Unesco;  Castles,  S.  and  Miller,  M.  (1993),  The  age  of 
migration. London, Macmillan.

11(

)  Clout,  H.,  Blacksell,  M.,  King,  R.  and  Pinder,  D.  (eds)  (1989), Western 

Europe: Geographical perspectives. Harlow, Longman.

12(

) 

Smolders,  C.  (1982),  ‘The  status  of  immigrant  workers  in  the 
Netherlands’  in  Thomas,  E-J.  (ed.),  Immigrant  workers  in  Europe: 
Their legal status. Paris, Unesco; Clout, H., Blacksell, M., King, R. and 
Pinder, D. (eds) (1989), Western Europe: Geographical perspectives. 
Harlow, Longman.

9

50 years of Social Security Coordination 

Past – Present – Future

their  territorial  borders  and  the  conditions  under 
which they may do so.

European nation states have expanded their remit 
since  the  Treaty  of  Westphalia  and  from  the  late 
19th century onwards have gradually included the 
provision of welfare to their citizens as part of their 
legitimate  and  legitimising  role.  However,  welfare 
states  have  not  all  evolved  in  the  same  way  but 
have  taken  on  a  variety  of  forms  to  address  the 
risks  associated  with  market  economies (13).  Sev-
eral well-known typologies have been constructed 
around  the  extent  of  the  state’s  role  in  providing 
welfare,  including  Titmuss’  distinction  between 
residual  and  institutional  welfare  states (14)  and 
Esping-Andersen’s  model  of  welfare  based  upon 
the  concepts  of  decommodification,  welfare  mix 
and stratification (15). The welfare states of the 27 EU 
Member States (EU-27) today are hybrids and con-
tain a mix of these principles and elements in differ-
ent measures.

Whatever the mix, welfare entitlements have tradi-
tionally been seen as emanating from within nation 
states  and  bounded  by  national  frontiers,  and  the 
conditions  that  must  now  be  met  by  cross-border 
migrants include the terms of access to the benefits 
and services of the welfare state (16).

Justification  for  placing  territorial  limitations  on 
entitlement  to  the  benefits  of  the  welfare  state  is 

13( ) 

14(
) 

15(
) 

Esping-Andersen,  G.  (1990),  The  three  worlds  of  welfare  capitalism, 
Cambridge, Polity Press; Baldwin, P. (1990), The politics of social solidarity: 
Class  bases  of  the  European  welfare  states  1875-1975,  Cambridge 
University  Press;  Ferrera,  M.  (1996), ‘The  southern  model  of  welfare  in 
social Europe’, Journal of European Social Policy, 1; Arts, W. and Gellissen, J. 
(2002), ‘Three worlds of welfare capitalism or more?’, Journal of European 
Social Policy, 12(2); Hantrais, L. (2004), Family policy matters: Responding 
to family change in Europe, Bristol: Policy Press. 

Titmuss,  R.  (1974),  Social  policy:  An  introduction.  London,  Unwin 
Hyman.

Esping-Andersen,  G.  (1990), The  three  worlds  of  welfare  capitalism. 
Cambridge, Polity Press.

16(

)  Roberts,  S.  and  Bolderson,  H.  (1993),  ‘How  closed  are  welfare 
states?  Migration,  social  security  and  national  frontiers:  Social 
security  provisions  for  non-EU  nationals  in  six  EU  countries’.  Paper 
presented at the Annual Conference of the International Sociological 
Association, September, Oxford; Roberts, S. and Bolderson, H. (1999), 
‘Inside  out:  A  cross  national  study  of  migrants’  disentitlements  to 
social  security  benefits’  in  J.  Clasen  (ed.),  Comparative  social  policy, 
Blackwell; Roberts, S. (2001), ‘Crossing frontiers: Migration and social 
security’,  Ethics,  poverty,  inequality  and  reform  in  social  security, 
Ashgate Publishing.

that  the  solidarity  implicit  in  a  common  tax  and 
public  service  system  is  necessarily  bounded  and 
those boundaries are coterminous with the bound-
aries  of  the  nation  state.  According  to  Coughlan 
it  is  the ‘solidarities  implicit  in  a  common  tax  and 
public service system... underpinned by the demo-
cratic  solidarities  of  the  national  community’  that 
bind  the  nation  state  together.  However, ‘the  soli-
darities that exist within the nation state do not, or 
rarely, exist cross-nationally or between states. It is 
this fact above all that ties the redistributive welfare 
state irrevocably to the national level’ (17).

The  principle  of  territorial  restriction  on  access  to 
welfare  is  as  old  as  the  principle  of  welfare  itself, 
and has not always been aligned with the bound-
aries  of  the  nation  state.  For  example,  in  England 
the Poor Law and Vagrancy Laws of the early 17th 
century  sought  to  control  migration  within  Eng-
land from the countryside to the towns. These laws 
empowered  magistrates  to  deport  back  to  from 
whence  they  came  anyone  coming  to  the  parish 
‘to  inhabit  a  tenement  with  a  yearly  value  of  less 
than  £10  upon  receiving  a  complaint  about  the 
presence  of  such  a  person’.  Parish  officers ‘kept  a 
look-out for those newly arrived in the parish who 
might apply to it for poor relief’(18). These principles 
were transposed into early immigration laws which 
required aliens — who were now defined as people 
from another country rather than from the next vil-
lage — to support themselves.

Today’s welfare states use a mix of immigration rules 
and benefit entitlement conditions to control access 
to  their  benefits (19). The  former  may  allow  entry  to 
the country on condition that (certain) benefits are 
not claimed, while the latter typically include nation-
ality, contribution and residence criteria.

17(

)  Coughlan, A. (1992), ‘The limits of solidarity: Social policy, national and 
international’. Paper given at ‘Fifty years after Beveridge’. Conference 
at University of York, 27–30 September, Vol. 2, York, SPRU.

18(

)  Gorden,  P.  and  Newnham,  A.  (1985),  Passport  to  benefits?  London, 

CPAG.

19(

)  Roberts, S. and Bolderson, H. (1999), ‘Inside out: A cross national study 
of  migrants’  disentitlements  to  social  security  benefits’  in  J.  Clasen 
(ed.), Comparative social policy, Blackwell.

10

Simon Roberts

Benefit entitlement conditions differ between coun-
tries in the extent to which they build in to their ben-
efits the need to have fulfilled contribution conditions 
and/or requirements about nationality, length of resi-
dence in the country or the condition that a person 
should  be  present  when  claiming  a  benefit (20).  Enti-
tlement conditions may therefore hinder those who 
are new to a country or — if there are nationality con-
ditions attached to the benefits themselves — even 
those with long-term residence status.

Different  types  of  benefits  are  typically  controlled 
by different types of criteria. Contributory benefits 
do not contain nationality or residence conditions 
when  consumed  domestically.  In  order  to  meet 
the  contribution  conditions  attached  to  all  con-
tributory benefits it is necessary, however, to have 
worked and been insured in the host state — which 
is where immigration rules may impact on access to 
contributory benefits.

The main obstacles for migrant workers as far as con-
tributory  benefits  are  concerned  lie  in  the  require-
ment  for  a  minimum  number  of  contributions  to 
have been paid in order to qualify for a benefit and 
that  contributory  benefits,  once  earned,  may  not 
be  exportable  or  may  have  conditions  attached  to 
their export. Although there is no discrimination by 
nationality  when  contributory  benefits  are  claimed 
domestically,  there  is,  however,  discrimination  by 
nationality  when  it  comes  to  exporting  them (21). 
Some countries do not allow non-nationals to claim 
some  of  their  contributory  benefits  from  abroad, 
while others pay higher amounts to their own nation-
als who are living abroad.

Many countries attach residence conditions to tax-
financed benefits. It is possible to identify different 
types of residence conditions and several concepts 

20(

)  Roberts,  S.  and  Bolderson,  H.  (1993),  ‘How  closed  are  welfare 
states?  Migration,  social  security  and  national  frontiers:  Social 
security  provisions  for  non-EU  nationals  in  six  EU  countries’.  Paper 
presented at the Annual Conference of the International Sociological 
Association, September, Oxford.

21(

)  Bolderson,  H.  and  Gains,  F.  (1993),  Crossing  national  frontiers:  An 
examination  of  the  arrangements  for  exporting  social  security 
benefits in twelve OECD countries. HMSO.

of ‘residence’ may operate (22). Eligibility to non-con-
tributory benefits may require a past period of resi-
dence or a social link between the paying state and 
the recipient (23). The amount of benefit to which a 
person  is  entitled  may  depend  on  the  number  of 
years he or she has been resident in a country. Hav-
ing established an entitlement a person may not be 
able  to  take  a  benefit  abroad  or  claim  the  benefit 
from  abroad.  The  requirement  to  demonstrate  a 
social link is usually at its strongest with regard to 
assistance benefits and presence is always a condi-
tion  in  European  assistance  schemes.  It  should  be 
noted that there is overlap between these catego-
ries. For instance, a prior period of residence may be 
a persuasive criterion in considering whether some-
one  is  socially  resident.  The  residence  conditions 
may also apply to nationals who return home from 
another country, as well as to non-nationals (24).

II.  orIgInS oF CoordInaTIon 

In The hISTory oF 
bIlaTeral agreemenTS

Disentitlement  to  social  security  consequent  upon 
international  migration  has  been  recognised  as 
a  problem  both  for  social  security  schemes  and 
migrant  workers  since  the  introduction  of  the  first 
insurance schemes in Europe in the latter part of the 
19th century (25). In response, an increasing number 

22(

)  Roberts, S. and Bolderson, H. (1999), ‘Inside out: A cross national study 
of  migrants’  disentitlements  to  social  security  benefits’  in  J.  Clasen 
(ed.), Comparative social policy, Blackwell; Roberts, S. (2001), ‘Crossing 
frontiers: Migration and social security’, Ethics, poverty, inequality and 
reform in social security, Ashgate Publishing.

23(

)  Roberts,  S.  (2004),  ‘A  strong  and  legitimate  link  —  The  habitual 
residence  test  in  the  United  Kingdom.  Co-ordinating  work-based 
and  residence-based  social  security’.  Faculty  of  Law,  University  of 
Helsinki; Cousins, M. (2007), ‘The “right to reside” and social security 
entitlements’, Journal of Social Welfare and Family Law, 29:1.

24(

)  Bolderson,  H.  and  Roberts,  S.  (1997), ‘Social  security  across  national 
frontiers’,  Social  Security  and  Population  Movement.  Journal  of 
International  and  Comparative Welfare,  special  edition, ‘New  global 
development’, Vol. XIII.

25(
) 

Two  excellent  and  seminal  books  on  the  history  of  social  security 
coordination were published within a year or so of each other: Watson, 
P.  (1980),  Social  security  law  of  the  European  Communities.  London, 
Mansell;  and  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the 
European Community. Farnborough, Gower. This section and the next 
draw  on  the  thorough  and  detailed  research  undertaken  by  these 
authors. However, a paper can only skate across the surface of such a 
time span and those who wish to know the detail of the development 
of social security coordination (and enjoy the authors’ analyses) would 
not regret the effort spent tracking down both of these books.

11

50 years of Social Security Coordination 

Past – Present – Future

of  European  countries  have  negotiated  bilateral 
social security agreements to ameliorate these prob-
lems (26).  While  the  history  of  international  social 
security  treaties  goes  back  to  the  beginning  of  the  
20th  century,  international  treaties  affecting  the 
rights of foreigners have a much longer history. Most 
countries in the world are signatories to treaties affec-
ting the status of foreigners in one way or another (27). 
The  history  of  these  treaties  can  be  traced  back  at 
least as far as the 16th century. Early treaties, known 
as ‘capitulations’, established separate legal regimes 
for foreign nationals. During the 17th, 18th and 19th 
centuries, bilateral treaties of friendship, commerce 
and establishment were set up and designed to pro-
tect the interests of individual traders (28).

The  earliest  attempts  made  to  coordinate  social 
security  schemes  across  national  frontiers  con-
cern  compensation  for  accidents  at  work.  In  1904 
France and Italy signed what is generally regarded 
as being the first international social security treaty, 
although an agreement of 1882 and a convention 
of 1897 between France and Belgium can perhaps 
be  thought  of  as  a  precursor  of  bilateral  social 
security agreements in that it made arrangements 
for migrant workers who moved between the two 
countries  to  transfer  their  savings  with  them.  Sav-
ings  can  be  viewed  in  this  context  as  insurance. 
Taking this view, the transference of savings across 
national frontiers may be seen as the forerunner of 
the principle of aggregation of periods of insurance 
that forms one of the pillars of the majority of sub-
sequent bilateral social security agreements (29).

The 1904 Treaty between France and Italy also pro-
vided for transfer of savings between the two coun-
tries. In addition, the Treaty introduced the principle 

26(

)  Roberts, S. (2002), ‘Migration and social security: Parochialism in the 
global village’ in Sigg, R. and Behrendt, C. (eds) (2002), Social security 
in  the  global  village.  International  Social  Security  Series,  Vol.  8, 
Transaction Publishers, New Brunswick.

27(

)  Goodwin-Gill, G. (1985), ‘Immigration, nationality and the standards 
of international law’ in Dummett, A. (ed.), Towards a just immigration 
policy. London, Cobden Trust.

28(
) 

Ibid.

of equal treatment for the nationals of each coun-
try  in  compensation  schemes  for  accidents  at 
work  that  happen  while  in  the  other  country.  For 
instance,  Italians  who  suffered  an  industrial  acci-
dent  in  France  were  covered  by  the  French  indus-
trial  accident  compensation  scheme  on  an  equal 
basis  with  French  nationals  and  vice  versa.  This 
represented a departure from the former principle 
of setting up completely separate legal regimes for 
aliens;  and  it  broke  through  the  territorial  restric-
tions of the national social security systems of the 
two countries to allow people who had suffered an 
industrial accident to export their compensation to 
their home country (30).

The Treaty had further ambitions in that it also envis-
aged the establishment of arrangements between 
the two countries for pensions and unemployment 
benefits (31).  These  clauses  were  premature,  how-
ever,  because,  although  Italy  had  established  an 
embryonic pension scheme through laws passed in 
1898 and 1901, France had not, and neither country 
had  by  then  established  an  unemployment  insur-
ance scheme (32).

It  is  possible  to  see  in  this Treaty  a  wider  political 
context that is often present in international social 
security agreements (33). It was concerned to protect 
and  further  perceived  national  interests.  Specifi-
cally,  it  was  designed  to  solve  a  number  of  prob-
lems  that  had  arisen  not  only  with  social  security 
for migrant workers but also with the different lev-
els of social costs in the two countries. France was 
concerned at the level of imports of cheaper Italian 
goods and had tried unsuccessfully for a number of 
years to encourage Italy to introduce labour condi-
tions similar to those in France, claiming that Italy’s 
ability to undercut French goods was due to poor 

30(

)  Watson, P. (1980), Social security law of the European Communities. 
London, Mansell; Holloway, J. (1981), Social policy harmonisation in 
the European Community. Farnborough, Gower.

31(

)  Watson, P. (1980), Social security law of the European Communities. 

London, Mansell.

32(
) 

Ibid.

29(

)  Watson, P. (1980), Social security law of the European Communities. 
London, Mansell; Nagel, S. and Thalamy, C. (1994), Le droit international 
de la securite sociale. Paris, Presses Universitaires de France.

33(

)  Watson, P. (1980), Social security law of the European Communities. 
London, Mansell; Holloway, J. (1981), Social policy harmonisation in 
the European Community. Farnborough, Gower.

12

Simon Roberts

working  conditions  with  low  investment  in  health 
and safety measures (34). As described above, France 
had  recruited  immigrants  across  the  border  from 
Italy  since  the  latter  part  of  the  19th  century. The 
situation, apart from causing France economic dif-
ficulties,  was  leading  to  hostility  towards  Italians 
working in France. Italy, for its part, was concerned 
to  ensure  that  Italian  workers  were  accepted  in 
France and treated equally with French nationals (35). 
These  issues  would  reappear  during  the  negotia-
tions of the Treaties of Paris and Rome.

The  1904 Treaty  between  Italy  and  France  became 
a  model  for  subsequent  bilateral  social  security 
agreements (36). In 1912 Germany and Italy signed an 
agreement  that  provided  for  equality  of  treatment 
between the two countries, again in compensation 
for  accidents  at  work  for  factory  and  agricultural 
workers (37). The principle adopted in this Treaty was 
once again that of the equal treatment of each coun-
try’s nationals on the territory of the other.

In  1919  another  Franco-Italian  Treaty  went  further 
than  the  earlier  arrangements  for  transferring  sav-
ings  to  introduce  the  principle  of  aggregation  of 
periods  of  insurance  proper:  periods  of  insurance 
paid in one country were counted towards the sat-
isfaction  of  conditions  of  entitlement  to  benefit  in 
the  other (38).  The  principle  of  aggregating  periods 
of  insurance  works  by  allowing  a  migrant  to  add 
together periods of insurance spent in each country 
to qualify for a benefit. A period of insurance might 
be  a  period  of  paid  contributions,  or  in  residence-
based  schemes  a  period  of  residence,  or  the  two 
may  be  added  together.  The  principle  of  aggrega-
tion  has  been  further  extended,  in  some  cases,  to 

34(
) 

Ibid.

35(

)  Watson, P. (1980), Social security law of the European Communities. 
London, Mansell; Nagel, S. and Thalamy, C. (1994), Le droit international 
de la securite sociale. Paris, Presses Universitaires de France.

36(

)  Watson, P. (1980), Social security law of the European Communities. 
London,  Mansell;  Holloway,  J.  (1981),  Social  policy  harmonisation 
in  the  European  Community.  Farnborough,  Gower;  Nagel,  S.  and 
Thalamy, C. (1994), Le droit international de la securite sociale. Paris, 
Presses Universitaires de France.

37(

)  Watson, P. (1980), Social security law of the European Communities. 

London, Mansell.

add together periods of residence in two countries 
in order to qualify for benefits that require the satis-
faction of a prior period of residence condition.

What is significant about these early treaties is that 
they:

•	
•	

•	
•	

were reciprocal;
were confined to nationals and the territories of 
the two countries concerned;
covered only workers;
covered specific benefits.

These principles, either in total or in part, inform all 
later agreements (39).

While several countries negotiated agreements relat-
ing to equality of treatment for work accident ben-
efits after the First World War, it was at first the norm 
for other aspects of social security to be included in 
general labour conventions (Watson, 1980) (40). How-
ever, between the wars the scope of social security 
agreements,  in  terms  of  both  the  people  and  the 
benefits  covered,  gradually  widened  towards  com-
prehensive  agreements  covering  all  benefits (41).  In 
addition to equality of treatment and aggregation of 
periods of insurance the principle of pro-ratarisation 
for long-term benefits was introduced. Often the for-
mulae and calculations involved with pro-ratarisation 
are complicated, but the principle is simple — that 
each of the countries pays a proportion of the pen-
sion determined by the period of insurance spent in 
each. Aggregation is concerned with adding togeth-
er  periods  of  insurance,  residence  and  presence  in 
order to satisfy the qualifications for benefit paid by 
one  or  the  other  of  the  countries.  The  principle  of 
pro-ratarisation  is  applied  to  long-term  benefits  to 
distribute the costs in accordance with the perceived 
responsibility for meeting them.

39(

)  Watson, P. (1980), Social security law of the European Communities. 
London,  Mansell;  Holloway,  J.  (1981),  Social  policy  harmonisation 
in  the  European  Community.  Farnborough,  Gower;  Nagel,  S.  and 
Thalamy, C. (1994), Le droit international de la securite sociale. Paris, 
Presses Universitaires de France. 

40(

)  Watson, P. (1980), Social security law of the European Communities. 

38(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 

Community. Farnborough, Gower.

London, Mansell.

41(
) 

Ibid.

13

50 years of Social Security Coordination 

Past – Present – Future

After the Second World War there was an expansion 
in  international  agreements  affecting  migrants  in 
general  and  social  security  in  particular.  Post-war 
treaties  have  promoted  the  movement  of  groups 
of  migrant  workers,  and  have  focused  on  specific 
issues, such as recruitment, supervision of contracts 
of employment, facilitation of departure and recep-
tion, equal pay with nationals, family reunion, acci-
dents at work, and social security (42).

Most  of  the  expansion  of  bilateral  social  security 
agreements that has taken place since the Second 
World War has happened between European coun-
tries  in  response  to  the  large-scale  intra-European 
labour migration that took place during the 1950s, 
1960s and early 1970s. In the 20 years between 1946 
and  1966,  401  bilateral  agreements  concerning 
social  security  were  signed  worldwide;  in  94  %  of 
these treaties both parties were European (43). These 
post-war  treaties  were  more  sophisticated  than 
their  pre-war  counterparts (44),  but  nevertheless 
were founded on the principles of removing direct 
discrimination through the principle of equal treat-
ment and indirect discrimination through aggrega-
tion  of  insurance  and  the  export  of  benefits,  and 
the  apportionment  of  responsibility  through  the 
determination  of  which  country  should  pay  what 
proportion of the benefit.

III.  orIgInS oF CoordInaTIon 

In The hISTory oF 
mulTIlaTeral agreemenTS

The  growth  in  bilateral  social  security  agreements 
and  treaties  to  protect  migrant  workers  was  stim-
ulated  by  the  International  Labour  Organisation 
(ILO) (45). The  ILO  was  established  in  1919  after  the 
First  World  War  with  a  remit  to  pursue  ‘a  vision 
based on the premise that universal, lasting peace 

42(

)  Dummett, A. (1986), ‘Nationality and immigration status’ in Dummett, 
A. (ed.), Towards a just immigration policy. London, Cobden Trust.

43(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 

Community. Farnborough, Gower.

44(
) 

45(
) 

Ibid.

Ibid.

14

can be established only if it is based upon decent 
treatment of working people’ (46). The ILO works by 
drawing  up  and  monitoring  international  stand-
ards  through  conventions  and  recommendations 
and  plays  an  important  role  in  assisting  member 
countries  to  design  and  implement  social  security 
systems and bilateral social security agreements.

In  its  first  ever  session  in  1919,  the  ILO  drew  up  a 
‘Reciprocity  of  treatment  recommendation’ (47)  and 
six  years  later,  at  its  seventh  session  in  1925,  Con-
vention  No  19  concerning  Equality  of  Treatment 
for National and Foreign Workers as regards Work-
men’s Compensation for Accidents, which provides 
for equal treatment without any conditions of resi-
dence  in  respect  of  workmen’s  compensation  for 
accidents  at  work  that  occur  in  another  ratifying 
member country (48).

Ten years later, in 1935, the ILO drew up the Main-
tenance  of  Migrants’  Pension  Rights  Convention 
(No 48), which provided for equal treatment and 
the maintenance of rights in the course of acqui-
sition  and  of  rights  already  acquired  to  compul-
sory invalidity, old-age and widows’ and orphans’ 
insurance  through  the  aggregation  of  insurance 
periods  of  persons  who  have  been  affiliated  to 
insurance  institutions  of  two  or  more  member 
countries  irrespective  of  their  nationality;  and 
benefits which have already been acquired to be 
paid if they are:

a. 

b. 

resident in the territory of a member, irrespec-
tive of their nationality;
nationals  of  a  member,  irrespective  of  their 
place of residence.

The  convention  also  requires  the  authorities  and 
insurance  institutions  of  each  member  to  give 
assistance to those of other members,

46(

)  http://www.ilo.org

47(
) 

International  Labour  Organisation  (1996), 
International  Labour 
Conventions and Recommendations 1919-1951. International Labour 
Office, Geneva.

48(
) 

Ibid.

Simon Roberts

‘to the same extent as if they were applying their own 
laws and regulations relating to social insurance, and 
more particularly shall, at the request of an institution 
of any Member, carry out the investigations and medi-
cal examinations necessary to determine whether the 
persons in receipt of benefits for which the latter insti-
tution is liable satisfy the conditions for entitlement to 
such benefits’ (49).

Article 20 set up a commission consisting of one del-
egate for each member together with three persons 
appointed respectively by the government, employ-
ers’  and  workers’  representatives.  The  commission 
would regulate its own procedure and, at the request 
of one or more members, would make recommenda-
tions on the application of the convention (50).

Soon  after  the  end  of  the  Second  World  War,  in 
November 1949, the five members of the Brussels 
Pact — Belgium, France, Luxembourg, the Nether-
lands and the UK — signed two multilateral social 
security  agreements  in  Paris.  The  first  was  con-
cerned  with  social  and  medical  assistance,  while 
the  second  aimed  to  link  the  various  agreements 
that  hitherto  had  existed  bilaterally  between  the 
member countries. Belgium, France and Italy, and 
France, Italy and the Saar concluded similar agree-
ments  in  1951  and  1952  respectively (51).  How-
ever,  the  Council  of  Europe’s  ambitions  to  extend 
the  Brussels  Pact  agreement  to  all  its  members 
was  thwarted  by  the  lack  of  bilateral  agreements 
between many of the member countries (52). Pend-
ing the establishment of such a network, the Coun-
cil concluded two interim agreements in December 
1953 — the first in respect of old age, disability and 
death, the second covering the other branches of 
social  security.  The  ILO  also  concluded  a  number 
of  treaties  for  specific  groups  of  workers  such  as 

49(
) 

50(
) 

Ibid.

The  initial  ratifications  of  the  convention  were:  Hungary  and  Spain 
in 1937 and the Netherlands and Poland the following year in 1938. 
(Italy ratified, following the Second World War, in 1952.) Convention 
No 48 was revised by Convention No 157 and is no longer open for 
ratification.

51(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 

Community. Farnborough, Gower.

52(
) 

Ibid.

Rhine  boatmen,  international  transport  workers, 
refugees and stateless persons (53). 

Iv.  The TreaTy oF rome

The  Treaty  of  Rome,  which  established  the  EEC, 
became effective on 1 January 1958. The Treaty pro-
vides  for  free  movement  of  goods,  services,  capital 
and labour. Free movement of labour is intended to 
match supply to demand. From a political perspective, 
Italy, with a persistent unemployment problem, par-
ticularly in the south, was concerned during negotia-
tions to ensure that unemployed workers within the 
EEC were given priority over recruits from outside (54). 
Under the Treaty, migration was reconceptualised as 
free  movement (55).  The  first  transitional  measures 
were adopted in 1961 with Regulation No 15 which 
provided  for  gradually  lifting  immigration  controls 
that provided obstacles to free movement and pro-
tecting  the  position  of  workers  who  were  already 
present  in  the  territory  of  another  Member  State. 
The  second  measure,  Regulation  No  38/64/EEC (56), 
which  was  adopted  three  years  later,  strengthened 
the  rights  of  migrant  workers  who  were  nationals 
of  one  Member  State  and  were  present  in  another, 
while at the end of the transitional period, Regulation 
(EEC) No 1612/68 (57) set out the rules on free move-
ment  of  workers  complemented  by  the  procedural 
requirements in Directive 68/360/EEC (58). Regulation 
(EEC)  No  1612/68  has  been  amended  and  Directive  
68/360/EEC repealed by Directive 2004/38/EC (59).

53(
) 

Ibid.

54(

)  Hantrais, L. (2007), Social policy in the European Union, third edition, 
Basingstoke,  Macmillan;  and  see  Holloway,  J.  (1981),  Social  policy 
harmonisation in the European Community, Farnborough, Gower, for 
an extended discussion of the role of Italy in the negotiations of free 
movement of labour.

55(

)  Guild,  E.  (2006),  ‘More  or  less  migrants:  The  legal  regulation  of 
migration and age in Europe’. Presented to ‘Pensioners on the move’ 
conference, National University Singapore, 5-7 January 2006.

56(

)  Regulation No 38/64/EEC (OJ 62, 17.4.1964).

57(

)  Regulation (EEC) No 1612/68 (OJ L 257, 19.10.1968).

58(

)  Guild,  E.  (2006),  ’More  or  less  migrants:  The  legal  regulation  of 
migration and age in Europe’. Presented to ‘Pensioners on the move’ 
conference, National University Singapore, 5-7 January 2006.

59(

)  Directive 2004/38/EC of the European Parliament and of the Council 
of 29 April 2004 on the right of citizens of the Union and their family 
members to reside and move freely within the territory of the Member 
States.

15

50 years of Social Security Coordination 

Past – Present – Future

The drafters of the Treaty of Rome recognised that 
the different social security systems and the restric-
tions  on  benefit  entitlement  that  they  contained 
could present an obstacle and deterrent to workers 
moving between Member States and be a barrier to 
the right to free movement enshrined in the Treaty. 
They  considered  two  approaches  to  solving  the 
problems of social security. One was to harmonise 
the different social security systems of the member 
countries. The other was to coordinate them.

There are two types of harmonisation (60). One, some-
times referred to as ‘approximation’, seeks to introduce 
a common legal system in a certain field. This type of 
harmonisation  constrains  future  legal  developments 
of  the  national  system.  The  other  type  of  harmoni-
sation  is  achieved  through  the  setting  of  minimum 
standards. Member States may develop their national 
system as they choose as long as they do not fall below 
the minimum standard (61).

Harmonisation  of  the  social  security  systems  was 
included  in  the  Treaty  of  Paris  as  a  compromise 
between  France  and  the  other  member  countries 
over  setting  common  wage  and  social  charges 
throughout  the  ECSC (62).  France  had  reprised  the 
concern  first  expressed  at  the  turn  of  the  century 
when negotiating the first bilateral agreement with 
Italy  to  argue,  during  negotiations  setting  up  the 
ECSC,  that  its  production  costs  were  higher  than 
other member countries’ as the result of favourable 
conditions regarding equal pay for men and wom-
en, holidays and generally higher wage levels. This, 
France  argued,  put  it  at  a  disadvantage  in  a  com-
mon  market.  The  other  negotiating  partners  con-
sidered that harmonising wages and social charges 
was  ‘too  advanced  organisationally  and  imprac-
tical’ (63).  As  a  result  the  Treaty  of  Paris  provided 

60(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 
Community.  Farnborough,  Gower; Watson,  P.  (1980),  Social  security 
law of the European Communities. London, Mansell.

61(
) 

Ibid.

62(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 
Community.  Farnborough,  Gower; Watson,  P.  (1980),  Social  security 
law of the European Communities. London, Mansell.

that wages remained within the jurisdiction of the 
Member States, although the High Authority could 
intervene,  under  certain  conditions  set  out  in  the 
Treaty,  in  the  event  of  abnormally  low  wages  and 
wage reductions (64).

When  the  Treaty  of  Rome  was  being  negotiated, 
France again argued for the inclusion in the Treaty of 
provisions on social harmonisation (65). However, with 
respect  to  social  security  the  drafters  of  the Treaty 
of Rome adopted the more cautious and politically 
more acceptable method of coordination.

Coordination adjusts social security systems in rela-
tion  to  each  other  to  protect  the  entitlements  of 
migrants while leaving the national schemes intact 
in other respects (66).

Article 51 (now 42) of the Treaty provides that:

‘The Council shall, acting in accordance with the pro-
cedure referred to in Article 251, adopt such measures 
in the field of social security as are necessary to pro-
vide  freedom  of  movement  for  workers;  to  this  end, 
it  shall  make  arrangements  to  secure  for  migrant  
workers and their dependants:

a. 

b. 

aggregation,  for  the  purpose  of  acquiring  and 
retaining  the  right  to  benefit  and  of  calculating 
the  amount  of  benefit,  of  all  periods  taken  into 
account under the laws of the several countries;
payment of benefits to persons resident in the ter-
ritories of Member States.’

However,  the  member  countries  guarded  their 
national sovereignty over social security and Arti-
cle  51  also  provided  that  the  Council  shall  act 
unanimously  throughout  the  procedure  referred 
to in Article 251.

64(

)  Watson, P. (1980), Social security law of the European Communities. 
London,  Mansell;  Hantrais,  L.  (2007),  Social  policy  in  the  European 
Union, third edition, Basingstoke, Macmillan.

65(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 

Community. Farnborough, Gower. 

63(

)  Watson, P. (1980), Social security law of the European Communities. 

66(

)  Pennings,  F.  (2003),  Introduction  to  European  social  security  law, 

London, Mansell.

fourth edition, Antwerp, Intersentia.

16

Simon Roberts

The  first  measures  adopted  to  coordinate  social 
security  were  Regulation  No  3  in  1958 (67)  and  its 
implementing  regulation,  Regulation  No  4  (68), 
which became effective on 1 January 1959. The ori-
gins of Regulations Nos 3 and 4 pre-date the Treaty 
of Rome and are to be found in the Treaty of Paris. 
One  of  the  aims  of  this  Treaty  was  to  provide  for 
the  free  movement  of  coal  workers. The  problems 
of  social  security  were  seen  as  an  obstacle  to  this 
aim (69). Article 69(4) of the ECSC Treaty provided:

‘They [the Member States] shall prohibit any discrimina-
tion in remuneration and working conditions between 
nationals  and  immigrant  workers,  without  prejudice 
to  special  measures  concerning  frontier  workers;  in 
particular they shall endeavour to settle among them-
selves any matters remaining to be dealt with in order to 
ensure that social security arrangements do not inhibit 
labour mobility’ (70).

Under  this  provision  the  High  Authority  with  the 
assistance  of  the  ILO  prepared  a  European  Conven-
tion on Social Security. The convention was signed in 
Rome in 1957 but was not ratified because the Treaty 
establishing the EEC intervened (71).

With  only  slight  modification  the  text  of  the  con-
vention  was  adopted  as  Regulation  No  3  by  the 
Council  on  25  September  1958.  The  administra-
tive  arrangements  prepared  for  the  convention 
were adopted as Regulation No 4 on 3 December 
1958. The system was completed by three regula-
tions providing for frontier workers, seasonal work-
ers and seamen who fell outside the provisions of 
Regulation No 3 (72).

67(

)  Regulation No 3 (OJ 30, 16.12.1958).

68(

)  Regulation No 4 (OJ 30, 16.12.1958).

69(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 

Community. Farnborough, Gower. 

70(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 
Community.  Farnborough,  Gower; Watson,  P.  (1980),  Social  security 
law of the European Communities. London, Mansell.

71(

)  Watson, P. (1980), Social security law of the European Communities. 
London, Mansell; Holloway, J. (1981), Social policy harmonisation in 
the European Community. Farnborough, Gower.

72(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 

Regulation  No  3  achieved  coordination  through 
the  principles  developed  in  bilateral  agreements 
described above: namely, equal treatment: discrim-
ination on grounds of nationality is prohibited to 
guarantee that a person residing on the territory of 
a Member State is subject to the same obligations 
and  benefits  from  the  same  rights  as  the  citizens 
of that Member State; rules are laid down to deter-
mine which member country’s legislation the per-
son is subject to; rights in the course of acquisition 
are  protected  through  aggregation  of  periods  of 
insurance, residence or employment spent in each 
of  the  respective  countries  to  establish  a  right  in 
another Member State; and rights already acquired 
are  protected  by  allowing  certain  benefits  to  be 
exported. However, Regulation No 3 took the appli-
cation  of  these  principles  further  than  any  previ-
ous  international  social  security  agreement (73). 
Advances were made in the removal of residence 
restrictions. Regulation No 3 provided, for the first 
time, a general rule — rather than an exception — 
for  the  export  of  certain  benefits (74).  Regulations  
3 and No 4 also required the social security insti-
tutions  of  the  member  countries  to  lend  each 
other  their  good  offices  in  the  administration  of 
the regulations underpinned by the creation of an 
Administrative Commission comprised of a repre-
sentative  from  each  Member  State  with  a  secre-
tariat pro vided by the Commission (75).

What distinguished Regulation No 3 from all previ-
ous bilateral and multilateral agreements is that it 
operated within the institutional framework of the 
European  Economic  Community.  In  1959,  when 
Regulation No 3 became effective, legislative power 
belonged with the Council of Ministers composed 
of  representatives  of  Member  State  governments. 
The Council can only make decisions on the initia-
tive of the Commission.

73(
) 

Ibid.

74(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 
Community.  Farnborough,  Gower; Watson,  P.  (1980),  Social  security 
law of the European Communities. London, Mansell.

Community. Farnborough, Gower.

75(
) 

Ibid.

17

50 years of Social Security Coordination 

Past – Present – Future

The Court of Justice of the European Union (CJ) has 
the  task  of  ensuring  the  uniform  interpretation  of 
EU  law  in  all  Member  States (76).  The  CJ  does  not 
directly rule on individual cases in the field of social 
security. Its judgments are limited to the interpre-
tation of the relevant Community provisions in the 
light of a particular case. This interpretation is bind-
ing, however, on all parties involved (77). The CJ has 
been  fundamental  in  defining  and  extending  the 
scope of social security coordination from the very 
beginning.  Since  1959  the  CJ  has  delivered  over  
600 judgments on the interpretation of the coordi-
nation regulations (78).

v.  early evoluTIon

that had become evident in the earlier regulation, 
some  of  which  had  been  identified  and  others 
created by the CJ (84).

Although many of the Commission’s original propos-
als had been watered down during negotiations in 
the  Council,  further  progress  was  made  to  remove 
residence  restrictions (85).  The  material  scope  was 
extended  to  family  benefits  as  well  as  the  family 
allowances covered under Regulation No 3 and fur-
ther restrictions were removed from sickness benefits 
and healthcare including the number of situations in 
which  authorisation  could  be  refused (86).  The  new 
regulation  also  set  up  the  Advisory  Committee  on 
Social  Security  for  Migrant Workers  while  retaining 
the role of the Administrative Commission (87).

It  soon  became  apparent  that  these  complex  new 
regulations contained a number of faults and omis-
sions  and  the  Commission  started  work  to  revise, 
extend and simplify Regulation No 3 in 1963, just five 
years after it was introduced (79). Three years later the 
Commission submitted a proposal to the Council for 
a new regulation. After long negotiations — which 
one  participant  described  as  ‘Très,  très,  très,  très, 
très  dures’ (80)  and  several  redrafts,  Regulation  (EEC)  
No 1408/71 (81) emerged from the Council on 14 June 
1971 followed by the new implementing regulation, 
Regulation  (EEC)  No  574/72 (82),  in  March  1972. The 
new system became effective on 1 October 1972 (83).

Like  Regulation  No  3  before  it,  Regulation  (EEC)  
No 1408/71 achieves coordination through the four 
main methods that had evolved during the estab-
lishment  of  bilateral  agreements  across  Europe 
during the first half of the 20th century described 
above: discrimination on grounds of nationality is 
prohibited; rules are laid down to determine which 
member country’s legislation the person is subject 
to; rights in the course of acquisition are protected 
through aggregation of periods of insurance and/
or residence spent in each of the respective coun-
tries; and rights already acquired are protected by 
allowing certain benefits to be exported.

Regulation  (EEC)  No  1408/71  is  a  more  sophisti-
cated development of Regulation No 3 that took 
in  to  account  the  gaps  and  technical  problems 

Export/portability  of  benefits  is  provided  by 
Article  10(1)  of  Regulation  (EEC)  No  1408/71, 
which states:

76(

)  Pennings,  F.  (2003),  Introduction  to  European  social  security  law, 

fourth edition Intersentia, Antwerp.

77(
) 

European  Commission:  Directorate-General  for  Employment,  Social 
Affairs and Equal Opportunities (http://ec.europa.eu/social/).

78(
) 

Ibid.

79(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 
Community.  Farnborough,  Gower; Watson,  P.  (1980),  Social  security 
law of the European Communities. London, Mansell.

80(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 

Community. Farnborough, Gower.

81(

)  Regulation (EEC) No 1408/71 (OJ L 149, 5.7.1971).

‘Save  as  otherwise  provided  by  this  regulation,  inva-
lidity,  old  age  or  survivors  cash  benefits,  pensions  for 
accidents at work or occupational diseases and death 
grants  acquired  under  the  legislation  of  one  or  more 

84(
) 

Ibid.

85(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 
Community.  Farnborough,  Gower; Watson,  P.  (1980),  Social  security 
law of the European Communities. London, Mansell.

82(

)  Regulation (EEC) No 574/72 (OJ L 74, 27.3.1972).

86(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 

83(

)  Holloway,  J.  (1981),  Social  policy  harmonisation  in  the  European 

Community. Farnborough, Gower.

Community. Farnborough, Gower.

87(
) 

Ibid.

18

Member  States  shall  not  be  subject  to  any  reduction, 
modification, suspension or withdrawal or confiscation 
by reason of the fact that the recipient resides in the ter-
ritory of a Member State other than that in which the 
institution responsible for payment is situated.’

The  principle  of  portability  is  variable  across  bene-
fits (88).  The  principle  of  territoriality  continues  to 
operate  in  whole  or  in  part  with  regard  to  shorter-
term benefits. Sickness and maternity benefits may 
be exported under certain limited conditions, while 
unemployment  benefits  are  exportable  for  a  maxi-
mum of three months only. Family benefits are pay-
able where members of the family live in a different 
country to that which the ‘worker’ is in. Healthcare is, 
in general, provided by the country of residence, and 
costs are reimbursed by the competent country.

Regulation (EEC) No 1408/71 applies to ‘all legisla-
tion concerning the branches of social security enu-
merated by ILO Convention No 102: (a) sickness and 
maternity benefits; (b) invalidity benefits, including 
those  intended  for  the  maintenance  or  improve-
ment  of  earning  capacity;  (c)  old-age  benefits;  
(d) survivor’s benefits; (e) benefits in respect of acci-
dents at work and occupational diseases; (f ) death 
grants, (g) unemployment benefits; (h) family ben-
efits’ (Article 4(1)).

Its scope did not, however, cover social assistance, 
benefit  schemes  for  victims  of  war  or  its  conse-
quences,  or  special  schemes  for  civil  servants  and 
persons treated as such (Article 4(4)). The material 
scope of the regulation and in particular the ques-
tion  of  what  is  social  security  and  what  is  social 
assistance  has  engaged  citizens,  the  Commission, 
Council,  Parliament  and  the  Member  States  in  an 
ongoing chain of case-law that will be discussed in 
the following section.

88(

)  Cornelissen,  R.  (1996), 

‘The  principle  of  territoriality  and  the 
Community regulations on social security (Regulations 1408/71 and 
574/72)’, Common Market Law Review 33, p. 439.

Simon Roberts

vI.  The Challenge oF a 

dynamIC envIronmenT

The  environment  in  which  Regulation  (EEC)  No 
1408/71 operates has changed in several ways since 
the regulation was designed and negotiated during 
the 1960s.

In  1958  and  1971  there  were  the  six  founder  mem-
bers of the EEC: Belgium, France, West Germany, Italy, 
Luxembourg and the Netherlands. Today there are 27 
members of the EU. With the (partial) exception of the 
Netherlands the original six members shared a similar 
social security system based on the male breadwinner 
model with derived rights for wives and children. The 
accession  of  Denmark,  Finland,  Ireland,  Sweden  and 
the UK introduced a different philosophy — residence-
based systems financed from general taxation (89).

At the same time the nature of migration was chang-
ing.  During  the  1950s,  1960s  and  early  1970s  the 
focus was mainly on male, blue-collar workers who 
took up permanent full-time work and returned to 
their country of origin at the end of their working 
life (90). Today there is much greater diversity with a 
range of different types of migrants including man-
agers, specialists and many more women with some 
workers moving countries frequently (91).

And since the Treaty of Amsterdam, it is not only 
workers who move. As described above, free move-
ment was originally introduced as a fundamental 
economic freedom (European Economic Commu-
nity) and was limited to workers and their families. 
Free movement is now a fundamental freedom of 
European citizenship (92).

89(
) 

90(
) 

Sakslin,  M  (2000),  ‘The  concept  of  residence  and  social  security: 
Reflections  on  Finnish  and  Swedish  and  Community  legislation’. 
European  Journal  of  Migration  and  Law,  Kluwer  Law  International; 
Langer, R. and Sakslin, M. (eds) (2004), Co-ordinating work-based and 
residence-based social security, University of Helsinki.

Jorens, Y., Lhernould, J-P., Fillon, J-C., Roberts, S. and Spiegel, B. (2008), 
‘Towards  a  new  framework  for  applicable  legislation’.  Think  Tank 
Report, Training and reporting on European social security. European 
Commission/Ghent University.

91(
) 

Ibid.

92(

)  White,  R.  (2005),  ‘The  citizen’s  right  to  free  movement’,  European 

Business Law Review.

19

50 years of Social Security Coordination 

Past – Present – Future

The changes to migration in part reflect the chang-
ing  patterns  of  working  life:  female  participation 
rates have increased, there are more part-time and 
temporary jobs; people make increasingly frequent 
transitions from one activity to another, undertake 
retraining and have diverse working biographies.

Changes in the patterns of working life have been 
taking  place  alongside  demographic  and  social 
changes.  There  has  been  a  well-documented 
decline  in  the ‘traditional’  family,  accompanied  by 
an  increase  in  divorce  rates,  unmarried  partners, 
single parents, ‘living apart together’ arrangements 
and  same-sex  relationships (93).  Today,  ‘a-typical’ 
families are the majority in many countries. At the 
same time people are living longer due to increas-
ing  standards  of  living  and  advances  in  medical 
care and a growing number of people are spending 
their last years in a state of dependency.

ment’  rule (94)  and  it  is  questioned  whether  the  lex 
loci laboris rule should be replaced (95), whether the 
principle of insurance under one legislation only is 
still appropriate (96) (it has been suggested that the 
Bosmann  ruling  (C-352/06)  might  herald  the  end 
to the principle of exclusive effect) (97) and whether 
there should be special rules for particular catego-
ries of people (98).

legislation  remain 

While  the  fundamental  principles  for  determin-
ing  the  applicable 
largely 
unchanged — at least for the moment — the origi-
nal principles that underpin the personal and mate-
rial  scope  have  come  under  sustained  pressure 
with developments in the former breaking through 
the  fundamental  principle  of  reciprocity  that  had 
defined all previous coordinating regulations and in 
the latter loosening the fundamental link between 
coordination and work.

These  demographic,  social  and 
labour  market 
changes  have  brought  new  challenges  to  social 
security. Member States responded to ageing pop-
ulations by increasing retirement ages and reform-
ing  pension  systems  to  relieve  pressure  on  public 
pension schemes. New benefits for long-term care 
have been introduced to provide for the new ‘risk’ 
of longevity.

Changes  to  the  gender  balance  in  the  workplace 
and family arrangements also bring new demands 
for social security. The principle of equal treatment 
and  individual  rights  challenges  the  male  bread-
winner model.

These  changes  in  turn  challenge  the  foundations 
upon which coordination is built. It has been argued 
that  the  accession  of  countries  with  residence-
based systems financed from general taxation and 
changing  patterns  of  work  and  mobility  weaken 
the theoretical justification for the ‘State of employ-

93(

)  Roberts, S., Stafford, B., Duffy, D., Ross, J. and Unell, J. (2009), ‘Literature 
review on the impact of family breakdown on children’: A report to 
the European Commission,VT/2007/118.

20

94(

95(

)  Numhauser-Henning,  A.,  ‘Pension  rights  and  the  EC  coordination 
rules on applicable legislation in the light of migration and labour-
market developments’, Report, Theme III, ‘Freedom of movement and 
transfer of social security rights’, VIIth European Regional Congress 
of  Labour  Law  and  Social  Security,  Stockholm,  4–6  September 
2002  (Congress  Proceedings,  50  pages).  Also  in  Blanpain  (ed.), 
‘Collective bargaining, discrimination, social security and European 
integration’, Bulletin of Comparative Labour Relations, Kluwer 2003; 
Jorens,  Y.,  Lhernould,  J-P.,  Fillon,  J-C.,  Roberts,  S.  and  Spiegel,  B. 
(2008), ‘Towards a new framework for applicable legislation’. Think 
Tank  Report,  Training  and  reporting  on  European  social  security. 
European Commission/Ghent University.

)  Christensen,  A.  and  Malmstedt  M.  (2000),  ‘Lex  loci  laboris  versus 
lex  loci  domicilii  —  An  inquiry  into  the  normative  foundations 
of  European  social  security  law’.  European  Journal  of  Social 
Security Vol. 2, Issue 1, 2000; Pennings, F. (2004), ‘Has the state-of-
employment principle become outdated?’ in Langer, R. and Sakslin, 
M.  (eds),  Co-ordinating  work-based  and  residence-based  social 
security, University of Helsinki; Pennings, F. (2005), ‘Co-ordination of 
social  security  on  the  basis  of  the  state-of-employment  principle: 
Time for an alternative?’, Common Market Law Review, 42(1); Jorens, 
Y. and Hajdú, J. (2008), European Report — Training and reporting 
on  European  social  security 
(Tress),  European  Commission/
Ghent  University;  Jorens, Y.,  Lhernould,  J-P.,  Fillon,  J-C.,  Roberts,  S. 
and  Spiegel,  B.  (2008),  ‘Towards  a  new  framework  for  applicable 
legislation’. Think Tank Report, Training and reporting on European 
social  security.  European  Commission/Ghent  University;  Coucheir, 
M.,  Sakslin,  M.,  Giubboni,  S.,  Martinsen,  D.  and  Verschueren,  H. 
(2008), ‘The relationship and interaction between the coordination 
regulations  and  Directive  2004/38/EC’. Think Tank  Report, Training 
and reporting on European social security. European Commission/
Ghent University.

96(
) 

97(
) 

98(
) 

Jorens, Y., Lhernould, J-P., Fillon, J-C., Roberts, S. and Spiegel, B. (2008), 
‘Towards  a  new  framework  for  applicable  legislation’.  Think  Tank 
Report, Training and reporting on European social security. European 
Commission/Ghent University.

Ibid.

ERA  Expert  Group  (2008),  ‘Realising  a  single  labour  market  for 
researchers’. Report of the ERA Expert Group. Directorate-General for 
Research, European Commission, Brussels.

Simon Roberts

Personal scope

Regulation (EEC) No 1408/71 redefined the personal 
scope of Regulation No 3 in response to the broad 
definitions given by the CJ from ‘wage-earners and 
other assimilated workers’ (99) to:

‘employed  persons  who  are  or  have  been  subject  to 
the legislation of one or more Member States and who 
are nationals of one of the Member States or who are 
stateless  persons  or  refugees  residing  within  the  ter-
ritory  of  one  of  the  Member  States,  as  well  as  to  the 
members of their families and their survivors’.

The  personal  scope  has  subsequently  been 
extended  to  include:  self-employed  persons,  in 
1982;  special  schemes  for  civil  servants,  in  1998 
(Regulation  (EC)  No  1606/98) (100);  students,  in 
1999  (Regulation  (EC)  No  307/1999) (101);  and 
nationals  of  third  countries,  in  2003  (Regulation 
(EC) No 859/2003) (102).

The inclusion of third-country nationals within the 
scope  of  coordination  breaks  through  the  funda-
mental principle of reciprocity of all previous coor-
dinating regulations.

Regulation  (EC)  No  859/2003  was  the  culmina-
tion  of  a  lengthy  and  contested  process  (Rob-
erts,  2000) (103).  The  history  can  be  traced  back  to 
the  Green  Paper  of  1993  timed  to  coincide  with 

99(

)  Watson, P. (1980), Social security law of the European Communities. 

London, Mansell.

(

(

(

100

)  Regulation (EC) No 1606/98 (OJ L 209, 25.7.1998, p. 1).

101

)  Regulation (EC) No 307/99 (OJ L 38, 12.2.1999).

102

)  Regulation (EC) No 859/2003 (OJ L 124, 20.5.2003); Pieters, D. (1997), 
‘Enquiry  into  the  legal  foundations  of  a  possible  extension  of 
Community  provisions  on  social  security  to  third-country  nationals 
residing  and/or  working  in  the  European  Union’  in  Schoukens,  P. 
(ed.), Prospects of social security co-ordination, Leuven; Verschueren, 
H.  (1997),  ‘EC  social  security  coordination  excluding  third-country 
nationals:  Still  in  line  with  fundamental  rights  after  the  Gaygusuz 
judgment’,  Common  Market  Law  Review  34,  p.  991;  Jorens,  Y  and 
Schulte,  B.  (1998),  European  social  security  law  and  third-country 
nationals. Brugge: Die Keure la Charte.

(

103

)  Roberts, S. (2000), ‘Our view has not changed: The UK’s response to 
the proposal to extend coordination of social security to third-country 
nationals’, European Journal of Social Security, Vol. 2, Issue 2.

the  ratification  of  the  Maastricht  Treaty (104).  The 
European  Commission  proposed  in  the  subse-
quent White Paper of July 1994 to extend ‘as a first 
step’  healthcare  benefits  under  Regulation  (EEC)  
No  1408/71  to  third-country  nationals  ‘who  are 
legally employed and resident within the Union’ in 
order to begin to address the ‘multiple disadvantag-
es they suffer when staying temporarily in another 
Member State, because they are not covered by the 
coordination provisions’ (105).

The Commission announced its intention to extend 
Article 22 of Regulation (EEC) No 1408/71 in Porto 
in November 1994. At the same time it announced 
its long-term intention to extend the whole of Reg-
ulation (EEC) No 1408/71 to third-country nationals 
who are legally resident in the EU (106).

The proposal was based on Articles 42 (formerly 51)  
and 308 (formerly 235), both of which require una-
nimity.  It  was  therefore  possible  for  one  Member 
State  alone  to  block  a  proposal  under  either  of 
these articles.

When  the  Commission  made  a  formal  submission 
to  the  Council  in  the  Social  Questions  Group  the 
UK  blocked  the  proposal  and  again  when  it  was 
referred up to Coreper (107) in November 1995. As a 
result the proposal was not accepted by the Coun-
cil when it adopted Regulation (EC) No 3095/95 in 
November 1995 (108).

104(

)  European Commission (1993), ‘European social policy: Options for the 

Union’. Green Paper, COM(93) 551. DG V, Brussels.

105(

)  European  Commission  (1994),  ‘European  social  policy  —  A  way 
forward  for  the  Union’.  White  Paper,  COM(94)  333,  27  July,  DG  V, 
Brussels.

106(

)  European  Commission  (1995),  ‘Social  security  in  Europe:  Equality 
between  nationals  and  non-nationals’.  Lisbon,  Departamento  de 
Relacoes Internacionais e Convencoes de Seguranca Social.

107(

)  The Council ‘Social Questions’ Group and the Committee of Permanent 
Representatives (Coreper) are hierarchically arranged Council bodies. 
Issues that are unresolved at ‘Social Questions’ are sent up to Coreper, 
which has the task of preparing Council meetings and must decide 
what  should  be  submitted  for  ministers’  consideration  and  in  what 
form. If there are areas of disagreement that cannot be resolved at the 
level of ‘Social Questions’ the more senior officials at Coreper will try to 
find common ground. If common ground cannot be found, Coreper 
may decide either to submit the proposal to the Council of Ministers 
for its consideration, or refer the matter back to ‘Social Questions’ or 
the European Commission.

108(

)  Regulation  (EC)  No  3095/95  of  22  December  1995  (OJ  L  335, 

30.12.1995).

21

50 years of Social Security Coordination 

Past – Present – Future

On 12 November 1997 the Commission again propo-
sed the extension of Regulation (EEC) No 1408/71 (109)  
and the European Councils of Tampere, Nice, Laeken 
and  Stockholm  urged  that  all  necessary  attention 
be  given  to  extended  social  rights,  including  social 
security rights, to third-country nationals. At Laeken it 
was proposed to shift the legal base from Articles 42 
and 308 to Article 63(4) of the EC Treaty. The UK had 
a special position with regard to Title IV of the Treaty 
and was able to opt-in selectively to (non-Schengen) 
measures under Protocol No 4 (110). Regulation (EC) 
No 859/2003 was agreed on 14 May 2003.

material scope

The  material  scope  is  challenged  by  the  different 
systems  of  new  member  countries  and  new  types 
of  benefits  introduced  by  all  member  countries. 
Because of the limitive list based on ILO Convention 
No 102 the classification of new benefits has some-
times  proved  problematic.  For  example,  there  are 
problems  with  where  to  place  the  long-term  care 
benefits (111).  While  some  countries  consider  these 
benefits  to  be  special  non-contributory  benefits, 
the CJ has found that they are sickness benefits (112), 
although  their  characteristics  require  a  little  Pro-
crustean encouragement to be made to fit in to the 
‘Sickness’ chapter and it is likely that a new chapter 
will  need  to  be  introduced  to  accommodate  this 
type of benefit comfortably.

Social assistance is excluded from coordination. How-
ever, in most member countries social assistance is 
no longer given at the discretion of the butcher, the 

(

109

)  Proposal  for  a  Council  Regulation  (EC)  amending  Regulation  (EEC) 
No  1408/71  as  regards  its  extension  to  nationals  of  third  countries 
(COM(97) 561 final, 12.11.1997).

(

110
) 

Ireland  had  the  same  arrangement  as  the  UK.  Denmark  cannot  be 
selective but can fully opt in to Title IV (TEU Protocol No 5). House of 
Lords Select Committee on European Union  16th Report, 27 March 
2003.

(

111

)  Martinsen, D. (2007), ‘The social policy clash: EU cross-border welfare, 
Union  citizenship  and  national  residence  clauses’,  presented  at 
European  Union  Studies  Association  (EUSA)  Biennial  Conference 
2007 (10th), 17–19 May 2007, Montreal; Jorens, Y. and Hajdú, J. (2008), 
European  Report  —  Training  and  reporting  on  European  social 
security (Tress), European Commission/Ghent University.

(

112
) 

Jorens,  Y.  and  Hajdú,  J.  (2008),  European  Report  —  Training  and 
reporting on European social security (Tress), European Commission/
Ghent University. 

baker and the candlestick maker or local magistrate 
but is increasingly a rule-based entitlement. Further-
more,  many  countries  have  introduced  non-con-
tributory categorical benefits, for example to meet 
the  specific  needs  of  disabled  people,  which  have 
blurred  the  demarcation  lines  between  contribu-
tory  social  insurance  and  non-contributory  social 
assistance  and  straddle  the  traditional  criteria  for 
establishing  entitlement (113).  The  question  of  what 
is  social  assistance  and  therefore  excluded  from 
coordination has been challenged before the courts 
and  the  CJ  gave  a  series  of  judgments  from  Frilli 
(C-1/72) (114)  to  Newton  (C-356/89) (115)  that  brought 
benefits,  whether  or  not  they  were  categorised  as 
social  assistance  by  the  Member  State,  within  the 
coordinating  regulations  if  they  were  entitlement 
based  (Frilli  C-1/72)  and  related  to  one  of  the  con-
tingencies enumerated in Article 4(1) of Regulation 
(EEC)  No  1408/71  (Hoeckx,  C248/83) (116).  However, 
the  CJ  also  established  that  benefits  such  as  the 
guaranteed income for the elderly at dispute in Frilli 
(C-1/72) are only within the scope of the coordina-
tion for ‘employed persons and assimilated persons 
who have completed periods of employment under 
the legislation of a Member State and are resident in 
that state and receiving a pension’ (117).

In Newton (C-356/89) the CJ considered that a ben-
efit, such as the UK mobility allowance in question, 
met  the  necessary  criteria  to  be  within  the  scope 
of  coordination  and  drew  on  Frilli  to  distinguish 
between persons who had been subject to the leg-
islation  of  the  Member  State  where  the  benefit  is 

(

(

(

(

113

)  Pieters, D. (1997), ‘Towards a radical simplification of the social Security 
co-ordination’  in  Schoukens,  P.  (ed.),  Prospects  of  social  security 
co-ordination. Leuven: Uitgeverij Acco cited by Martinsen, D. (2007), 
‘The  social  policy  clash:  EU  cross-border  welfare,  Union  citizenship 
and  national  residence  clauses’,  presented  at  the  European  Union 
Studies  Association  (EUSA)  Biennial  Conference  2007  (10th),  17–19 
May  2007,  Montreal;  Pennings,  F.  (2003),  Introduction  to  European 
social security law, fourth edition, Antwerp, Intersentia.

114

)  Case 1/72 Frilli [1972] ECR I-457.

115

)  Case C-356/89 Stanton Newton [1991] ECR I-3017.

116

)  Case 249/83 Hoeckx [1985] ECR 982; Pennings, F. (2003), Introduction 
to European social security law, fourth edition, Antwerp, Intersentia; 
Martinsen, D. (2007), ‘The social policy clash: EU cross-border welfare, 
Union  citizenship  and  national  residence  clauses’,  presented  at  the 
European Union Studies Association (EUSA) Biennial Conference 2007 
(10th), 17–19 May 2007, Montreal.

(

117

)  Pennings,  F.  (2003),  Introduction  to  European  social  security  law, 

fourth edition, Antwerp, Intersentia.

22

Simon Roberts

Special  non-contributory  benefits  are  not  export-
able. The  CJ  subsequently  confirmed  this  position 
in two UK cases, Snares (C-20/96) (124) and Partridge 
(C-297/97) (125).  However,  the  non-exportability  of 
special  non-contributory  benefits  has  been  chal-
lenged and the CJ has further clarified the demarca-
tion lines between social security, social assistance 
and special non-contributory benefits in a series of 
cases  which  has  eroded  the  content  of  Annex  IIa 
and expanded the content of the category of ‘social 
security’ (126).  The  CJ  found,  in  the  case  of  Jauch 
(C-215/99) (127),  that  for  a  benefit  —  in  this  case  an 
Austrian  care  benefit  (Pflegegeld)  —  to  be  a  non-
exportable  special  non-contributory  benefit  it  is 
not  sufficient  simply  to  be  listed  in  Annex  IIa  but 
the  benefit  must  meet  the  criteria  of ‘special’  and 
‘non-contributory’ (128).  The  point  has  been  reiter-
ated in subsequent cases, for example Leclere and 
Deaconescu  (C-43/99) (129);  Hosse  (C-286/03) (130); 
and Hendrix (C-287/05) (131).

Regulation (EEC) No 1408/71 was amended by Reg-
ulation (EC) No 647/2005 (132) to reflect these judg-
ments. However, in July 2005 the Commission took 
annulment proceedings against the Council of Min-
isters  and  the  European  Parliament (133).  According 
to the Commission, by adopting Regulation (EC) No 
647/2005, the Council and Parliament accepted the 
criteria laid down by the CJ for the coordination of 
special and non-contributory benefits but failed to 

124(

)  Case C-20/96 Snares [1997] ECR I-6057.

125(

)  Case C-297/96 Partridge v Adjudication Officer [1998] ECR I-3467.

126(

)  Martinsen, D. (2007), ‘The social policy clash: EU cross-border welfare, 
Union  citizenship  and  national  residence  clauses’,  presented  at  the 
European  Union  Studies  Association  (EUSA)  Biennial  Conference 
2007 (10th), 17–19 May 2007, Montreal; Jorens, Y. and Hajdú, J. (2008), 
European  Report  —  Training  and  reporting  on  European  social 
security (Tress), European Commission/Ghent University.

127(

)  Case C-215/99 Jauch [2001] ECR I-1901.

128(

)  Fitzpatrick,  P.  (2007), ‘The  right  to  reside  test  and  Regulation  (EEC) 
No  1408/71’.  Presentation  to  Tress  seminar,  London,  20  April  2007; 
Martinsen, D. (2007), ‘The social policy clash: EU cross-border welfare, 
Union  citizenship  and  national  residence  clauses’,  presented  at  the 
European Union Studies Association (EUSA) Biennial Conference 2007 
(10th), 17–19 May 2007, Montreal.

129(

)  Case C-43/99 Leclere [2001] ECR I-4265.

130(

)  Case C-286/03 Hosse [2006] ECR I-1771.

131(

)  Case C-287/05 Hendrix [2007] ECR I-6909.

being claimed and people who have been subject 
to  the  legislation  of  another  Member  State  only, 
with the former entitled and the latter not. The CJ 
reprised its argument in Frilli (C-1/72) that this is a 
necessary condition to protect the stability of sys-
tems  that  provide  benefits  for  disabled  people  on 
condition of residence. This meant that Mr Newton, 
who had not been subject to UK legislation, could 
not export his mobility allowance to France (118).

Nevertheless, the reasoning of the CJ in this series 
of  judgments  had  opened  up  an ‘unintended  and 
unwelcome  development  in  case-law’ (119)  and  on 
30 April 1992, following Newton, the Council adopt-
ed  Regulation  (EEC)  No  1247/92  to  ‘rein-in’  this 
unwelcome development (120). However, this was by 
no  means  a  knee-jerk  reaction,  as  a  proposal  had 
been  presented  by  the  Commission  seven  years 
earlier but had been embroiled in debate within the 
Council (121). It has been suggested that one reason 
for the activity of the CJ has been ‘undue slowness’ 
on the part of the legislature compelling the CJ to 
rule  on  matters  that  should  properly  have  fallen 
within the competence of the Council (122). However, 
on this occasion the CJ’s line of reasoning concen-
trated minds and Regulation (EEC) No 1247/92 cre-
ated  a  new  category  of  ‘special  non-contributory 
benefits’ to coordination, defined as benefits grant-
ed to provide substitute, supplementary and ancil-
lary protection against social contingencies covered 
by the branches referred to in Article 4(1)(a)–(h) or 
intended  solely  for  the  specific  protection  of  disa-
bled people (123). The benefits considered to be spe-
cial non-contributory benefits are agreed between 
the Member State and the legislature and are listed 
in Annex IIa of Regulation (EEC) No 1408/71.

(

118
) 

Ibid.

(

119

)  Martinsen, D. (2007), ‘The social policy clash: EU cross-border welfare, 
Union  citizenship  and  national  residence  clauses’,  presented  at  the 
European Union Studies Association (EUSA) Biennial Conference 2007 
(10th), 17–19 May 2007, Montreal.

(

120
) 

Ibid.

121

)  Pennings,  F.  (2003),  Introduction  to  European  social  security  law, 

fourth edition, Antwerp, Intersentia.

122

)  Sakslin,  M.  (2000),  ‘Social  security  co-ordination  —  Adapting  to 

(

(

(

change’, European Journal of Social Security Vol. 2, Issue 2.

132(

)  Regulation (EC) No 647/2005 (OJ L 117, 2.5.2005).

123

)  Sanchez-Rodas  Navarro,  C.  (1997),  La  aplicacion  del  derecho 
comunitario a las prestaciones especiales no contributivas, Granada. 

133(

)  Case  C-299/05  Commission  v  Council  and  Parliament  [2007]  ECR 

I-8695.

23

50 years of Social Security Coordination 

Past – Present – Future

draw all the consequences of those criteria when it 
included the Finnish childcare allowance, the Swed-
ish disability allowance and care allowance for disa-
bled  children,  and  the  UK  attendance  allowance, 
carer’s allowance and disability living allowance in 
the  list  of  permitted  benefits  set  out  in  Annex  IIa, 
which, in the Commission’s view, did not satisfy the 
criteria  of ‘special’  benefits  within  the  meaning  of 
Article 4(2a) of the regulation (134).

The judgment, which was delivered in October 2007, 
found  that  these  benefits  —  with  the  exception  of 
the  mobility  component  of  the  UK  disability  living 
allowance — are sickness benefits within the mean-
ing of Article 4(1)(a) of Regulation (EEC) No 1408/71 
and therefore wrongly included in Annex IIa — and 
exportable (135).

vII.  modernISaTIon and 
SImPlIFIC aTIon

Regulation  (EEC)  No  1408/71  has  enjoyed  much 
greater  longevity  than  its  predecessor,  Regula-
tion  No  3.  In  response  to  the  continually  evolving 
welfare  systems  of  the  member  countries  and  the 
numerous judgments of the CJ, the regulation has 
been  revised  almost  annually.  However,  ongoing 
revision  has  created  complexity  which  has  in  turn 
given  rise  to  both  operational  and  substantive 
problems,  while  gaps  have  been  exposed  by  the 
changing  demographic,  labour  market  and  social 
arrangements in the member countries.

The modernisation and simplification of coordina-
tion  was  first  proposed  at  the  Edinburgh  Europe-
an  Council  in  1992  to  make  the  regulations ‘more 
efficient  and  user-friendly’  and  to  take  account  of 
these  changed  circumstances.  After  long  discus-
sions, Regulation (EC) No 883/2004 (136) was adopt-

134

)  Case  C-299/05  Commission  v  Council  and  Parliament  [2007]  ECR 
I-8695; Fitzpatrick, P. (2006), ‘Exporting AA, CA and DLA to other EEA 
Member States’. Welfare Rights Bulletin 191, CPAG.

135

)  Roberts,  S.  (2007), ‘UK  Report’, Training  and  reporting  on  European 

social security (Tress), European Commission/Ghent University.

ed by the European Parliament and the Council on 
29 April 2004 and will coordinate social security for 
people  exercising  their  right  to  free  movement  in 
the EU from early spring 2010 (137).

The  route  from  Edinburgh  to  the  threshold  of  the 
new  Regulation  (EC)  No  883/2004  was  difficult 
because,  as  described  above,  the  legal  base  (Arti-
cles 42 and 308 EC) requires unanimity in the Coun-
cil  and,  since  the  Treaty  of  Amsterdam  in  1997, 
co-decision with the European Parliament. In 1998 
the Commission submitted a proposal to modernise 
and simplify the provisions of Regulation (EEC) No 
1408/71  (138).  The  proposal  was  considered  during 
the Finnish, Portuguese, French and Swedish Presi-
dencies, with each submitting a progress report to 
the Council. In general there was not much progress 
to report.

At  the  Stockholm  Council  in  March  2001  it  was 
decided  that  by  the  end  of  the  year  ‘parameters’ 
to  set  the  ground  rules  for  the  modernisation  of 
Regulation  (EEC)  No  1408/71  would  be  agreed  to 
enable the Council and the European Parliament to 
proceed  with  its  adoption. The  parameters,  which 
were  introduced  under  the  Belgian  Presidency, 
were defined as ‘the basic options adopted by the 
Council in the light of which the regulation is to be 
modernised’. The 12 parameters, which highlighted 
points of agreement around which to build consen-
sus,  led  to  considerable  progress  under  the  Presi-
dencies  of  Spain,  Denmark,  Greece  and  Italy,  and 
thereafter.

The  new  regulation  that  emerged  is  not  radically 
different  from  Regulation  (EEC)  No  1408/71.  The 
more  radical  changes  originally  proposed  by  the 
Commission, which included non-limitive material 

(

137

)  At the time of writing, the working date for the entry into effect of 
the new coordinating regulations is 1 March 2010. This is based on 
the  assumption  that  all  the  necessary  legislative  procedures  will 
be completed by the end of June 2009, followed by a three-month 
time  lapse  for  publication  in  the  Official  Journal  and  the  six-month 
transitional  period  provided  for  by  the  regulation  itself.  However,  it 
seems prudent, on this occasion, to follow Amartya Sen’s advice that 
‘it is better to be vaguely right than precisely wrong’.

136

)  Regulation (EC) No 883/2004 (OJ L I66, 30.4.2004).

(

138

)  5133/99 SOC 5 (COM(98) 779 final).

(

(

(

24

Simon Roberts

scope,  open  personal  scope,  extensive  equalisa-
tion  of  facts,  pro-rata  reimbursement  of  pension-
ers’  healthcare  costs,  and  unemployment  benefits 
exportable  for  six  months,  were  watered  down 
as  each  of  the  Member  States  brought  their  own 
concerns,  priorities  and  red  lines  to  the  negotia-
tions,  and  the  main  aim  became  to  simplify  and 
streamline  the  existing  concepts,  rules  and  pro-
cedures  while  maintaining  the  guiding  principles 
and  essential  elements.  Nevertheless,  the  reform 
once  again  extends  both  the  personal  and  mate-
rial  scope  of  coordination,  the  principle  of  equal 
treatment is strengthened, as well as cross-border 
recognition  of  facts  and  the  principle  of  a  sin-
gle  applicable  legislation (139);  there  are  new  rules 
regarding frontier workers, revisions to health and 
family benefits, and the inclusion of paternity ben-
efits,  as  well  as  a  new  chapter  to  partially  coordi-
nate  pre-retirement  benefits.  However,  long-term 
care  benefits  remain  outside  the  scope  of  coordi-
nation  while  the  introduction  of  funded  schemes 
complicates the reform of pensions and the body 
of  case-law  from  Kohll  (C-158/96) (140)  and  Decker 
(C-129/95) (141) to Watts (C-372/04) (142) has not been 
incorporated  but  will  be  addressed  in  a  separate 
directive  on  the  application  of  patients’  rights  in 
cross-border  healthcare (143).  Significantly,  the  new 
regulation  will  extend  the  personal  scope  to  all 
persons,  including  non-economically  active  peo-
ple, who are covered by a scheme.

(

(

(

(

139

)  Cornelissen,  R.,  ‘Regulation  (EC)  883/2004  and  its  implementing 
regulation’. Presentation to the UK Tress seminar, 19 June 2009 (http://
www.tress-network.org/TRESSNEW/).

140

)  Case C-158/96 Kohll [1998] ECR I-1931.

141

)  Case C-120/95 Decker [1998] ECR I-1831.

142

)  Case C-372/04 Watts [2006] ECR I-4325. See Coucheir, M. and Jorens, Y. 
‘Patient mobility in the European Union — The European framework 
in relation to patient mobility’, report written for the European sixth 
framework  project  ‘Europe  for  patients’,  European  Commission, 
Research  DG,  Brussels;  Coucheir,  M.  and  Jorens,  Y.  (2007), ‘Options 
for legal change in the field of patient mobility’, report made for the 
sixth framework project ‘Europe for patients’. European Commission, 
Research  DG,  Brussels;  Martinsen,  D.  and Vrangbæk,  K.  (2008), ‘The 
Europeanisation  of  health  care  governance  —  Implementing  the 
market  imperatives  of  Europe’,  Public  Administration. Vol.  86,  No  1; 
Martinsen,  D.  (2004),  European  institutionalisation  of  social  security 
rights:  A  two  layered  process  of  integration.  PhD  thesis,  Florence, 
European  University  Institute,  cited  by  Ferrera,  M.  (2005),  The 
boundaries of welfare, Oxford University Press. 

New  tools  and  procedures  for  cooperation  are 
provided  in  the  new  implementing  regulation (144), 
which demonstrates the intent of the Council, the 
European  Commission  and  Parliament  to  improve 
service delivery of coordinated benefits. This reflects 
the growing emphasis on service standards across 
the  European  Union (145).  Recital  2  of  the  preamble 
to  the  implementing  regulation  states  that  closer 
and  more  effective  cooperation  between  social 
security  institutions  is  a  key  factor  in  allowing  the 
persons covered by Regulation (EC) No 883/2004 to 
access their rights as quickly as possible and under 
optimum conditions; while Recital 6 states that cer-
tain procedures should be strengthened to ensure 
greater legal certainty and transparency: ‘For exam-
ple, setting common deadlines for fulfilling certain 
obligations  or  completing  certain  administrative 
tasks should assist in clarifying and structuring rela-
tions between insured persons and institutions.’

Article  89(1)  of  the  new  implementing  regulation 
establishes  Community  competence  to  moni-
tor  quality  of  service.  Article  89(1&3)  provides  for 
transparency  tasking  the  Administrative  Commis-
sion with ensuring that the parties concerned are 
aware of their rights and the administrative formal-
ities required in order to assert them. Article 16(3) 
on the legislation applicable, Article 60(3) on fam-
ily benefits and Article 72(2) on recovery of undue 
benefits  contain  provisions  for  default  situations 
to come in to play when processing time-limits are 
not met.

The  scope  to  meet  the  requirements  introduced 
by  Article  89(1)  of  the  implementing  regulation  is 
greatly enhanced by the forthcoming introduction 
of the ‘Electronic exchange of social security infor-
mation’  (EESSI)  in  response  to  Article  4(2).  EESSI 
opens  up  several  possibilities  for  managing  case 
work  and  contains  the  potential  to  collect  a  wide 
range of management information.

144(

)  Michard, H. ‘Modernised EU social security coordination’. Presentation 
to the UK Tress seminar, 19 June 2009 (http://www.tress-network.org/
TRESSNEW/).

(

143
) 

() http://ec.europa.eu/health/ph_overview/co_operation/healthcare/
cross-border_healthcare_en.htm

145(

)  Pollitt,  C.  and  Bouckaert,  G.  (2004),  Public  management  reform:  A 

comparative analysis, second edition. Oxford University Press.

25

50 years of Social Security Coordination 

Past – Present – Future

vIII. ConCluSIonS

The EU coordinating regulations are unique in the 
scale of the ambition and the sophistication of the 
methods to achieve that ambition. Over a period of 
50 years the regulations have expanded and trans-
formed the original principles of coordination that 
were developed during the course of the first half 
of the 20th century. The extension of coordination 
to  nationals  of  third  countries (146)  without  rights 
being granted in return breaks through the funda-
mental principle of reciprocity while the extension 
of  the  personal  scope  to ‘non-active’  people  and 
the  material  scope  to  include  non-contributory 
and  special  non-contributory  benefits  —  and  the 
ongoing  redefinition  of  special  non-contributory 
benefits as ‘social security’ by the CJ — loosens the 
links with the labour market.

Since  the  Treaty  of  Amsterdam  the  aim  must  be 
to  provide  full  coordination  for  all  citizens.  At 
present,  however,  some  citizens  are  more  equal 
than  others  under  the  coordination  regime.  The 
struggle  over  the  material  scope,  although  tech-
nical, is far from abstract. The origins of coordina-
tion in work-related insurance schemes continues 
to  create  a  hierarchy  of  coordination  that  is  not 
neutral  with  regard  to  personal  characteristics. 
Those people who are, or have been, closest to the 
labour market enjoy the greatest degree of coordi-
nation and consequently the greatest opportunity 
to enjoy the right of free movement. Those whose 
biographies do not fully conform to the insurance 
model  may  experience  a  different  coordinating 
regime.  People  who  do  not  have  a  full  insurance 

record  may  need  to  rely  on  social  assistance  or 
special non-contributory benefits which are either 
outside coordination or only partially coordinated. 
This is the case for disabled people who have tra-
ditionally been denied equality in free movement 
by declaring many of the benefits they rely upon 
to be non-exportable by defining them as ‘special 
non-contributory’ and confining them to the hin-
terland of Annex IIa.

Women  are  also  discriminated  against  for  having 
different  biographies  to  those  of  men.  Because 
women are far more likely than men to take on the 
responsibilities  of  unpaid  care  work  in  the  home 
they  are  consequently  more  likely  to  have  frag-
mented  contribution  records  and  need  to  rely  on 
special non-contributory benefits and social assist-
ance (147).  As  a  result  women  are  more  likely  than 
men to be excluded from the benefits of full coor-
dination and consequently less likely to be able to 
enjoy the right to free movement.

The  regulations  allow  Member  States  to  define 
‘family  member’  for  coordination  purposes.  As 
a  consequence  discrimination  against  same-sex 
partners in many EU member countries translates 
to coordination and presents barriers to free move-
ment (148).  Discrimination 
in  member  countries 
includes recognition of same-sex partners’ civil sta-
tus (149). Some countries allow same-sex partners to 
marry;  others  have  same-sex  civil  union/partner-
ship laws; while others do not allow registration of 
same-sex relationships but provide some rights for 
same-sex partners. Some EU member countries do 
not recognise same-sex relationships (150).

(

(

(

147

)  Paskalia, V. (2005), ‘The (in)visibility of gender in the new regulation’, 
European Journal of Social Security, Vol. 7, No 3, September 2005.

148

)  Roberts, S. and Sakslin, M. (2009), ‘Some are more equal than others: 
Discrimination  in  social  security and  the right  of  same-sex partners 
to  free  movement  in  the  EU’,  Journal  of  Poverty  and  Social  Justice, 
special edition, Issue 3, October 2009.

149

)  Ottosson, D. (2006), LGBT World Legal Wrap Up Survey. International 
Lesbian and Gay Association (ILGA); Roberts, S. and Sakslin, M. (2009), 
‘Some  are  more  equal  than  others:  Discrimination  in  social  security 
and  the  right  of  same-sex  partners  to  free  movement  in  the  EU’, 
Journal of Poverty and Social Justice, special edition, Issue 3, October 
2009.

(

150
) 

Ibid.

(

146

)  Article 42 of the Treaty is not the appropriate legal basis to include 
third-country nationals in coordination and another parallel regulation 
will  continue  to  be  needed  —  see  Cornelissen,  R., ‘Regulation  (EC) 
883/2004  and  its  implementing  regulation’.  Presentation  to  the 
UK  Tress  seminar,  19  June  2009  (http://www.tress-network.org/
TRESSNEW/).

26

The most common instances of unequal treatment 
in  relation  to  social  security  relates  to  same-sex 
partners (151).  A  number  of  countries  —  none  of 
which  recognises  same-sex  marriage  —  provide 
specific  benefits  for  married  persons  or  discrimi-
nate in the benefit entitlement conditions between 
married and unmarried partners or between same-
sex and different sex partners (152).

The impact of the interface of the plethora of part-
nership  statuses  and  benefit  entitlement  condi-
tions  across  the  member  countries  means  that 
same-sex  partners  exercising  their  right  of  free 
movement may find their status changing as they 
move between different ‘rights regimes’ to the det-
riment of their entitlement to benefits, and conse-
quently their right to free movement (153).

Arguably  the  most  significant  characteristic  that 
distinguishes EU coordination from all other bilat-
eral  and  multilateral  agreements  is  that  it  takes 
place within the institutional framework of the EU 
with the Council, Parliament, Commission and CJ all 
playing a central role. The CJ has been fundamen-
tal  in  defining  and  extending  the  scope  of  social 
security coordination from the beginning and has 
delivered  over  600  judgments  on  the  interpreta-
tion of the regulations. The CJ is likely to play a cen-
tral role in expanding full coordination to women, 
disabled people and same-sex partners. However, 
according  to  an  undated  note  in  the  archives  of 
the Dutch Ministry of Foreign Affairs, things might 
have been different and the CJ may not have had 
any  role  at  all.  The  Dutch  note  suggests  that  the 

(

151

)  McColgan, A., Niessen, J. and Palmer F. (2006), ‘Comparative analyses 
on national measures to combat discrimination outside employment 
and  occupation:  Mapping  study  on  existing  national  legislative 
measures  —  and  their  impact  in  —  tackling  discrimination  outside 
the  field  of  employment  and  occupation  on  the  grounds  of  sex, 
religion or belief, disability, age and sexual orientation, VT/2005/062’; 
Roberts, S. and Sakslin, M. (2009), ‘Some are more equal than others: 
Discrimination  in  social  security and  the right of  same-sex  partners 
to  free  movement  in  the  EU’,  Journal  of  Poverty  and  Social  Justice, 
special edition, Issue 3, October 2009.

(

152
) 

Ibid.

(

153
) 

Jorens,  Y.  and  Hajdú,  J.  (2008),  European  Report  —  Training  and 
reporting on European social security (Tress), European Commission/
Ghent University; Roberts, S. and Sakslin, M. (2009), ‘Some are more 
equal than others: Discrimination in social security and the right of 
same-sex  partners  to  free  movement  in  the  EU’,  Journal  of  Poverty 
and Social Justice, special edition, Issue 3, October 2009.

Simon Roberts

coordination  of  social  security  was  intended  by 
the original six member countries to take place on 
an intergovernmental basis rather than within the 
Community framework (154).

The  note  observes  that  the  conclusion  of  the 
European  Convention  on  Social  Security  ‘is  likely 
to  make  the  adoption  of  further  measures  on  the 
basis of Article 51 (of the Treaty) redundant’.

It appears that the expectation of the Dutch nego-
tiators  was  that  the  conclusion  of  the  EEC  Treaty 
would  entail  that  the  European  Convention  on 
Social  Security  (of  9  December  1957)  would  con-
tain  the ‘necessary’  measures  in  the  field  of  social 
security for migrant workers, and that it would not 
therefore be necessary to adopt further measures 
on the basis of Article 51.

However, the note continues:

‘On  11  April  a  meeting  took  place  in  Brussels  on  a 
proposal for a regulation of the Council to implement 
Article  51,  in  which  the  provisions  of  the  conven-
tion of 1957 were transformed into a proposal for a 
regulation of the Council. On this completely unpre-
pared  discussion  —  the  papers  were  only  offered  at 
the  meeting  —  the  question  whether  the  Council  is 
competent to adopt a regulation on the basis of Arti-
cle  51  —  the  content  of  which  is  the  convention  of 
9 December 1957 — has not been discussed.’

154(
) 

I am indebted and grateful to Ivo van der Steen, Head of the Centre of 
Expertise  on  European  Law  at  the  Ministry  of  Foreign  Affairs  in  the 
Netherlands, who commented on this paper at the ‘Fiftieth anniversary of 
Community social security coordination’ conference in Prague on 7–8 May 
2009,  for  discovering,  translating  and  interpreting  this  note.  The  note 
(reference 33 4ms6 15) must have been written between 11 April 1958 
(the day a first meeting on social security, organised by the Commission 
of the EEC, took place in Brussels) and 13 May 1958 (the date of a letter 
from the Dutch Minister for Social Affairs to the Dutch Minister for Foreign 
Affairs in which the objections in this note were no longer repeated).

27

50 years of Social Security Coordination 

Past – Present – Future

The note concludes:

‘As  stated  above,  the  position  of  the  Dutch  govern-
ment — and this position was shared by the other par-
ties while preparing Article 51 — is that the conclusion 
of  the  convention  of  9  December  1957  would  make 
further measures on the basis of Article 51 redundant. 
Now  the  reverse  path  is  taken.  It  is  intended  to  set 
aside the ratification of the convention of 9 December 
1957 and to transform the content into a regulation 
of  the  Council  on  the  basis  of  Article  51.  Now,  is  this 
a measure which is necessary for the free movement 
of  migrant  workers?  There  are  no  doubts  about  the 
answer to this question… It is only when the ratifica-
tion of the convention is set aside that the measures 

on the basis of Article 51 are necessary. However, now 
the  situation  is  reversed  and,  against  the  original 
intention, the ratification of the convention is set aside 
to draw the conclusion that the adoption of measures 
on the basis of Article 51 is necessary.’

In bringing the ‘necessary measures’ directly within 
the  scope  of  the  Treaty  of  Rome  through  a  Com-
munity  regulation  the  Commission  was  bringing 
the coordinating legislation within the ambit of the 
Community itself and, as a regulation of the Council, 
within the purview of the CJ. If the views expressed 
in the note had materialised, the history of coordi-
nation might have been an altogether more West-
phalian — and far less dynamic — affair.

28

Sean Van Raepenbusch

ThE  ROLE OF ThE  COuRT  OF JuSTiCE   
iN  ThE  dE vELOP mENT  OF SOCiAL  SECuRiT y 
LAw OF PERSONS mO viNg wiThiN   
ThE  EuROPEAN  uNiON

Sean Van Raepenbusch — 
European Union Civil Service Tribunal judge  
and professor at the European Studies Institute (ULB) (155)

Sean  Van  Raepenbusch  is  a  doctor  of  Laws.  He  is  a  former  official  of  the  
European Commission (Directorate General for Social Affairs and Legal Service). 
Sean Van Raepenbusch was a lecturer in European social law at different Belgian 
Universities.

As of 1994, he works at the Court of Justice where, as of 2005, he is judge at the 
Civil Service Tribunal.

Sean Van Raepenbusch has numerous publications to his name, notably in the 
field  of  European  social  law.  An  example  :  RAEPENBUSCH,  S. VAN, ‘Tendances 
récentes (1998-2003) de la jurisprudence sociale de la Cour de justice des Com-
munautés  européennes’,  Journal  des Tribunaux  du Travail,  2003,  277-284  and 
293-308 (*).

The major contribution made by the Court of Justice 
(CJ) to the construction of ‘social Europe’ need not be 
demonstrated: it is evidenced by reading the numer-
ous judgments in which the Community judge has 
endeavoured  to  interpret  the  texts  in  accordance 
with the idea of social justice and with the require-
ments  of  European  integration  at  the  level  of  the 
people, such that they can evolve general objectives 
from  the  EC  Treaty.  These  judgments  sometimes 
also provide evidence of the difficult arbitration that 
the  judge  ends  up  having  to  perform  between  the 
economic  imperatives  of  the  internal  market  and 
free  competition,  on  the  one  hand,  and  the  social 
objectives  of  the  Treaty,  on  the  other  hand,  while 
taking account of the powers of the Member States 
to develop their social security system and to fix the 
scope of the duty of national solidarity. 

‘on  the 
In  this  regard,  Community 
application  of  social  security  schemes  to  migrant  

legislation 

155(

)  European  Union  Civil  Service  Tribunal  judge  and  Professor  at  the 
European Studies Institute (ULB). The opinions expressed in this study 
are personal.

*( ) 

This contribution was translated from the original French version.

workers’ (156), to return to a formula that is traditional 
but reductive with regard to its genuine scope, offers 
an area of jurisdiction for interpretation by the judge, 
at the same time, due to the complexity, or even the 
esoterism of the applicable texts, in constant evolu-
tion, but equally because of the fundamental objec-
tive which this regulation intends to achieve, namely 
the  free  movement  of  people  within  the  European 
Union, and the fundamental principles which encom-
pass it, in particular the principle of equal treatment, 
the right of access to social security benefits and to 
social services, or to health protection.

Some  figures  permit  measurement  of  the  scope 
of  the  dialogue  which  has  arisen  over  the  years 
between the CJ and national courts with regard to 
the interpretation of Regulations (EEC) Nos 1408/71 

156(

)  Council  Regulation  (EEC)  No  1408/71  of  14  June  1971  on  the 
application of social security schemes to employed persons, to self-
employed persons and to members of their families moving within 
the  Community  and  its  implementing  Regulation  (EEC)  No  574/72, 
amended  numerous  times,  as  amended  and  updated  by  Council 
Regulation (EC) No 118/97 of 2 December 1996 (OJ L 28, 30.1.1997, 
p. 1), itself amended several times, most recently by Regulation (EC) 
No 592/2008 (regarding the annexes to Regulation (EEC) No 1408/71) 
and  Regulation  (EC)  No  120/2009  (regarding  the  annexes  to 
Regulation (EEC) No 574/72).

29

50 years of Social Security Coordination 

Past – Present – Future

and 574/72 (and formerly Regulation Nos 3 and 4): 
out  of  a  total  of  5  055  judgments  pronounced  by 
the CJ, on 31 March 2009, in a reference for a pre-
liminary  ruling,  509  judgments  concern  the  social 
security  of  migrant  workers,  that  is  to  say,  almost 
1 in 10 judgments. The proportion was even in the 
region of a fifth, on 1 January 1980 (122 preliminary 
rulings  out  of  a  total  of  599),  before  the  consider-
able extension of Community jurisdiction after the 
entry  into  force  of  the  Single  European  Act  and, 
above all, of the Maastricht Treaty.

It  is  useful,  on  the  eve  of  the  entry  into  force  of 
Regulation (EC) No 883/2004 of the European Par-
liament and of the Council of 29 April 2004 on the 
coordination of social security systems (157) (follow-
ing  the  imminent  adoption  of  its  implementation 
regulation),  to  try  to  draw  the  most  valuable  les-
sons  from  the  case-law  of  the  CJ  of  these  recent 
decades,  with  regard  to  both  the  field  of  applica-
tion (material and personnel) of the regulation and 
its links with international bilateral conventions (I) 
and the governing principles of Community coordi-
nation of national social security arrangements (158) 
(II). Our ambition is obviously not to be exhaustive, 
but to illustrate the influence of the interpretation 
of the texts, in the light of the objectives of the Trea-
ty, on the strengthening of the social protection of 
persons having exercised their right to freedom of 
movement within the European Union.

I. 

The FIeld oF aPPlICaTIon 
oF CommunITy legISlaTIon

a.  The notion of social security benefit

The CJ has always retained an extensive conception 
of the notion of social security, within the meaning 
of  Regulation  (EEC)  No  1408/71,  in  order  to  bring 

157(

)  OJ L 166, 30.4.2004, p. 1.

158(

)  Namely, the principles of equal treatment, the rule that the legislation 
of a single Member State is to apply (as a general rule, lex loci laboris), 
the  preservation  of  immediate  entitlement  (by  the  ‘export’  of 
services), the preservation of prospective entitlement (by techniques 
of aggregation of periods of insurance, employment or residence and 
pro-rata provision of services) and, finally, of sincere cooperation.

about  the  most  favourable  conditions  for  the  free 
movement  of  workers.  Indeed,  this  complies  with 
the evolutionary, even ‘attractive’ content of social 
security,  according  to  the  Advocate  General  M. 
Mayras (159), who over and above measures curative 
in themselves, after the emergence of a social risk, 
evidently  recognised  the  function  of  risk  preven-
tion and, over and above improving the standard of 
living, that of improving the quality of life, or even 
promoting a certain employment policy.

According  to  established  case-law,  a  benefit  must 
be considered as a social security benefit, on the one 
hand, if it is granted to beneficiaries, apart from any 
individual  and  discretionary  appreciation  of  their 
personal requirements, based on a legally defined 
situation  and,  on  the  other  hand,  if  it  is  linked  to 
one  of  the  social  risks  enumerated  expressly  in 
Article 4(1), of Regulation (EEC) No 1408/71, which 
correspond  to  the  traditional  branches  of  social 
security  listed  in  International  Labour  Convention 
No  102  (see,  for  example,  Case  C-249/83  Hoeckx 
[1985] ECR I-973, paragraphs 12 to 14; Case C-78/91 
Hughes [1992] ECR I-4839, para. 15; Case C-332/05 
Cellozzi  [2007]  ECR  I-563,  para.  17;  Case  C-212/06 
Government  of  the  French  Community  and  Walloon 
Government  [2008]  not  yet  published  in  the  ECR, 
para. 17; and Case C-228/07 Petersen [2008] not yet 
published in the ECR, para. 19).

The  following  have  thus  been  considered  as  social 
security benefits within the meaning of the regulation:

•	

•	

benefits  in  kind  for  persons  in  need  of  long-
term care (‘home care’), aimed at improving the 
state of health and quality of life of dependent 
persons, considered by the CJ as sickness ben-
efits (Case C-160/96 Molenaar [1998] ECR I-843, 
and Case C-215/99 Jauch [2001] ECR I-1901);
advances  on  maintenance  payments,  intended 
to  offset  the  damage  resulting  from  non-pay-
ment  of  maintenance  by  one  of  the  parents, 

(

159

)  Expression  borrowed  from  French  administrative  case-law  with 
regard to the concept of ‘public employment’. Cf. the conclusions of 
Advocate General Mayras in Case 1/72 Frilli [1972] ECR I-457.

30

Sean Van Raepenbusch

considered  by  the  CJ  as  family  benefits  (Case 
C-85/99 Offermanns [2001] ECR I-2261 and Case 
C-302/02  Laurin  Effing  [2005]  ECR  I-553).  Con-
sequently,  people  residing  in  the  territory  of  a 
Member State to which the provisions of this reg-
ulation are applicable shall be granted the use of 
such a benefit provided for by the legislation of 
this state under the same conditions as nation-
als of that country, in accordance with Article 3 
of the said regulation (in this case, the children 
of  divorced  parents,  of  German  nationality  and 
residing  in  Austria,  had  requested,  due  to  the 
father’s insolvency, an advance of a maintenance 
payment and were refused the provision of this 
advance by virtue of their nationality) (160);
the holiday pay accorded to the beneficiary of 
a retirement pension (Case C-101/04 Noteboom 
[2005] ECR I-771);
the  allowance  to  workers  exposed  to  asbes-
tos,  related  to  the  branch ‘benefits  in  respect 
of accidents at work and occupational disease’ 
(Case C-205/05 Nemec [2006] ECR I-10745);
the  advance  paid  to  unemployed  invalidity 
benefit claimants in the expectation of a defini-
tive decision on the granting of such a benefit, 
such  an  advance  having  been  linked  to  the 
‘unemployment’  branch  (Petersen  judgment, 
abovementioned);
thus, in general, mixed non-contributory benefits, 
those ‘border’ benefits resulting from the progres-
sive integration, established in national legislation, 
of assistance in social security (161), and with regard 
to  which  the  CJ  has  fixed  delimitation  criteria  of 
Community  legislation,  without  which  it  would 
have  permitted  a  quasi  unlimited  expansion  of 
social  security  within  the  meaning  of  Commu-
nity law. This last case-law has led the Council to 

•	

•	

•	

•	

(

160
) 

It  will  be  observed  that  Article  1(z)  of  Regulation  (EC)  No  883/2004 
excludes  advances  on  maintenance  payments  from  the  concept  of 
family benefit within the meaning of the said regulation.

(

161

)  For  example,  allowances  for  the  handicapped  (Case  63/76  Inzirillo 
[1976] ECR I-2057; Case 39/74 Costa [1974] ECR I-1251; Case C-356/89 
Stanton Newton [1991] ECR I-3017), income for the elderly (Case 1/72 
Frilli [1972] ECR I-457; Case 24/74 Biason [1974] ECR 999; Case 139/82 
Piscitello  [1983]  ECR  I-1427),  certain  benefits  granted  to  certain 
unemployed  persons  (Case  C-66/92  Acciardi  [1993]  ECR  I-4567), 
maternity benefits (Case C-111/91 Commission v Luxembourg [1993] 
ECR I-840).

introduce particular rules of coordination in Regu-
lation (EEC) No 1408/71 concerning this category 
of benefits (162) which, when they are mentioned in 
an Annex IIa of the said regulation, are forthwith 
provided  exclusively  on  the  territory  of  the  state 
of residence and under the legislation of this state, 
without the possibility of export, adding together, 
if  necessary,  the  periods  of  employment,  profes-
sional activity or residence completed in any other 
Member State (Article 10a) (163).

b.  Community concept of the notion  

of worker

According  to  former  case-law,  inaugurated  by  the 
Unger  judgment (164),  the  concept  of  worker  does 
not  come  within  the  national  law  of  the  Member 
States,  but  within  Community  law  and  likewise 
demands a broad interpretation taking account of 
the objective of Article 42 EC.

Thus, it very quickly appeared to the CJ that it would 
not be in accordance with the spirit of Community 
legislation  to  limit  the  concept  of  worker  only  to 
migrant workers stricto sensu called upon to relocate 
to perform their job, but that it should comprise, in 
a general manner, those who are staying on the ter-
ritory  of  another  Member  State,  whatever  the  rea-
son for their relocation (165), as well as those who are 
placed  in  one  of  the  situations  of  an  international 
nature envisaged by the regulation. The absence of 

162(

)  Regulation  (EEC)  No  1247/92  of  30  April  1992  (OJ  L  136,  19.5.1992, 

p. 28).

163(

)  This  derogation  to  the  principle  of  exportability  of  social  security 
benefits having to be applied restrictively, it may not be applied to 
benefits  conforming  to  the  conditions  laid  down  in  Article  4,  para. 
2a,  of  Regulation  (EEC)  No  1408/71,  that  is  to  say  those  of  both  a 
special  and  non-contributory  character,  which  has  given  rise  to  a 
new  case-law  on  the  appraisal  of  the  genuinely  special  and  non-
contributory  character  of  certain  benefits  mentioned  in  Annex  IIa 
(see Case C-160/96 Molenaar [1998] ECR I-843, with regard to Austrian 
dependent  allowances,  and  Case  C-43/99  Leclere  and  Deaconesco 
[2001] ECR I-4265, with regard to Luxembourg maternity allowances, 
considered by the CJ as having been mentioned in error in Annex IIa). 
Article  4(2a)  of  Regulation  (EEC)  No  1408/71  was  modified  in  2005 
(Regulation  (EC)  No  647/2005,  OJ  L  117,  4.5.2005  p.  1)  in  order  to 
define ‘special non-contributory cash benefits’ more precisely.

164(

)  Case  75/63  Mrs  M.  K.  H.  Hoekstra  (née  Unger)  v  Bestuur  der 
Bedrijfsvereniging  voor  Detailhandel  en  Ambachten  [1964]  ECR 
I-349.

165(

)  Unger  judgment,  abovementioned,  ECR  I-366,  and  Case  31/64 

Bertholet [1965] ECR I-111, 119.

31

50 years of Social Security Coordination 

Past – Present – Future

any connection ‘with genuine migrations’ has had the 
effect  of  blurring  the  distinction  between  migrant 
workers  and  permanently  settled  workers  and  of 
provoking an overlapping of the personal sphere of 
the regulations of the strict framework of Articles 48 
to 51 of the Treaty (now Articles 39 EC to 42 EC) rela-
tive to the freedom of movement of workers.

In reality, the personal field of application of Regu-
lation (EEC) No 1408/71 is determined, regardless of 
the qualification given by national employment law 
or  reasons  for  moving  from  one  Member  State  to 
another, by a social security criterion, that dealing 
with the applicable legislation. This is furthermore 
one of the paradoxes of determining the personal 
field  of  application  of  the  regulation:  although  it 
is based on the existence of an actual Community 
concept,  an  examination  of  the  applicable  provi-
sions of national law is inevitable.

In  Case  75/63  Unger,  abovementioned,  the  CJ 
judged  that  the  concept ‘wage-earners  or  assimi-
lated  workers’,  within  the  meaning  of  Article  4  of 
Regulation  No  3,  refers  to ‘all  those  who,  as  such 
and  under  whatever  description,  are  covered  by 
the different national systems of social security’ (166). 
In  other  words,  it  is  the  link  with  a  social  security 
scheme for wage-earners which ‘anchors’ the Com-
munity national to Regulation No 3.

The Unger case-law, which in large measure disregard-
ed  the  objectives  of  the  authors  of  Regulation  No  3 
(on account of the extension of the sphere of persons 
protected to practically all those insured under social 
security schemes for wage-earners of the Community, 
without a link with migration being required), was cod-
ified by Regulation (EEC) No 1408/71, of which Article 
1(a) defines the worker, employed or self-employed, 
by sole reference to the social security scheme which 
covers him. In this the case-law of the CJ in the field 
of  social  security  foreshadowed,  almost  30  years  in 
advance,  the  establishment  of  European  citizenship 
and the associated rights, dealt with below.

(

166

)  See also Case 19/68 De Cicco [1968] ECR I-689, p. 700, and Case 23/73 

Janssen [1971] ECR I-859, para. 7.

C.  The implications of European  

citizenship

We know that, since the Maastricht Treaty entered 
into force, the right to move and reside freely in any 
Member State has been conferred on the citizens of 
the European Union in Article 18 EC, independently 
of any economic activity (‘subject to the limitations 
and  conditions  laid  down  in  the Treaty  and  to  the 
measures adopted to give it effect’) (167). This impor-
tant reform has not failed to reflect on the interpre-
tation of Regulation (EEC) No 1408/71, as testified 
to by Case CECR I-10409 (168).

Therein,  Ms  Ursula  Elsen,  a  German  national,  born 
in 1951, resided in France from 1981. Until in March 
1985, in the capacity of frontier worker, she engaged 
in an occupation subject to compulsory insurance, 
with an interruption between July 1984 and Febru-
ary  1985  on  grounds  of  maternity  leave  following 
the  birth  of  her  son.  Since  then,  Ms  Elsen  has  not 
been in employment subject to compulsory insur-
ance, either in Germany or in France.

The claim for validation of the periods when she was 
bringing up her son has been rejected by the Ger-
man institution having jurisdiction on the grounds 
that the child was brought up abroad.

It  therefore  appears  that  Ms  Elsen  has  never 
worked  anywhere  but  Germany,  her  country  of 
origin,  although  having  transferred  her  place  of 
residence  to  France  and  having  thus  continued 
to work in Germany for some time in the capacity 
of  frontier  worker  before  ceasing  all  professional 

(

167

)  Reference is made to the restrictions contained in Directive 2004/38/
EC of the European Parliament and of the Council of 29 April 2004 on 
the right of citizens of the Union and their family members to move 
and reside freely within the territory of the Member States (OJ L 229, 
29.6.2004, p. 35), repealing those of the three former directives relating 
to the right of residence of pensioners, inactive persons and students 
(Directives  90/364/EEC  and  90/365/EEC,  OJ  L  180,  13.7.1990,  pp.  26 
and 28, and Directive 93/96/EEC, OJ L 317, 18.12.1993, p. 59), which 
make the right of residence subject in particular to the condition of 
disposing of means of support of such a nature that beneficiaries of 
the right of residence must not become an ‘unreasonable’ burden on 
public finance.

(

168

)  Cf. our study ‘Le champ d’application personnel du règlement (CEE) 
No 1408/71 et la citoyenneté européenne: du travailleur migrant au 
citoyen européen’, Journal des Tribunaux du Travail., 1997, p. 1.

32

Sean Van Raepenbusch

occupation  on  the  birth  of  her  child  in  order  to 
bring him up.

Let that be no objection! The CJ referred to former 
Articles 8a, 48 and 51 of the Treaty (now Articles 18, 
39 and 42 EC) to consider that these articles ‘require 
that, for the purpose of the grant of an old-age pen-
sion, the competent institution of a Member State 
take  into  account,  as  though  they  had  been  com-
pleted in the national territory, periods devoted to 
child-rearing  completed  in  another  Member  State 
by  a  person  who,  at  the  time  when  the  child  was 
born,  was  a  frontier  worker  employed  in  the  terri-
tory  of  the  first  Member  State  and  residing  in  the 
territory of the second Member State’.

The CJ reached this conclusion after having estab-
lished that German legislation was indeed applica-
ble  to  the  situation  of  a  worker  who  has  stopped 
all  professional  activity  in  Germany  and  who  is 
resident  in  the  territory  of  another  Member  State, 
as regards taking into account periods devoted to 
bringing up a child born when the parent was still 
working  in  Germany  in  the  capacity  of  a  frontier 
worker. According to the CJ, due to this last circum-
stance ‘a close link can be established between the 
periods of child-rearing concerned and the periods 
of  insurance  completed  in  Germany  by  virtue  of 
her occupational activity in that state. It is precisely 
because she had completed the latter periods that 
Ms Elsen requested the German institution to take 
into  account  the  subsequent  periods  devoted  to 
rearing her child’ (para. 26).

The applicability of German legislation having been 
thus  established,  the  CJ  judged  that  the  national 
provisions which in this case prevented the valida-
tion of child-rearing periods completed in another 
Member  State  were  of  a  nature  to  be  disadvanta-
geous to ‘Community nationals who have exercised 
their  right  to  move  and  reside  freely  in  the  Mem-
ber  States,  as  guaranteed  in  Article  8a  of  the  EC 
Treaty’ (para. 34). And ‘furthermore, Regulation No 
1408/71  itself,  which  was  adopted  on  the  basis, 
inter alia, of Article 51 of the EC Treaty (now, after 

amendment,  Article  42  EC),  contains  a  number  of 
provisions  designed  to  ensure  that  social  security 
benefits are payable by the competent state, even 
where  the  insured,  who  has  worked  exclusively  in 
his  state  of  origin,  resides  in  or  transfers  his  resi-
dence  to  another  Member  State. Those  provisions 
undoubtedly help to ensure freedom of movement 
not only for workers, under Article 48 of the EC Trea-
ty (now, after amendment, Article 39 EC), but also 
for  citizens  of  the  Union,  within  the  Community, 
under Article 8a of the Treaty’ (point 35).

It thus appeared clearly that, under the impulse of 
the CJ, Regulations (EEC) Nos 1408/71 and 574/72 
have also become instruments intended to guaran-
tee  the  right  of  European  citizens  to  move  and  to 
reside freely within the European Union, independ-
ently of the exercise of any economic activity.

d.  Relationships between Community 

legislation and bilateral social security 
conventions

Conflicts between the regulations and social security 
conventions concluded between Member states

In principle, in accordance with Article 6 of Regulation 
(EEC) No 1408/71, this supersedes the previous social 
security  agreements  concluded  exclusively  between 
two or more Member States (letter a) and those con-
cluded between at least two Member States and one 
or more third countries insofar as, in this last hypoth-
esis, cases in the regulation are involved in which no 
institution of one of the third countries is called upon 
to intervene (letter b) (169). However, a series of interna-
tional instruments have been kept in force by virtue 
of Article 7 of the regulation and can thus continue to 
produce their effects in full with regard to all the situ-
ations to which they refer (170).

169(
) 

In  the  same  sense,  the  enforcement  regulation  is  substituted,  in 
accordance with Article 5 of the same regulation, for arrangements 
relating  to  the  application  of  agreements  referring  to  Article  6  of 
Regulation (EEC) No 1408/71.

170(

)  Article  5  of  Regulation  (EEC)  No  574/72  also  provides  that  the 
implementing provisions of several bilateral agreements referred to 
in Annex 5 of the same regulation are kept in force.

33

50 years of Social Security Coordination 

Past – Present – Future

Apart from these cases, the keeping in force of an 
agreement  between  Member  States  incompatible 
with Community law might be considered as con-
stituting  a  failure  of  the  obligation  of  loyalty  laid 
down in Article 10 EC (171).

It was established, until the pronouncement of the 
Rönfeldt  judgment (172),  in  accordance  with  what 
has  just  been  disclosed,  that  the  simple  fact  that 
a social security agreement is more advantageous 
for a migrant worker than the provisions of Regula-
tion (EEC) No 1408/71 does not suffice to justify the 
exception to the rule of the same. The relevant pro-
visions of the agreement under consideration had 
still be mentioned in Annex III (see Article 7).

It  was  thus  judged  in  Case  C-82/72  Walder (173),  with 
regard  to  Articles  5  and  6  of  Regulation  No  3,  which 
contain provisions similar to those of Articles 6 and 7 of 
Regulation (EEC) No 1408/71, ‘that it is clear from these 
provisions  that  the  principle  that  the  provisions  of 
social security conventions concluded between Mem-
ber States are replaced by Regulation No 3 is manda-
tory in nature and does not allow of exceptions save for 
the cases expressly stipulated by the regulation’.

In the first analysis, the Rönfeldt judgment seems to 
have rescinded this analysis, embodying the principle 
implied by the CJ in its Petroni judgment (174): if Article 
51  of  the Treaty  empowers  and  obliges  the  Council 
to  confer  rights  on  migrant  workers,  while  different 
social security schemes exist, it does not permit it to 
make rules which deprive workers of rights to which 
they  are  entitled  by  national  law.  Recourse,  in  the 
Rönfeldt  case,  to  the  principle  of  the  inviolability  of 
the rights acquired on the basis of the single nation-
al  legislation  of  a  Member  State,  independently  of 
Community law, required that the CJ treat the rights 
acquired by single national legislation similarly to the 
rights  acquired  under  an  international  convention 
integrated into this national legislation.

171(

)  Case 235/87 Matteucci [1988] ECR I-5589, para. 19.

172(

)  Case C-227/89 [1991] ECR I-323.

173(
) 

Judgment of 7 June 1973, ECR I-599.

174(

)  Case 24/75 Petroni [1975] ECR 1149.

34

The  Rönfeldt  judgment  caused  a  certain  amount 
of  commotion  in  specialised  environments.  Some 
were disappointed that the CJ had deviated, in this 
case, from the simple, quasi automatic and impera-
tive  rule  of  the effect of substitution  of  Community 
law on social security conventions, in favour of rea-
soning judged quite perilous (175).

Case C-475/93 Thévenon [1995] ECR I-3813) permit-
ted  the  CJ,  undoubtedly  not  completely  blind  to 
its  arguments,  to  strictly  limit  the  consequences  of 
the  Rönfeldt  judgment  by  introducing  a  distinction 
according  to  whether  the  migrant  worker  moved 
between  the  states  concerned  before  or  after  the 
entry into force of Regulation (EEC) No 1408/71: this 
case-law will only be applied in the first hypothesis.

Thus, in the Rönfeldt case, the CJ was led to have to 
settle a conflict between a Germano-Danish social 
security convention of 1953 and certain provisions 
of Regulation (EEC) No 1408/71, with regard to the 
payment of pension entitlements in favour of a Ger-
man  national,  for  periods  of  insurance  completed 
in  Germany  and  Denmark  before  the  accession  of 
this  latter  state  to  the  Community.  On  complet-
ing  these  periods,  the  person  concerned  was  able 
to  cherish  hopes  based  on  the  application  which 
would be made at retirement age of the provisions 
of  the  Germano-Danish  social  security  convention 
as  Community  law  was  not  yet  applicable  in  the 
relations between Germany and Denmark.

The CJ was also able to make the most favourable 
provisions of the convention, applicable at the time 
of completion of the insurance periods, prevail over 
those  of  Regulation  (EEC)  No  1408/71  on  a  transi-
tional basis in favour of Mr Rönfeldt.

The  circumstances  underlying 
the  Thévenon 
case  —  which  also  concerns  the  payment  of  pen-
sion entitlements with regard to a bilateral conven-
tion between Member States prior to the entry into 

(

175

)  See our study, ‘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, p. 449.

Sean Van Raepenbusch

force  of  Community  regulations  and  more  favour-
able for the person concerned — were quite differ-
ent: all the periods of insurance, completed in this 
case in France and in Germany, by Mr Thévenon had 
been after the entry into force of Regulation No 3. 
Under these conditions, the rule to substitute Com-
munity  law  for  the  Franco-German  social  security 
convention of 1950 was applied in full even though 
the convention would have been more favourable 
for workers (solution of the Walder judgment).

Case C-277/99 Kaske [2002] ECR I-1261 offers a new 
case  of  application  of  the  Rönfeldt  case-law  by  per-
mitting an Austrian national to invoke a more favoura-
ble convention on unemployment benefit concluded 
between Germany and Austria, instead of the provi-
sions  of  Regulation  (EEC)  No  1408/71 (176)  which  had 
the  effect  of  withdrawing  entitlement  to  Austrian 
unemployment  benefit  for  which  a  claim  had  been 
made. Indeed, if Regulation (EEC) No 1408/71 is nor-
mally substituted for bilateral conventions, these can 
still be invoked if they are more favourable and con-
cern periods prior to accession. The CJ observed that 
‘the sole purpose of the principles laid down in Rönd-
feldt  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 Regula-
tion (EEC) No 1408/71 became applicable in a nation-
al’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. 
Indeed, as the Commission maintains, that 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’ (para. 27) (177).

176(

)  Articles 3, 6, 67 and 71 of Regulation (EEC) No 1408/71.

177(

)  See also, in this sense, Cases C-396/05, C-419/05 and C-450/05 Habelt 
and Others [2007] ECR I-11895, with regard to application, in view of the 
payment of pension entitlements, of a Germano-Austrian convention 
of 1966 regarding a German national who had established himself in 
Austria  for  the  purpose  of  living  and  working  there  before  the  entry 
into force in that Member State of Regulation (EEC) No 1408/71 (within 
the framework of the European Economic Area).

Bilateral conventions on social security  
and equality of treatment

Another  interesting  development  to  point  out  in 
the  context  of  relationships  between  Regulation 
(EEC) No 1408/71 and bilateral social security con-
ventions  is  that  relating  to  the  implications  of  the 
principle of equality of treatment.

The CJ has extended to the field of social security what 
it had judged with regard to preventive double taxa-
tion conventions (see Case C-307/97 Saint-Gobain ZN 
[1999] ECR I-6161, paragraphs 57 to 59). Thus, it follows 
from the important Case C-55/00 Gottardo ([2002] ECR 
I-413), ‘when giving effect to commitments assumed 
under international agreements, be it an agreement 
between Member States or an agreement between a 
Member State and one or more non-member coun-
tries, Member States are required, subject to the provi-
sions of Article 307 EC, to comply with the obligations 
that Community law imposes on them. The fact that 
non-member countries, for their part, are not obliged 
to  comply  with  any  Community-law  obligation  is  of 
no relevance in this respect’ (para. 33).

Also,  ‘when  a  Member  State  concludes  a  bilateral 
international convention with a non-member coun-
try which provides for account to be taken of periods 
of insurance completed in that non-member coun-
try  for  acquisition  of  entitlement  to  old-age  ben-
efits,  the  fundamental  principle  of  equal  treatment 
requires  that  that  Member  State  grant  nationals  of 
other Member States the same advantages as those 
which its own nationals enjoy under that convention 
unless it can provide objective justification for refus-
ing to do so’ (para. 34).

In this regard, the CJ has estimated that ‘disturbing 
the  balance  and  reciprocity  of  a  bilateral  interna-
tional  convention  concluded  between  a  Member 
State  and  a  non-member  country  may,  it  is  true, 
constitute  an  objective  justification  for  the  refusal 
by  a  Member  State  party  to  that  convention  to 
extend  to  nationals  of  other  Member  States  the 
advantages  which  its  own  nationals  derive  from 

35

50 years of Social Security Coordination 

Past – Present – Future

that  convention  (see,  to  that  effect,  Saint-Gobain 
ZN, cited above, para. 60)’ (para. 36).

However,  in  this  case,  the  Italian  government 
(which  had  concluded  a  convention  with  Switzer-
land providing for account to be taken by the Ital-
ian authorities of periods of insurance completed in 
that non-member country for acquisition of entitle-
ment to old-age benefits) had not established that 
the obligations which Community law imposes on 
it would compromise those resulting from commit-
ments undertaken by Italy with regard to  Switzer-
land,  the  possible  increase  in  financial  charges  by 
Italy and the administrative difficulties linked with 
collaboration with the competent Swiss authorities 
not being able to justify lack of respect for obliga-
tions resulting from the Treaty.

Consequently,  it  was  incumbent  on  the  Italian 
authorities  to  take  into  account,  for  the  purposes 
of  acquisition  of  entitlement  to  old-age  benefits, 
the periods of insurance completed in Switzerland 
by a French national, when in the face of the same 
contributions,  those  authorities  recognised,  in  the 
application  of  the  bilateral  international  conven-
tion, the taking into account of such periods com-
pleted by their own nationals.

II.  The governIng 

PrInCIPleS oF CommunITy 
CoordInaTIon

a.  Equality of treatment

It  is  obviously  by  means  of  successive  layers,  fol-
lowing proceedings brought to its knowledge, that 
the CJ has constructed its case-law on equal treat-
ment  in  favour  of  citizens  of  the  Union,  by  way  of 
a  dynamic  interpretation  of  the  principle  of  non-
discrimination  according  to  nationality.  Three  sig-
nificant  traits  of  case-law  of  the  CJ  in  this  regard 
deserve to be underlined.

Assimilation of facts and principle of equivalence

One of the most striking expressions of equal treat-
ment in relation to the exercise of the right of free-
dom  of  movement  is  the  assimilation  of  facts  or 
events  in  another  Member  State  to  those  which 
would  have  been  produced  in  the  host  state  for 
the  recognition  of  certain  rights  or  advantages  in 
accordance with applicable national legislation (179).

If it is true that this consequence has rapidly been 
linked to the principle of  equality of  treatment by 

This case-law has the effect of reducing the impact 
of  the  principle  of  reciprocity  which  presides  over 
the  establishment  of  conventional  relations  in 
order  to  give  full  force  to  the  fundamental  prin-
ciple  of  equality  of  treatment  in  the  Community 
legal system (178).

(

(

178

)  The  Administrative  Commission  on  Social  Security  for  Migrant 
Workers has drawn the consequences of this case-law by adopting, on 
18 June 2003, Recommendation No 22 concerning the Gottardo case-
law according to which the advantages ensuing from a bilateral social 
security convention between a Member State and a third country for 
national workers must be accorded to workers who are nationals of 
other  Member  States  (OJ  L  326,  13.12.2003,  p.  35).  Paragraph  2  of 
this  recommendation  provides  for  the  new  bilateral  social  security 
conventions containing an express reference to the principle of non-
discrimination as interpreted by the Gottardo judgment.

36

179

)  The reasoning is not so far removed from that followed by the CJ in 
its  famous  Cassis  de  Dijon  judgment  (Case  120/78,  Rewe-Zentrale 
[1999]  ECR  649),  on  the  free  movement  of  goods,  even  if  the  issue 
dealt with was rather that of a barrier. The CJ judged that, even in the 
absence of harmonisation of national legislation, any product legally 
produced and sold in a Member State must be able, in principle, to be 
sold in another Member State. Apart from the exceptions of Article 
30 EC, a Member State may only oppose the marketing of products 
which do not satisfy its own technical or commercial regulations for 
reasons based on imperative requirements of public interest, such as 
consumer protection, fair trading, environmental protection, pluralism 
of the press, etc. The regulations must also be non-discriminatory in 
their  application  and  adaptation  to  the  necessities  of  the  intended 
objective. It is about nothing other than the implementation of the 
technique of mutual recognition (or the equivalence of situations), a 
technique which has permitted the legislator not to invoke the action 
of approximation of national legislations in a number of fields, with a 
view to ensuring the full force and effect of the freedom of movement 
guaranteed  by  the Treaty.  A  topical  example  in  this  regard  may  be 
found in the approach followed by the Council in adopting Directive 
89/48/EEC  on  general  recognition  of  higher-education  diplomas 
awarded on completion of professional education and training of at 
least three years’ duration: a no longer sectoral but general, horizontal 
approach,  based  on  the  idea  of  comparability  of  training,  that 
university courses of study, provided by the Member States, present 
great similarities.

Sean Van Raepenbusch

the  CJ (180),  case-law  has  not  fluctuated  any  less,  in 
particular  in  the  field  of  social  security,  in  relation 
to  the  territoriality  of  certain  benefits (181). Today  it 
seems well established to us in the sense of the rec-
ognition of the equivalence of situations. The CJ has 
thus judged that:

•	

•	

•	

where the legislation of the Member State pro-
viding family benefits ‘requires, as a condition 
for the grant of those benefits, that a member 
of  the  worker’s  family  must  be  registered  as 
unemployed  with  the  employment  office  for 
the  territory  in  which  that  legislation  applies, 
that  condition  must  be  considered  to  be  ful-
filled  where  the  family  member  is  registered 
as unemployed with the employment office of 
the Member State in which he resides’ (182);
Community  law  objects  to  a  migrant  worker 
being  precluded  from  invoking  for  the  calcula-
tion  of  his  old-age  pension  periods  of  invalid-
ity as periods of active employment on the sole 
ground that, when he became incapable of work, 
he  was  employed,  not  in  the  Member  State  in 
question, but in another Member State (183);
when a national legislation makes entitlement 
to  a  benefit  subject  to  a  minimum  period  of 
insurance in a reference period preceding the 
occurrence  of  the  risk  while  in  certain  cases 
permitting  the  extension  of  this  period,  such 
legislation  must  envisage  a  possibility  of 

•	

•	

•	

extension  of  the  reference  period  where  the 
facts or circumstances corresponding to those 
which  permit  the  extension  occur  in  another 
Member State (184);
when the legislation of a Member State envis-
ages the extension of the right to an orphan’s 
benefit  beyond  the  age  of  25  years  for  per-
sons  entitled  to  the  benefit  whose  education 
or  vocational  training  has  been  suspended  or 
delayed as a result of the completion of military 
service,  this  state  must  assimilate  the  military 
service completed in another Member State to 
military  service  completed  under  its  own  leg-
islation (185);
by  requiring,  as  a  condition  for  the  granting 
of  redundancy  pay,  that  children  of  Commu-
nity migrant workers resident in Belgium have 
finished  secondary  school  at  an  establish-
ment subsidised or recognised by the Belgian 
State,  it  has  failed  in  its  obligations  by  virtue 
of former Article 48 of the EC Treaty (now Arti-
cle 39 EC) and of Article 7 of Regulation (EEC) 
No 1612/68 (186);
Articles  39,  para.  2,  EC  and  42  EC  preclude 
national legislation which does not provide for 
the  possibility  of  prolongation  of  a  reference 
period for the calculation of the right to benefit 
where the payment of accident benefits corre-
sponding to those which enable such a prolon-
gation occurs in another Member State (187);

(

(

(

(

180

)  See  Ugliola  judgment  [1969]  ECR  I-36,  where  on  the  basis  of  the 
principle  of  equality  of  treatment  implemented  by  former  Article 
48 EEC, the CJ was able to equate military obligations fulfilled in the 
country  of  origin  with  those  fulfilled  in  the  state  of  employment  in 
order  to  permit  the  Community  worker  to  benefit  from  identical 
protection  to  that  of  the  national  worker  in  terms  of  employment 
conditions.

181

)  See Case 20/75 D’Amico [1975] ECR I-202, with regard to taking into 
account  periods  of  unemployment  completed  in  another  Member 
State with a view to the acquisition of entitlement to an early pension, 
and Case 66/76 Kuyken [1977 ] ECR I-2711, in which for the granting 
of unemployment benefit, under the legislation of a Member State, 
the  CJ  did  not  permit  former  students  who  had  never  occupied 
a  post  to  equate  studies  completed  in  another  Member  State  with 
those  completed  in  an  establishment  organised,  recognised  or 
subsidised by the competent state. See also our work, Introduction 
à la sécurité sociale des personnes qui se déplacent à l’intérieur de la 
Communauté européenne. Principes directeurs et grands arrêts de la 
Cour de justice, De Boeck Université, 2001, No 44.

182

)  Case  C-228/88  Bronzino  [1990]  ECR  I-531,  and  Case  C-12/89  Gatto 

[1990] ECR I-577.

184(

)  Case C-349/97 Paraschi [1991] ECR I-4501.

185(

)  Case C-131/96 Mora Romero [1997] ECR I-3659.

186(

)  Regulation  (EEC)  No  1612/68,  of  15  July  1968,  on  the  right 
of  workers  to  move  and  reside  freely  within  the  territory  of 
the  Member  States  (OJ  L  257,  19.10.1968).  See  Case  C-278/94 
Commission  v  Belgium  [1996]  ECR  I-4307.  We  would  point  out 
that  following  this  judgment,  the  Belgian  rule  was  amended, 
studies  completed  in  another  Member  State  being  henceforth 
assimilated to studies completed in Belgium on condition that: 
—  the  person  concerned  produces  documents  which  show 
that  the  studies  or  training  are  of  the  same  level  and  equivalent 
to Belgian studies which provide entitlement; 
— at the time of his benefit claim, the person concerned is classified 
as  a  child  of  migrant  workers,  beneficiaries  of  the  freedom  of 
movement guaranteed by European law, and resident in Belgium. 
This new rule will initiate a new reference for a preliminary ruling raising 
the question of its compatibility with the requirements of European 
citizenship, in the event that the particular person concerned is not 
classified as the child of a migrant worker (see below, in para. 12, our 
comments on Case C-258/04 Ioannidis [2005] ECR I-8275).

183

)  Cases C-45/92 and C-46/92 Lepore and Scamuffa [1993] ECR I-6497.

187(

)  Case C-290/00 Duchon [2002] ECR I-3567.

37

 
 
 
50 years of Social Security Coordination 

Past – Present – Future

•	

•	

it  likewise  follows  from  a  national  rule  which, 
to  determine  periods  of  insurance  assimilated 
under  old-age  insurance,  only  takes  into  con-
sideration,  unconditionally,  periods  of  child-
rearing  completed  on  national  territory,  but 
makes  the  benefit  of  maternity  allowances  by 
virtue of national legislation subject to the tak-
ing into consideration of periods of child-rear-
ing completed in another Member State (188);
finally,  Community  law  precludes  a  Member 
State  refusing  to  take  into  consideration,  for 
the purposes of granting a childcare allowance, 
the perception period of a comparable benefit 
in another Member State in the same way as if it 
had been completed on its own territory (189).

It  should  be  noted  that,  regardless  of  the  rule  of 
non-discrimination,  the  technique  of  assimilation 
of  situations  is  largely  used  within  the  framework 
of Regulations (EEC) Nos 1408/71 and 574/72 (prin-
ciple of aggregating periods of insurance, employ-
ment  and  residence  to  qualify  for  social  security 
benefits or their calculation).

Obstacle to free movement and principle  
of non-discrimination

A second dominant trait in the context of the free 
movement of persons is the already former trend of 
the CJ to include in the notion of indirect discrimina-
tion that of obstacle to free movement. Thus, in order 
to  establish  such  discrimination,  the  CJ  will  verify 
whether the criterion, apparently neutral, which is 
used  has ‘the  same  importance’  both  for  migrant 
workers or, more generally, for persons having exer-
cised their right of free movement and for nationals 
or ‘those permanently settled’. This analysis frame-
work has had the effect of considerably expanding 
the scope of the rule on equality of treatment.

Case  C-41/89  Pinna  [1986]  ECR  I-1,  invalidating 
former  Article  73,  para.  2,  of  Regulation  (EEC)  No 
1408/71  on  social  security  of  migrant  workers, 
quite well illustrates the reasoning followed by the 
CJ. This provision envisaged a specific regime, with 
regard to payment of family allowances, for workers 
employed  in  France:  allowances  for  children  resi-
dent on the territory of another Member State were 
paid  by  France  according  to  the  legislation  of  the 
state in which the children were living. It was there-
fore  a  question  of  verifying  whether  the  criterion 
of  place  of  residence  of  the  family  members  of  a 
worker employed in France, used certainly without 
apparent  distinction  of  nationality,  had ‘the  same 
importance’  for  ‘migrant  workers’  as  for  ‘national 
workers’. The CJ judged that Article 73(2) of Regula-
tion (EEC) No 1408/71 contained discrimination dis-
guised according to nationality contrary to former 
Article 48 of the Treaty (190).

The  transposition  to  the  criterion  of  the  nationality 
of that of having or not having exercised the right of 
freedom of movement within the Community is par-
ticularly  striking  in  the  Masgio  case  (Case  C-10/90 
Masgio [1991] ECR I-1134), where the CJ was led to 
verify whether a national provision on the calcula-
tion of an old-age pension being paid concurrently 
with  accident  insurance  benefits  paid  in  another 
Member  State,  although  it  is  applied  independ-
ently  of  the  nationality  of  the  workers  concerned, 
is ‘liable, even though it applies without regard to 
the nationality of the workers concerned, to place 
migrant workers in a worse position as regards social 
security  than  those  who  have  worked  in  only  one 
Member State’ (para. 19; the italics are ours).

The CJ having established that the concurrency reg-
ulation operating differently depending on whether 

(

(

188

)  Case  C-28/00  Kauer  [2002]  ECR  I-1343,  paras  43  and  44;  see,  in  the 

same sense, Elsen case, abovementioned, paras 25 to 28.

189

)  Case  C-507/06  Klöppel  [2008],  not  yet  published,  paras  18  and  19. 
According to Austrian legislation, when only one parent receives the 
childcare allowance, this is due for a maximum of 30 months following 
the birth of the child, but if the second parent receives this allowance 
(or has received it) as well, the allowance is due for 36 months, the 
parents thus receiving the allowance alternately.

(

190

)  See also, in the same sense, Case 237/78 Toia [1979] ECR I-2645, on 
the French allowance to mothers of families reserved for those whose 
children are French nationals; Case 33/88 Allue [1989] ECR I-1591, on 
the application of a provision of Italian law providing for a limit to the 
duration of a working connection between universities and foreign-
language assistants, although such a limit does not exist, in principle, 
for other workers; and Case C-27/91 Le Manoir [1991] ECR I-5538, on 
relief from employer social security contributions the benefit of which 
was  subject  to  employment  by  the  employer  of  trainee  workers 
relevant to the national education of the Member State considered. 

38

Sean Van Raepenbusch

the benefit is paid in the same Member State or in 
another  Member  State,  and  such  that  it  places  a 
worker who has exercised his right in a worse posi-
tion,  has  judged  that  the  provision  concerned  ‘is 
liable to constitute an obstacle to freedom of move-
ment for workers’ and is contrary to Articles 7 and 39 
to 42 EC as well as to Article 3(1) of Regulation (EEC) 
No 1408/71.

Mention should also be made, even if it is a marginal 
case in the field of social security, of Case C-237/94 
O’Flynn [1996] ECR I-2617. At issue was the British 
legislation granting a payment to persons of mod-
est  means  for  funeral  expenses  on  condition  that 
the funeral takes place in the United Kingdom. What 
happens when the claimant, a national of another 
Member State, working and resident in the United 
Kingdom, wishes the burial of his child to take place 
in the state of origin, in the family vault? After hav-
ing considered that such a payment constitutes a 
social  right  within  the  meaning  of  Article  7(2)  of 
Regulation (EEC) No 1612/68, and that, in accord-
ance with this provision, migrant workers must be 
able to benefit from it under the same conditions 
as national workers, the CJ has established that the 
provision concerned, imposing the condition that 
funerals  take  place  on  national  territory,  is  liable, 
by its nature, to affect migrant workers more than 
national workers as they will more often be led to 
arrange for burial in their state of origin with which 
they  generally  maintain  links.  As  a  consequence, 
according  to  the  CJ,  the  condition  that  the  burial 
(or the cremation) take place on national territory 
constitutes discrimination (191).

Finally, the CJ used the same framework for analy-
sis in Case C-400/02 Merida [2004] ECR I-8499, with 
regard  to  the  method  of  calculating  a ‘temporary 
allowance’  granted  by  the  German  State,  by  vir-
tue  of  a  collective  agreement,  to  civilian  workers 
employed  in  foreign  armed  forces  stationed  on 
national  territory  and  whose  contract  of  employ-
ment had been terminated. This allowance was cal-
culated  on  the  basis  of  remuneration  from  which 
German income tax had been notionally deducted 
even  if  the  remuneration  had  been  subject  to  tax 
in the country of residence (in this case in France), 
under  a  double  taxation  agreement  between  the 
two  states. The  CJ,  in  applying  Articles  39  EC  and 
7(4) of Regulation (EEC) No 1612/68, has confirmed 
that  this  method  of  calculation  disadvantaged 
border  workers.  Indeed,  although  the  application 
thereof ensured German residents, in the course of 
the first year following termination of the contract 
of employment, an income equivalent to that of an 
active worker, this was not the case for French resi-
dents  who  found  their  allowance  subject,  as  was 
their salary, to taxation in France (192).

European citizenship and non-discrimination

Indeed,  we  cannot  leave  without  comment  the 
consequences  of  European  citizenship  from  the 
perspective of the principle of non-discrimination 
based  on  nationality,  as  guaranteed  by  Article  12 
EC, in particular in the field of social benefits. The CJ 
has specifically attached to the status of citizen of 
the Union, which ‘is destined to be the fundamen-
tal status of nationals of the Member States’ (193), the 

(

191

)  The CJ has adjudicated again on whether such discrimination might 
be objectively justified and proportionate to the objective pursued. 
The United Kingdom invoked two pieces of evidence in this regard: 
the protection of public health and the prohibitive cost and practical 
inconvenience which the payment of the benefit would entail if the 
burial or cremation takes place outside the national territory. These 
two  pieces  of  evidence  were  rejected  by  the  CJ.  On  the  one  hand, 
the protection of public health would be equally safeguarded if the 
remains were transported outside the territory of the UK with a view 
to  being  buried  or  cremated  in  another  Member  State  (para.  26). 
On the other hand, with respect to the costs of burial or cremation 
in  another  Member  State,  there  is  nothing  to  prevent  ‘the  United 
Kingdom from limiting the allowance to a lump sum or reasonable 
amount fixed by reference to the normal cost of a burial or cremation 
within the United Kingdom’ (para. 29).

192(

)  Furthermore,  the  CJ  rejected  without  difficulty  the  reasons  of 
administrative  simplification  and  restriction  of  financial  costs 
advanced by the German government, such reasons not being able to 
justify failure to comply with obligations arising from the EC Treaty.

193(

)  Case  C-184/99  Grzelczyk  [2001]  ECR  I-6193,  para.  31,  regarding  a 
student with French nationality studying in Belgium and who applied 
for  the  minimex  benefit.  Mention  should  likewise  be  made,  in  this 
sense,  of  Case  C-224/02  Pusa  [2004]  ECR  I-5763,  concerning  the 
Finnish law on enforcement, which, in order to determine the amount 
distrainable, did not permit any consideration to be taken of the tax 
paid  by  the  party  concerned  in  another  Member  State,  contrary  to 
that which was provided for in the case of deduction at source under 
taxation in Finland; as well as of Case C-147/03 Commission v Austria 
[2005]  ECR  I-5969,  on  conditions  of  access  to  higher  and  university 
education  of  a  nature  to  restrict  access  to  national  universities  by 
holders of diplomas obtained in other Member States.

39

50 years of Social Security Coordination 

Past – Present – Future

right not to suffer discrimination ‘within the scope 
of  application  ratione  materiae  of  the  Treaty’ (194), 
which obviously supposes that the interested par-
ty  is  legally  resident  on  the  territory  of  the  Mem-
ber  State  considered (195).  But  over  and  above  the 
question of the right of residence of citizens of the 
European Union, the examination of which would 
distract us from the object of this study, it is worth 
mentioning  several  recent  CJ  cases  concerning 
the  degree  of  integration  on  national  territory,  of 
which the European citizen must provide evidence 
in order to claim the right to certain social benefits. 
In these cases, the CJ has directly applied the rules 
of the Treaty regarding equality of treatment.

Case C-138/02 Collins [2004] ECR I-2703 is an impor-
tant judgment in this regard.

Mr  Collins,  possessing  dual  Irish  and  American 
nationality, returned to the United Kingdom in order 
to find employment in the social services sector. He 
asked to be able to receive job-seekers allowance, 
which  he  was  refused  on  the  ground  that  he  was 
not habitually resident in this state. Was this condi-
tion discriminatory and contrary to the Treaty? This 
was the question.

As the party concerned was looking for first employ-
ment,  he  had  not  yet  established  an  employment 
relationship in the host Member State. He therefore 
could  not  claim  according  to  the  CJ,  on  the  basis 
of Article 7 of Regulation (EEC) No 1612/68 (196), the 
same social and tax advantages as national workers. 
Indeed,  the  term ‘worker’  in  the  sense  of Title  II  of 
the first part of the said regulation only, according 
to the CJ, covers persons who have already entered 
the employment market.

(

(

(

194

)  Case C-85/96 Martinez Sala [1998] ECR I-2708, para. 62, on a Spanish 
national residing in Germany, having ceased all professional activity 
and who claimed a child-rearing allowance for her child.

195

)  See in this regard our comments in ‘Tendances récentes (1998-2003) 
de la jurisprudence sociale de la CJCE’, JTT 2003, pp. 243, 301–303.

196

)  Regulation (EEC) No 1612/68, of 15 July 1968, on the right of workers 
to move and reside freely within the territory of the Member States 
(OJ L 257, 19.10.1968). 

40

The CJ has no less verified, directly with regard to 
Article  39(2)  EC,  whether  the  principle  of  equality 
of  treatment  is  at  odds  with  a  national  regulation 
which makes a financial benefit, intended to facili-
tate access to employment, subject to a condition 
of  residence  on  national  territory.  It  is  remarkable 
that  the  CJ  has  stated  that  it  wishes  to  interpret 
Article  39  EC  in  the  light  of  intervening  develop-
ments  regarding  European  citizenship,  which  ‘is 
destined to be the fundamental status of nationals 
of the Member States’. It is thus estimated that the 
national regulation in question introduced a differ-
ence of treatment to the extent that the party con-
cerned  lives  habitually  in  the  United  Kingdom  or 
not, in such a way as to disadvantage nationals of a 
Member State who make use of their right to move 
freely  for  the  purposes  of  finding  employment  on 
the territory of another Member State.

However,  the  CJ  considered  that  it  was ‘legitimate 
for  the  national  legislature  to  wish  to  ensure  that 
there  is  a  real  link  between  the  applicant  for  that 
allowance and the geographic employment market 
concerned’  (see  also,  in  this  sense,  Case  C-224/98 
D’Hoop [2002] ECR I-6191, para. 38), it being possi-
ble to establish the existence of such a link ‘in partic-
ular, by establishing that the person concerned has, 
for  a  reasonable  period,  in  fact  genuinely  sought 
work in the Member State in question’ (paras 66 to 
70). In doing so, the CJ intended to prevent a cer-
tain kind of ‘social tourism’. The period of residence 
thus required may not, however, ‘exceed that which 
is  necessary’,  in  accordance  with  the  principle  of 
proportionality,  which,  as  so  often  in  Community 
law, is for the national judge to assess (197).

It is surprising that the CJ, in this case, did not quite 
simply  follow  the  route  of  Regulation  (EEC)  No 
1408/71, the benefit in question, specifically referred 
to in Annex IIa of the said regulation, having to be 

(

197

)  The  solution  accepted  by  the  Collins  judgment,  based  on  the 
EC  Treaty,  is  not  in  harmony  with  the  text  of  Directive  2004/38/
EC,  abovementioned,  Article  24(2)  of  which  explicitly  rejects  the 
obligation  for  the  Member  States  to  grant  nationals  from  other 
Member States assistance in looking for initial employment on their 
national territory.

Sean Van Raepenbusch

granted  to  any  person  resident  on  national  terri-
tory.  However,  this  supposed  that  it  was  possible 
to establish that Mr Collins had decided to appoint 
the  United  Kingdom  as  the  habitual  centre  of  his 
interests (see, in this sense, Case C-90/97 Swaddling 
[1999] ECR I-1075).

Case  C-258/04  Ioannidis,  abovementioned,  consti-
tutes another illustration of the extensive interpre-
tation  of  Article  39(2)  EC  by  the  CJ  following  the 
phasing-in  of  citizenship  of  the  European  Union 
with regard to a financial benefit (such as the tide-
over  allowance  in  Belgium)  intended  to  facilitate 
access to employment in a Member State. Accord-
ing to the CJ, national rules, in refusing the advan-
tage  of  the  said  benefit  to  nationals  of  another 
Member State seeking their first employment (and 
who  are  not  in  the  charge  of  migrant  workers (198)) 
for  the  sole  reason  that  those  concerned  have 
completed  their  secondary  education  in  another 
Member State, introduces a difference of treatment 
contrary  to  Article  39(2)  EC  in  that  this  latter  con-
dition  risks  putting  at  a  disadvantage  principally 
nationals  from  other  Member  States,  unless  such 
a difference of treatment is based on independent 
objective  considerations  of  the  nationality  of  the 
people concerned and proportionate to the objec-
tive  legitimately  pursued.  In  this  regard,  as  has 
just  been  recalled,  it  is  legitimate  for  the  national 
legislator to want to ensure the existence of a real 
link between the tideover benefit claimant and the 
geographical market of the work at issue (para. 30; 
Hoop case, abovementioned, para. 38).

However, as the CJ had already judged in this last case, 
‘a  single  condition  concerning  the  place  where  the 
diploma  of  completion  of  secondary  education  was 
obtained is nevertheless too general and exclusive’.

Case C-192/05 Tas-Hagen and Tas [2006] ECR I-10451 
concerns the requirement for a condition of residence 
on national territory, imposed by a Dutch rule in view 

of the granting of a benefit provided for the use of civil-
ian victims of war. As Dutch nationals, Ms Tas-Hagen 
and Mr Tas were able to invoke their status of citizens 
of the Union, having exercised their right to move and 
reside freely on the territory of a Member State other 
than the one of which they are nationals, as they had 
established their place of residence in Spain. It is pre-
cisely  the  exercise  of  this  right  which  had  been  of  a 
nature to affect the possibility for them of obtaining 
the payment of the benefit concerned.

The  CJ,  resuming  a  well-known  line  of  reasoning 
in  the  context  of  freedom  of  movement  of  work-
ers,  judged  that ‘the  opportunities  offered  by  the 
Treaty in relation to freedom of movement cannot 
be fully effective if a national of a Member State can 
be deterred from availing himself of them by obsta-
cles  raised  to  his  residence  in  the  host  Member 
State by legislation of his state of origin penalising 
the fact that he has used them’ (para. 30) (199). Such 
is  the  case  if  a  national  rule  makes  the  advantage 
of a social benefit subject to the condition that the 
people concerned have their place of residence on 
national territory on the date on which their claim 
is made as this could deter them from leaving their 
state of origin. Nevertheless such a restriction can 
be justified, with regard to Community law, ‘only if it 
is based on objective considerations of public inter-
est  independent  of  the  nationality  of  the  persons 
concerned  and  is  proportionate  to  the  legitimate 
objective of the national provisions’ (para. 33).

In  the  present  case,  the  objective  of  restricting  an 
obligation  of  solidarity  with  regard  to  the  civilian 
victims of war only to persons who had a link with 
the Dutch people during and after the war is liable, 
according  to  the  CJ,  to  constitute  an  objective  of 
general  interest,  but  it  is  still  necessary  that  the 
measure taken, to know the condition of residence 
as well as expression of this degree of attachment 
to the Dutch people, be proportionate, that is to say 
capable  of  achieving  the  objective,  without  going 
beyond what is necessary for that purpose.

(

198

)  With  regard  to  the  children  of  migrant  workers,  seeking  their  first 
employment,  see  Case  94/84  Deak  [1985]  ECR  I-1873,  and  Case 
C-337/97 Meensen [1999] ECR I-5289.

199(

)  See also Pusa judgment, abovementioned, para. 19.

41

50 years of Social Security Coordination 

Past – Present – Future

But  a  condition  of  residence  cannot,  according  to 
the  CJ,  be  considered  as  capable  of  achieving  the 
objective pursued as, reported only on the date on 
which  the  claim  is  made,  it  does  not  provide  suf-
ficient  indication  of  the  degree  of  attachment  to 
the society of the Member State thus testifying its 
solidarity with regard to victims of war. The rule was 
thus  deemed  contrary  to  Article  18(1)  EC,  guaran-
teeing  the  right  to  move  and  reside  freely  within 
the territory of the Member States.

In contrast, in Case C-406/04 De Cuyper [2006] ECR 
I-6947, the condition of residence imposed by the 
Belgian  rule  for  the  granting  of  unemployment 
benefit  to  unemployed  persons  over  50  years  old, 
exempt from the obligation to register as job-seek-
ers,  was  judged  compatible  with  Article  18(1)  EC.  
Indeed,  such  a  condition  of  residence  complies, 
according  to  the  CJ,  with  the  necessity  for  the 
inspection services to monitor the professional and 
family  situation  of  the  persons  concerned,  for  the 
application of the right to unemployment benefit, 
which  constitutes  an  objective  consideration  of 
general  interest  independent  of  the  nationality  of 
the persons concerned. Furthermore, with regard to 
the proportionality of the restriction, the efficacy of 
such a check rests, to a certain extent, on its random 
nature  and  the  possibility  of  its  monitoring  being 
performed in situ. The CJ added that ‘the monitoring 
to be carried out as far as concerns unemployment 
allowances is of a specific nature which justifies the 
introduction of arrangements that are more restric-
tive than those imposed for monitoring in respect 
of other benefits’ (para. 45) (200).

(

200

)  Mention  should  again  be  made,  even  if  we  move  away  from  the 
field  of  social  security,  of  the  granting  of  a  maintenance  grant  to  a 
student,  a  national  of  a  Member  State  who  has  gone  to  another 
Member  State  to  complete  his  studies  there:  Case  C-158/07  Förster 
[2008], not yet published, paras 51 to 60, in which the CJ judged in 
particular that a condition of uninterrupted residence of a duration of 
five years was both capable of guaranteeing that the claimant of the 
grant was integrated into the host Member State and proportionate 
to the objective legitimately pursued by national law. The CJ referred 
in particular to Article 21(2) of Directive 2004/38/EC (although it was 
not applicable in the case), providing that a Member State was not 
obliged  to  grant  study  maintenance  grants  to  students  having  not 
acquired the right of permanent residence, as well as to Article 16(1) 
of the same directive according to which such a right of residence is 
recognised for students having resided on the territory of the Member 
State concerned for an uninterrupted period of five years (para. 55). 
The CJ did not therefore intend to call into question the appraisal of 
the Community legislator himself.

It is thus ascertained that, for the purposes of Com-
munity regulations regarding the social security of 
migrant  workers,  case-law  has  developed  based 
directly on the provisions of the Treaty with regard 
to the conditions for granting social advantages, of 
which certain social security benefits, for the ben-
efit of the citizens of the Union.

b.  Determination of the applicable  

legislation

In  this  regard,  we  have  made  the  choice  to  use  a 
single  judgment  touching  on  particularly  sensitive 
questions relating to the phenomenon of relocation 
of undertakings, encouraged by the disparities them-
selves between national social security schemes.

In principle, in accordance with Article 13(2) of Reg-
ulation (EEC) No 1408/71 the salaried worker is sub-
ject  to  the  legislation  of  the  state  on  the  territory 
of  which  he  is  engaged  in  an  occupation,  regard-
less of the location of his place of residence or that 
of  the  headquarters  or  domicile  of  his  employer. 
However, Article 14(1) provides that in the event of 
secondment of a worker, ‘employed in the territory 
of a Member State by an undertaking to which he 
is  normally  attached’  to  another  Member  State ‘to 
perform  work  there  for  that  undertaking’,  he  shall 
continue  to  be  subject  to  the  legislation  of  the 
first Member State. It is still a requirement that ‘the 
anticipated duration of that work does not exceed 
12  months’  and  that  the  person  concerned  is  not 
sent ‘to replace another worker who has completed 
his term of posting’.

In its famous Case 35/70 Manpower [1970] ECR I-1251, 
the CJ had underlined the objective of this exception 
to  the  rule  of  the  state  of  employment  [at  the  time 
contained in Article 13(a), of Regulation No 3]: it is a 
question of promoting the free provision of services 
for  the  benefit  of  undertakings  which  make  use  of 
them  by  sending  workers  to  Member  States  other 
than  the  one  in  which  they  are  established  and  of 
favouring  economic  interpenetration  (para.  10),  by 
preventing an undertaking established in a Member 

42

Sean Van Raepenbusch

State from being obliged to affiliate their workers, nor-
mally subject to the social security legislation of that 
state,  with  the  social  security  system  of  other  Mem-
ber States where they were sent to perform work of 
short duration (para. 11). The CJ thus considered that 
this exception was applicable to a temporary employ-
ment agency wishing to offer cross-border services on 
condition that it was engaged in a ‘normal’ activity in 
the Member State where it was established (para. 16).

In Case C-202/97 Fitzwilliam [2000] ECR I-883, the CJ 
further specified the conditions for the application 
of Article 14(1)(a), of Regulation (EEC) No 1408/71, 
to  temporary  workers  seconded  to  another  Mem-
ber  State  in  order  to  ensure  that  recourse  to  this 
exception is not diverted from its objective and that 
it does not in reality just serve a deliberate wish to 
avoid the application of the general rule of the state 
of employment.

Two  conditions  must  be  respected  according  to 
the CJ.

•	

•	

On  the  one  hand,  an  organic  link  must  exist 
between  the  undertaking  and  the  workers 
that it has seconded on the territory of another 
Member State for the duration of their second-
ment. It suffices, in this regard, that the worker 
in  question  is  posted  on  the  authority  of  the 
undertaking.
On the other hand, the temporary employment 
agency must normally carry on its activities in the 
Member State in which it is established, that is to 
say, it ‘habitually carries on significant activities’ 
there (201).  In  this  regard,  the  CJ  cites  a  number 
of  criteria  likely  to  characterise  such  activities: 
‘the  place  where  the  undertaking  has  its  seat 
and  administration,  the  number  of  administra-
tive staff working in the Member State in which 
it is established and in the other Member State, 

(

201

)  See also, in this sense, Case C-178/97 Banks [2000] ECR I-2005, para. 
27.  From  this  it  emerges  that  a  building  enterprise,  established  in 
another  Member  State,  which  sends  its  workers  to  the  territory  of 
another Member State in which it carries on all its activities, with the 
exception  of  purely  internal  management  activities,  may  not  avail 
itself  of  Article  14(1)(a)  of  Regulation  (EEC)  No  1408/71  (see  Case 
C-404/98 Plum [2000] ECR I-9379, para. 22).

the  place  where  posted  workers  are  recruited 
and  the  place  where  the  majority  of  contracts 
with  clients  are  concluded,  the  law  applicable 
to the employment contracts concluded by the 
undertaking with its workers, on the one hand, 
and with its clients, on the other hand, and the 
turnover during an appropriately typical period 
in each Member State concerned’ (para. 43).

In contrast, the nature of the tasks assigned respec-
tively  to  the  workers  placed  at  the  disposal  of 
undertakings located on the territory of the Mem-
ber State where the temporary employment agen-
cy  is  established  and  to  workers  seconded  on  the 
territory of another Member State is irrelevant.

If that is the case, in the hypothesis of the second-
ment  of  workers,  the  competent  institution  of  the 
Member  State  where  the  temporary  employment 
agency  is  established  would  normally  have  issued 
a  certificate  (E101)  confirming  that  its  social  secu-
rity system remains applicable during the period of 
secondment.  Because  of  the  principles  of  unique-
ness  of  the  applicable  legislation  and  of  legal 
certainty,  ‘the  certificate,  in  comprising  this  dec-
laration,  necessarily  implies  that  the  other  Mem-
ber  State’s  social  security  system  cannot  apply’  
(para. 49). ‘It establishes a presumption that posted 
workers are properly affiliated to the social security 
system of the Member State in which the undertak-
ing  providing  temporary  personnel  is  established’ 
and is binding on the competent institution of the 
Member  State  to  which  those  workers  are  posted 
(para.  53).  Consequently, ‘as  long  as  an  E101  cer-
tificate  is  not  withdrawn  or  declared  invalid,  the 
competent institution of a Member State to which 
workers  are  posted  must  take  account  of  the  fact 
that those workers are already subject to the social 
security legislation of the state in which the under-
taking  employing  them  is  established  and  that 
institution cannot therefore subject the workers in 
question to its own social security system’ (para. 55). 

43

50 years of Social Security Coordination 

Past – Present – Future

However, the CJ observes that the principle of sin-
cere cooperation, laid down in Article 5 of the Treaty 
(now Article 10 EC), ‘requires the competent institu-
tion to carry out a proper assessment of the facts rel-
evant for the application of the rules relating to the 
determination  of  the  legislation  applicable  in  the 
matter of social security and, consequently, to guar-
antee the correctness of the information contained 
in an E101 certificate’ (para. 51). It is incumbent on it 
‘to reconsider the grounds for its issue and, if neces-
sary, withdraw the certificate if the competent insti-
tution  of  the  Member  State  to  which  the  workers 
are posted expresses doubts as to the correctness 
of  the  facts  on  which  the  certificate  is  based  and, 
consequently, of the information contained therein’ 
(para. 56) (see below our developments on the prin-
ciple of sincere cooperation).

Furthermore, the institutions concerned which did 
not manage to reach an agreement are always per-
mitted to appeal to the Administrative Commission 
on  Social  Security  for  Migrant Workers,  independ-
ently  of  the  possibility  for  the  Member  State  to 
which the workers concerned are posted of bring-
ing infringement proceedings under Article 170 of 
the EC Treaty (now Article 227 EC) (para. 58) for fail-
ure to fulfil obligations.

The  consequences  of  the  issue  of  form  E101  have 
been  reiterated  by  the  CJ  in  its  Banks  and  Others 
judgment, abovementioned (paras 38 to 48). The CJ 
will add that there is nothing to prevent certificate 
E101  from  being  issued  during  the  period  under 
consideration, or after its expiry (even if it is prefer-
able  that  issue  takes  place  before  the  start  of  the 
period), and thus has retroactive effect (Banks judg-
ment, paras 53 and 54) (202).

C.  Preservation of acquired rights

In  this  regard,  the  breakthrough  which  seems  the 
most extraordinary to us in recent years, which jus-
tifies  our  dwelling  on  it  a  little,  undoubtedly  con-
cerns the right of those insured to travel to another 
Member State to receive healthcare at the expense 
of  and  in  accordance  with  the  scale  of  the  com-
petent  state,  which  in  turn  guarantees  a  form  of 
‘export of medical care’.

It is a fact that Community law does not affect the 
competence of Member States to adjust their social 
security  systems  and  to  fix  the  scope  of  the  duty 
of  national  solidarity  (Case  C-238/92  Duphar  and 
Others [1984] ECR I-523, para. 16, and Case C-70/95 
Sodemare  and  Others  [1997]  ECR  I-3395,  para.  27). 
Consequently,  in  the  absence  of  harmonisation  at 
Community  level,  it  shall  be  for  the  legislation  of 
each Member State to determine the conditions of 
the right or obligation to affiliate oneself to a social 
security system as well as the conditions for award 
(see in particular Case C-110/79 Coonan [1980] ECR 
I-1445, para. 12; Case C-349/87 Paraschi [1991] ECR 
I-4501, para. 15, and Cases C-4/95 and C-5/95 Stöber 
and Piosa Pereira [1997] ECR I-511, para. 36).

Nevertheless ‘the Member States must […] comply 
with Community law when exercising those powers’ 
(Case C-120/95  Decker [1998] ECR I-1831, para. 23,  
and Case C-158/96 Kohll [1998] ECR I-1931, para. 19).  
This is a good example of the interleaving of Com-
munity and national law. Although Community law 
is  restricted,  as  so  very  often,  to  imperatively  set-
ting  an  objective  to  achieve,  in  the  event  of  the 
realisation of the freedom of movement of persons 
and equality of treatment according to nationality, 
national powers are sustained, but they are framed 
by the rules of the Treaty or derived law, with which 
they may not enter into conflict.

(

202

)  See,  analogously,  Case  C-326/00  IKA  [2003]  ECR  I-1703  and  Case 
C-372/02 Adanez-Vega [2004] ECR I-10761. The CJ will add that there 
is nothing to prevent certificate E101 from being issued during the 
period under consideration, or after its expiry (even if it is preferable 
that  issue  takes  place  before  the  start  of  the  period),  and  thus  has 
retroactive effect.

We  know  that  the  Decker  and  Kohll  judgments 
abovementioned,  which  primarily  concern  the 
free  provision  of  services  (healthcare)  and  the 
free movement of goods (medical products), had 

44

Sean Van Raepenbusch

a  major  impact  not  only  on  the  specialised  envi-
ronments  of  health  insurance,  but  also,  which  is 
more  unusual,  due  to  the  technical  expertise  of 
the material, on the public’s opinion. It is not ruled 
out  that  these  judgments,  which  have  served  as 
catalysers  for  new  prejudicial  references  to  the 
CJ (203), may eventually require some adjustment of 
the principles which govern the health insurance 
systems of the Member States, in order to ensure 
the  full  implementation  of  the  freedoms  guaran-
teed by the Treaty.

This adjustment is the result of difficult arbitration 
which  the  Community  judge  has  had  to  perform 
between, on the one hand, the imperatives of the 
free movement of persons — and of goods, involv-
ing  medical  products  —  and  on  the  other  hand, 
the necessity of maintaining the financial balance 
of  the  health  insurance  systems  of  the  Member 
States and thus that of monitoring health expend-
iture as well as ensuring a balanced and accessible 
medical  and  hospital  service  for  everyone,  which 
is, evidently, not at odds with the maintenance of 
a  certain  level  of  protection  of  public  health  and 
national solidarity.

The  case-law  of  the  CJ  relative  to  the  provision  of 
healthcare  in  a  competent  Member  State,  and  to 
meeting its cost by the latter, may be summarised 
as follows (204).

(

203

)  See Case C-368/98 Vanbraeckel [2001] ECR I-5363 and Case C-157/99 
Smits  and  Peerbooms  [2001]  ECR  I-5423;  Case  C-385/99  Müller-
Fauré  [2003]  ECR  I-4509;  Case  C-156/01  van  der  Duin  and  ANOZ 
Zorgverzekeringen  [2003]  ECR  I-7045;  Case  C-56/01  Inizan  [2003] 
ECR I-12403; Case C-372/04 Watts [2006] ECR I-4325; Case C-466/04 
Acereda  Herrera  [2006]  ECR  I-5341;  and  Case  C-444/05  Stamatelaki 
[2007]  ECR  I-3185.  Mention  should  also  be  made  of  Case  C-326/00 
Ioannidis  [2003]  ECR  I-1703,  which  more  particularly  concerns  the 
case of pension holders with temporary residence in another Member 
State. 

(

204
) 

In  reality,  two  systems  of  meeting  the  cost  of  healthcare  are  found 
in a competent Member State: on the one hand, that laid down by 
Article 22(1) of Regulation (EEC) No 1408/71 which guarantees, under 
certain conditions, the reimbursement of medical costs payable by the 
competent state, but in accordance with the tariffs of the legislation 
of the state on the territory of which the services were provided or 
the products purchased and, on the other hand, that made available 
by the case-law of the CJ with regard to the principles of the freedom 
of  movement  of  goods  and  the  free  provision  of  services,  which  is 
summarised here.

It is clear that the regulatory activity of a Member 
State  which  makes  the  reimbursement  of  medi-
cal costs incurred when care is provided in anoth-
er  Member  State  conditional  on  obtaining  prior 
authorisation to travel to this latter state to obtain 
care there involves a barrier to the free provision of 
services, or to the free movement of goods (if it is a 
question of purchasing medical products in anoth-
er Member State) contrary to Articles 49 and 50 EC 
(or  28  and  30  EC,  depending  on  the  case),  taking 
account of the undeniable deterrent effect of such 
regulatory activity on recourse to providers of med-
ical  services  established  in  a  Member  State  other 
than  the  state  of  affiliation  (or  on  the  purchase  of 
medical  products  in  this  state)  (abovementioned 
judgments Decker, para. 36, and Kohll, para. 35) (205).

The  real  problem  raised  by  this  situation  is  the 
admissibility  of  the  evidence  advanced  with  regard 
both to the protection of public health (in particu-
lar, the need to guarantee insured persons access to 
high-quality care as well as a balanced and acces-
sible medical and hospital service) and to pressing 
reasons of general interest (in particular, the need to 
maintain the financial balance of the social security 
system and thus to monitor health expenditure in 
order to respond in particular to the requirements 
of national solidarity towards the most vulnerable).

Admittedly,  it  will  be  recalled  that  objectives  of  a 
purely  economic  nature  cannot  justify  a  barrier  to 
the fundamental principle of free provision of serv-
ices (see, in this sense, Cases C-398/95 SETTG [1997] 
ECR  I-3091,  para.  23,  and  Kohll,  abovementioned, 
para.  41).  However,  in  particular  to  the  extent  to 
which  this  might  have  global  consequences  on 
the  protection  of  public  health,  a  risk  of  serious 
damage to the financial balance of the social secu-
rity  system  may  constitute  an  imperative  reason 
of  general  interest  liable  to  justify  such  a  barrier 

205(

)  The Stamatelaki judgment, abovementioned, called into question the 
Greek legislation insofar as it excluded meeting the cost of hospital 
care  in  a  private  medical  care  establishment  located  in  another 
Member  State,  with  the  exception  of  hospital  care  provided  to 
children under 14 years of age, although a patient affiliated in Greece 
receives care in a publicly or privately funded establishment without 
having to pay anything.

45

50 years of Social Security Coordination 

Past – Present – Future

(abovementioned judgments Decker, para. 39, Kohll, 
para. 41, and Stamatelaki, para. 30) (206).

In  this  regard,  the  prudent  approach  adopted  by 
the  case-law  of  the  CJ,  in  particular  in  the  Müller-
Fauré judgment (see paras 75 to 98), is based on a 
distinction between the medical services provided 
at the practitioner’s surgery and those dispensed in 
a hospital establishment.

(i) Regarding non-hospital services (207)

It must be acknowledged, according to the CJ, that by 
their nature, these services do not represent the essen-
tial part of the costs of health insurance of the Mem-
ber States. In any case, nothing seriously indicates that 

206(

)  To 

tell 

the 

the 

relevant 

truth,  behind  all 

this  debate  can  be 
insured 

found 
to 
in  kind  (or  to  a  national  health  service) 

the  difficulties  encountered  by 
a  benefit  system 
because of the establishment of waiting lists. 
Generally  speaking,  it  is  therefore  the  problem  of  the  means  of 
control of health expenditure which is posed. A system of subsidising 
providers  —  which  may,  moreover,  also  exist 
in  a  so-called 
reimbursement system — is generally based on the prior negotiation 
of  practical  tariffs,  of  the  nature  of  the  measures  and  requirements 
(choice  of  therapies,  medicines,  medical  products,  duration  of 
hospitalisation), in order to avoid exceeding that which is necessary 
and appropriate for recovery, the demand for healthcare being largely 
induced by the medical profession itself. The system of subsidies thus 
constitutes an efficient means for the Member States of monitoring 
and acting on the financial balance of their health insurance system.  
There  are  obviously  other  means,  undoubtedly  more  radical,  of 
limiting  expenditure,  to  wit  reducing  reimbursement  rates  or 
decreasing  the  volume  of  measures  and  requirements  undertaken. 
However, recourse to such means is based on transferring additional 
expenses  to  those  insured,  which  results  in  making  access  to 
healthcare  more  difficult  for  categories  of  insured  persons  on  low 
incomes as well as in decreasing the level of health protection. 
It follows from this that the abolition of the condition of subsidisation 
for  the  provision  of  services  abroad  raises  a  real  problem  in  terms 
of  monitoring  the  volume  of  expenditure.  But  could  it  be  seriously 
detrimental to the financial balance of the national health insurance 
systems  considered  and  have  consequences  for  the  global  level  of 
protection  of  public  health  and  the  degree  of  national  solidarity? 
That  is  the  real  question,  bearing  in  mind  that  purely  economic 
considerations  cannot  ever,  as  such, 
justify  a  barrier  to  the 
fundamental principle of free provision of services.

207(

)  See 

in  this  regard  the  abovementioned  Decker  and  Kohll 
judgments,  which  involve  a  claim  for  reimbursement  addressed 
to  the  competent  fund  in  Luxembourg,  respectively,  for  a  pair  of 
spectacles purchased on prescription issued by an ophthalmologist 
established  on  national  territory,  from  an  optician  established  in 
Belgium and for orthodontic treatment performed in Germany. 
But above all it is the Müller-Fauré judgment which presents precise 
reasons in this regard. The facts in this last case are as follows: 
•		Ms	 Müller	 had	 asked	 the	 health	 insurance	 fund	 in	 Zwijndrecht	
to  pay  for  dental  treatment  (the  placing  of  six  crowns  and  one 
fixed  bridge  prosthesis  in  the  upper  jaw)  which  she  received 
during her holidays, in October/November 1994, in Germany;  
•		Ms	van	Riet,	who	had	been	suffering	from	pains	in	her	right	wrist	
since  1985,  had  asked  the  health  insurance  fund  in  Amsterdam  to 
pay  for  an  arthroscopy  and  a  resection  of  the  ulna  which  she  had 
undergone, in May 1993, in Belgium. The preparation, execution and 
follow-up of these operations took place partly in hospital and partly 
outside any hospital infrastructure.

‘removal of the requirement for prior authorisation for 
that type of care would give rise to patients travelling 
to other countries in such large numbers, despite lin-
guistic barriers, geographic distance, the cost of stay-
ing abroad and lack of information about the kind of 
care provided there, that the financial balance of the 
Netherlands social security system would be seriously 
upset and that, as a result, the overall level of public 
health protection would be jeopardised ‘which might 
constitute proper justification for a barrier to the fun-
damental  principle  of  freedom  to  provide  services’ 
(para. 95 of the Müller-Fauré judgment).

Furthermore, the CJ continues, ‘care is generally provid-
ed near to the place where the patient resides, in a cul-
tural environment which is familiar to him and which 
allows him to build up a relationship of trust with the 
doctor  treating  him.  If  emergencies  are  disregarded, 
the  most  obvious  cases  of  patients  travelling  abroad 
are in border areas or where specific conditions are to 
be treated. Furthermore, it is specifically in those areas 
or in respect of those conditions that the Netherlands 
sickness funds tend to set up a system of agreements 
with foreign doctors, as the observations submitted to 
the Court reveal’ (para. 96 of the same judgment). Those 
various factors seem likely, according to the CJ ‘to limit 
any financial impact on the Netherlands social security 
system of removal of the requirement for prior authori-
sation in respect of care provided in foreign practition-
ers’ surgeries’ (para. 97 of the same judgment).

(ii) Regarding hospital services (208)

The  CJ  accepted  that  because  of ‘certain  very  dis-
tinct  characteristics’  presented  by  the  medical 
services provided in a hospital, the system of prior 

(

208
) 

In  this  regard,  above  all,  reference  is  made  to  the  Smits  and 
Peerbooms judgment, abovementioned, with regard to the refusal by 
a Dutch health insurance fund to reimburse hospital costs incurred in 
Germany and in Austria because satisfactory and adequate treatment 
of the illness in question was available in the Netherlands. Ms Smits 
suffered  from  Parkinson’s  disease  and  had  received  treatment  at  a 
clinic in Germany; Mr Peerbooms had fallen into a coma following a 
road  traffic  accident  and  had  been  transferred  to  a  clinic  in  Austria 
in  a  vegetative  state;  put  another  way,  the  Müller-Fauré  judgment, 
abovementioned;  as  well  as  the Watts  judgment,  abovementioned, 
in  which  the  CJ  was  led  more  particularly  to  interpret  Article  22  of 
Regulation  (EEC)  No  1408/71  and  Article  49  EC  in  the  context  of  a 
national health system.

46

 
 
 
 
 
authorisation  is  justified.  Indeed,  ‘the  number  of 
hospitals, their geographical distribution, the mode 
of their organisation and the equipment with which 
they are provided, and even the nature of the medi-
cal services which they are able to offer, are all mat-
ters for which planning must be possible’ (Smits and 
Peerbooms judgment, para. 76), in order to guaran-
tee ‘sufficient and permanent access to a balanced 
range’ of high-quality care and to ‘control costs and 
to prevent, as far as possible, any wastage’ (para. 79 
of the same judgment): ‘… it is clear that, if insured 
persons  were  at  liberty,  regardless  of  the  circum-
stances, to use the services of hospitals with which 
their  sickness  insurance  fund  had  no  contractual 
arrangements, [...] all the planning which goes into 
the contractual system [...] would be jeopardised at 
a stroke’ (para. 81) (209).

This is therefore a justification drawn from the pro-
tection of public health and, more particularly, from 
the  necessity  to  ensure  a  balanced  and  accessible 
hospital medical service to all those affiliated which 
makes  the  barrier  to  the  free  provision  of  service 
constituted by the requirement for prior authorisa-
tion compatible with Article 49 EC.

However,  authorisation  may  only  be  refused  for 
objective reasons, known in advance, in the absence 
of any arbitrary behaviour on the part of the nation-
al authorities (210).

Among these reasons, according to the CJ, there is 
the  possibility  for  the  patient  to  obtain  treatment 
which  is  the  same  or  equally  effective  ‘without 
undue delay’ on the territory of the competent state 
(see para. 103 of the judgment). But must it, in this 
regard, base itself on purely objective elements of a 

211(
) 

(

(

209

)  Here we find again in brief the considerations developed by Advocate 
General Tesauro in his conclusions in the Kohll and Decker cases.

210

)  The preceding considerations were reiterated in the Watts judgment, 
abovementioned,  para.  100  et  seq.  In  this  judgment,  the  CJ 
denounced  the  fact  that  the  regulations  concerned  relating  to  the 
NHS  did  not  specify  the  criteria  for  the  grant  or  refusal  of  the  prior 
authorisation  necessary  for  reimbursement  of  the  cost  of  hospital 
treatment provided in another Member State, and therefore do not 
circumscribe  the  exercise  of  the  national  competent  authorities’ 
discretionary power in that context, making it difficult to exercise any 
judicial review (para. 118).

Sean Van Raepenbusch

medical nature, with regard to the probable devel-
opment of the illness, or may other more subjective 
factors be taken into account, such as the degree of 
pain, the nature of the handicap, the personal situa-
tion of the party concerned, or the duration as such 
of the delay in obtaining care on the territory of the 
competent state?

The  Smits  and  Peerbooms  judgment  specified  in 
para. 104 that the national authorities are required 
‘to  have  regard  to  all  the  circumstances  of  each 
specific  case  and  to  take  due  account  not  only  of 
the  patient’s  medical  condition  at  the  time  when 
authorisation is sought but also of his past record’. 
The  Müller-Fauré  judgment  provides  two  further 
important particulars:

•	

•	

On  the  one  hand,  among  the  circumstances 
characterising  each  actual  case  which  the 
health  insurance  fund  has  to  take  into  account 
there  is  the  ‘degree  of  pain’  or  ‘the  nature  of 
the  patient’s  disability’  which  might,  for  exam-
ple,  make  it  impossible  or  extremely  difficult 
for  him  to  carry  out  a  professional  activity  
(para.  90).  The  CJ  thus  upholds  a  particularly 
broad interpretation of the notion of the patient’s 
‘medical history’ (211).
On  the  other  hand,  ‘a  refusal  to  grant  prior 
authorisation  which  is  based  not  on  fear  of 
wastage  resulting  from  hospital  overcapacity 
but solely on the ground that there are waiting 
lists on national territory for the hospital treat-
ment concerned, without account being taken 
of  the  specific  circumstances  attaching  to  the 

In this regard, it is interesting to observe that in its Inizan judgment 
(abovementioned,  para.  46),  the  CJ  transposed  in  the  area  of 
Article  22(2)(2)  of  Regulation  (EEC)  No  1408/71,  which  specifically 
provides  that  the  health  insurance  fund  of  the  competent  state 
may  not  refuse  to  grant  authorisation  when  such  treatment 
cannot  be  given  within  the  time  normally  necessary  for  obtaining 
the  treatment  in  question  on  national  territory  taking  account  of 
the  person  concerned’s  current  state  of  health  and  the  probable 
course  of  the  disease,  the  analysis  which  the  CJ  adopted  within 
the application framework of Articles 49 EC and 50 EC, in the Smits 
and  Peerbooms  and  Müller-Fauré  judgments  (see  also,  in  this 
sense, Watts judgment, abovementioned, paras 59 to 64).  
If  that  is  the  case,  the  CJ  specified  that  Article  22(2)  of  Regulation 
(EEC) No 1408/71 does not intend in any way to limit the hypotheses 
in which authorisation can be obtained. The Member States are thus 
free  to  envisage  the  issue  of  authorisations  even  in  the  hypothesis 
where the conditions referred to in Article 22(2)(2) are not met. 

47

 
50 years of Social Security Coordination 

Past – Present – Future

patient’s medical condition, cannot amount to 
a  properly  justified  restriction  on  freedom  to 
provide services’. For the rest, the CJ accepts in 
this regard that a waiting time which is too long 
or  abnormal  would  be  more  likely  to  restrict 
access to balanced, high-quality hospital treat-
ment (para. 92 in fine).

In the Watts judgment, abovementioned (212), the CJ 
certainly  admitted  that  national  authorities  were 
right  to  institute  a  system  of  waiting  lists  in  order 
to manage the supply of treatment and to set pri-
orities  on  the  basis  of  the  available  resources  and 
capacities. However, two conditions must be met in 
order to refuse the reimbursement of care provided 
in another Member State.

•	

•	

The  waiting  time  must  not  exceed  the  period 
which is acceptable in the light of an objective 
medical assessment, ‘in the light of his medical 
condition and the history and probable course 
of his illness, the degree of pain he is in and/or 
the nature of his disability at the time when the 
authorisation is sought’.
The  setting  of  waiting  times  should  be  done 
flexibly and dynamically, so that ‘the period ini-
tially notified to the person concerned may be 
reconsidered in the light of any deterioration in 
his state of health’ (paras 68 and 69).

This  possibility  of  refusal  is,  according  to  the  CJ, 
because ‘the resulting patient migration would be 
liable to put at risk the competent Member State’s 
planning  and  rationalisation  efforts’  (para.  71),  as 
well as to prevent any ‘exodus of patients’ who, hav-
ing sufficient resources for that purpose, might seek 
to go to another Member State to obtain the hospi-
tal treatment (para. 77). If this is the case, to refuse 
authorisation, a Member State may not oppose the 
fact that the cost of the hospital treatment is more 
expensive in the state of stay (para. 73).

212(

)  Certainly, with regard to the condition stipulated in Article 22(2)(2) of 
Regulation (EEC) No 1408/71, but we know that this condition must 
be interpreted in the same way in the context of Article 49 EC (see 
note 55 at the bottom of the page).

48

(iii) Regarding the relevance of the fundamental 
characteristics of the health insurance scheme in 
question

By  tracing  the  guidelines  recalled  below,  the  CJ 
has always refused to take into account the char-
acteristics of the applicable national health insur-
ance scheme.

This question has been at the centre of debate in the 
Müller-Fauré case. In particular, the Dutch, Spanish 
and Norwegian governments, as well as the Advo-
cate General D. Ruiz Jarabo-Colomer (conclusions, 
para.  47  et  seq.),  have  underlined  the  freedom  of 
the Member States to establish the social security 
system  of  their  choice.  Now,  in  the  event,  in  the 
absence  of  prior  authorisation,  insured  persons 
were  free  to  contact  non-contractual  care  provid-
ers, such that it is the benefit scheme in kind itself, 
the operation of which depends essentially on the 
system of contracting, the existence of which would 
be  threatened.  Furthermore,  national  authorities 
who were familiar with such a scheme or a national 
health service would be forced to introduce mech-
anisms of reimbursement into the way they organ-
ised  access  to  healthcare,  to  the  extent  to  which, 
instead of benefiting from free health benefits on 
national  territory,  insured  persons  would  have  to 
advance the necessary amounts to pay for services 
from which they had benefited and wait a certain 
time  before  obtaining  reimbursement.  Thereby, 
the  Member  States  concerned  would  undergo  a 
forced  conversion  to  a  system  of  reimbursement, 
while waiving the principles and economy of their 
insurance scheme.

The CJ has not accepted this argument.

Already  in  the  Smits  and  Peerbooms  judgment  it 
does  not  appear  to  have  exactly  attached  crucial 
importance to the type of organisation of the health 
insurance in question.

Sean Van Raepenbusch

In  the  Müller-Fauré  judgment,  on  the  contrary,  it 
underlines that ‘the achievement of the fundamen-
tal  freedoms  guaranteed  by  the Treaty  inevitably 
requires  Member  States  to  make  some  adjust-
ments to their national systems of social security. 
It does not follow that this would undermine their 
sovereign powers in this field. It is sufficient in this 
regard to look to the adjustments which they have 
had  to  make  to  their  social  security  legislation  in 
order  to  comply  with  Regulation  No  1408/71,  in 
particular with the conditions laid down in Article 
69  thereof  regarding  the  payment  of  unemploy-
ment  benefit  to  workers  residing  in  the  territory 
of other Member States when no national system 
provided  for  the  grant  of  such  benefits  to  unem-
ployed  persons  registered  with  an  employment 
agency in another Member State’ (para. 102).

Furthermore,  it  must  be  acknowledged  that  a 
medical  service  does  not  cease  to  be  a  provision 
of  services  because  it  is  paid  for  by  a  national 
health service or by a system providing benefits in 
kind.  Such  was  nevertheless  the  thesis  defended 
in the Smits and Peerbooms case by various Mem-
ber  States  which  contested  that  hospital  services 
could,  in  particular  when  they  are  provided  free 
of charge, by virtue of the applicable health insur-
ance  scheme,  constitute  an  economic  activity  in 
the sense of Article 60 of the Treaty (now Article 50 
EC). The CJ judged, in this regard, ‘that a medical 
service provided in one Member State and paid for 
by the patient should not cease to fall within the 
scope of the freedom to provide services guaran-
teed by the Treaty merely because reimbursement 
of the costs of the treatment involved is applied for 
under another Member State’s sickness insurance 
legislation  which  is  essentially  of  the  type  which 
provides for benefits in kind’ (Smits and Peerbooms 
judgment, para. 55).

paid by the latter). This was precisely the require-
ment of a prior authorisation to benefit from pay-
ment  of  these  treatments  which  constituted  the 
obstacle to the free provision of services, that is to 
say the ability to have recourse to a medical pro-
vider of one’s choice in a Member State other than 
the state of affiliation.

In any case, as the CJ also recalled, the Treaty ‘does 
not require the service to be paid for by those for 
whom it is performed (Case 352/85 Bond van Adver-
teerders  and  Others  [1988]  ECR  I-2085,  para.  16,  
and  Cases  C-51/96  and  C-191/97  Deliège  [2000] 
ECR I-2549, para. 56)’ (para. 57). It is enough that 
the services are provided normally for remunera-
tion,  that  constituting  its  economic  counterpart. 
‘In the present cases, the payments made by the 
sickness  insurance  funds  under  the  contractual 
arrangements provided for by the ZFW, albeit set 
at a flat rate, are indeed the consideration for the 
hospital  services  and  unquestionably  represent 
remuneration  for  the  hospital  which  receives 
them  and  which  is  engaged  in  an  activity  of  an 
economic  character’  (Smits  and  Peerbooms  judg-
ment, para. 58).

These  considerations  will  be  reiterated  in  sub-
stance  in  the  Müller-Fauré  judgment,  which  con-
cludes, in para. 103, that there is thus no need, from 
the perspective of freedom to provide services, to 
draw  a  distinction  by  reference  to  whether  the 
patient pays the costs incurred and subsequently 
applies  for  reimbursement  thereof  or  whether 
the sickness fund or the national budget pays the 
provider directly. In the same sense, whether the 
service  is  essentially  funded  by  the  compulsory 
contributions  of  the  worker,  the  employer  or  by 
budget  contributions  is  irrelevant  when  rating 
the benefit.

What was at issue in these last cases was the medi-
cal  treatment  provided  in  another  Member  State 
and  which  had  given  rise  to  the  direct  payment 
of establishments providing the treatment by the 
patient  (or,  in  any  case,  which  should  have  been 

The  CJ  has  reconfirmed  this  analysis  in  the  Watts 
case:  after  having  ascertained  that  Ms  Watts  had 
paid the French hospital directly in which she had 
received  treatment,  it  considers  that  the  circum-
stance  that  the  reimbursement  of  the  hospital 

49

50 years of Social Security Coordination 

Past – Present – Future

treatment in question is subsequently sought from 
a  national  health  service  such  as  that  in  question 
does  not  mean  that  the  rules  on  the  freedom  to 
provide  services  guaranteed  by  the Treaty  do  not 
apply (paras 88 and 89).

It  is  in  the  light  of  these  prior  considerations  that 
in  the  Müller-Fauré  case  the  CJ  has  examined  the 
argument based on a change in the essential char-
acteristics of the access system to healthcare in the 
Netherlands. Three reasons enabled them to reject 
this argument.

provided  that  those  amounts  are  based  on 
objective, non-discriminatory and transparent 
criteria’ (para. 107) (213).

To  conclude,  the  requirements  of  the  free  move-
ment of persons undoubtedly imply adjustments to 
national sickness insurance schemes which cannot 
as such be considered as attacks on the sovereignty 
of the Member States, the latter retaining complete 
control  of  the  extent  of  guaranteed  cover  and  of 
the  degree  of  national  solidarity  which  they  wish 
to  guarantee,  in  particular,  in  favour  of  the  most 
underprivileged and most vulnerable (214).

•	

•	

•	

Already  ‘when  applying  Regulation  (EEC)  No 
1408/71,  those  Member  States  which  have 
established a system providing benefits in kind, 
or even a national health service, must provide 
mechanisms for ex post facto reimbursement in 
respect of care provided in a Member State oth-
er than the competent state’ (para. 105; see also 
Watts  judgment,  abovementioned,  para.  74). 
Such  shall  be  the  case  where  it  has  not  been 
possible  to  complete  formalities  during  the 
person  concerned’s  stay  in  this  last  state  (see 
Article 34 of Regulation (EEC) No 574/72), or if 
the competent state has specifically authorised 
access to treatment abroad in accordance with 
Article 22(1)(c) of Regulation (EEC) No 1408/71.
The  cover  guaranteed  to  the  insured  person 
who goes to another Member State to receive 
treatment  is,  in  any  case,  that  of  the  sickness 
insurance  scheme  of  the  state  of  affiliation, 
according to the conditions on which benefits 
are granted, insofar as they are neither discrim-
inatory  nor  an  obstacle  to  freedom  of  move-
ment of persons (para. 106).
Finally, ‘nothing precludes’, the CJ observes, ‘a 
competent  Member  State  with  a  benefits  in 
kind system from fixing the amounts of reim-
bursement which patients who have received 
care  in  another  Member  State  can  claim, 

50

(

213
)	

•		In	this	regard,	the	Watts	judgment,	abovementioned,	provides	the	
following  particulars  with  regard  to  the  specific  characteristics  of 
the NHS. 
In  the  hypothesis  where  the  legislation  of  the  host  Member  State 
does  not  provide  for  reimbursement  in  full  of  the  cost  of  hospital 
treatment in that state, in order to place the patient in the position 
he  would  have  been  in  ‘had  the  national  health  service  with 
which  he  was  registered  been  able  to  provide  him  free  of  charge, 
within  a  medically  acceptable  period,  with  treatment  equivalent 
to  that  which  he  received  in  the  host  Member  State’  implies,  for 
the  competent  institution,  in  addition,  to  reimburse  the  person 
concerned  the  difference  between,  on  the  one  hand,  ‘the  cost, 
objectively quantified, of that equivalent treatment’ and, on the other 
hand, the amount reimbursed by the institution of the state of stay, 
where the first amount is greater than the second (para. 131). 
•		However,	the	NHS	is	not	under	an	obligation	‘in	all	circumstances	
to  cover  the  full  amount  of  the  difference  between  the  cost  of  the 
hospital  treatment  provided  in  the  host  Member  State  and  that  of 
the  reimbursement  by  the  institution  of  that  Member  State  under 
that  state’s  provisions,  including  where  the  cost  of  that  treatment 
is  greater  than  the  cost  of  equivalent  treatment  in  the  competent 
Member State’ (para. 132). It is therefore incumbent on the NHS to fix 
a price for hospital treatments, even if national regulations are based 
on free issue and do not provide for any scale of reimbursement. But, 
to tell the truth, as has been seen, tariffs are already applied to foreign 
patients who come to receive treatment on British territory.  
•		Finally,	 not	 to	 miss	 anything,	 it	 should	 be	 added	 that	 the	 Watts	
judgment has quite a restrictive definition of the notion of sickness 
benefit  in  kind,  in  the  meaning  of  Article  22  of  Regulation  (EEC) 
No  1408/71,  concerning  hospital  services:  these  services  must  be 
‘medical services strictly defined’ or ‘inextricably linked costs relating 
to the patient’s stay in the hospital for the purposes of his treatment’, 
which  excludes  the  cost  of  travel  and  any  accommodation  other 
than in the hospital itself (paras 136 and 138; see also Case C-466/04 
Acereda Herrera [2006] ECR I-5341). If that is the case, if the state of 
affiliation provides for the reimbursement of such costs for treatments 
provided on national territory, it cannot, without infringing Article 49 
EC, exclude reimbursement of such costs where hospital treatment is 
provided in a hospital in another Member State subject to the grant 
of prior authorisation (para. 142). 

(

214

)  To this end, the Commission has drawn up a proposal for a directive 
of  the  European  Parliament  and  of  the  Council  on  the  application 
of  patients’  rights  in  cross-border  healthcare  (COM(2008)  414  final, 
2.7.2008),  containing,  among  other  things,  the  instruction  of  the 
jurisprudence of the CJ.

 
 
 
 
 
 
Sean Van Raepenbusch

d.  Preservation of rights in the process  

of being acquired

The benefit of numerous social security services is 
subject  to  the  completion  of  periods  of  employ-
ment, insurance or residence.

function  of  completed  periods  of  insurance.  This 
rule was laid down by several provisions of Regula-
tion (EEC) No 1408/71, relative to various branches 
of social security, in particular, regarding invalidity 
(Article 38(1)) and sickness (Article 18), branches to 
which the cases of Moscato and Klaus relate.

The  result  is  that  changing  country  of  employment 
or  residence  may  result  in  serious  detriment  for  the 
worker or his family members if, under the legislation 
of  the  competent  state,  the  person  concerned  has 
not  completed  the  qualifying  period  necessary  for 
the extension of the right to benefits, or, in particular, 
where long-term benefits are concerned, if under the 
various legislations of affiliation, he has not complet-
ed the required or adequate minimum periods which 
would  permit  him  to  benefit  in  full  from  a  pension 
comparable  to  that  which  he  would  have  had  if  he 
had spent his entire career in a single state.

Mr Moscato, an Italian national, had worked in Bel-
gium,  then  in  the  Netherlands;  he  then  became 
unemployed  in  Belgium  before  working  in  the 
Netherlands again. But two months later he had to 
stop  all  professional  activity  due  to  mental  illness. 
He  received  Dutch  sickness  benefits.  However,  the 
Dutch  body,  taking  as  its  basis  the  national  legisla-
tion  on  invalidity,  refused  to  grant  him  disability 
benefits because at the start of his last professional 
activity in the Netherlands, his state of health clearly 
portended the occurrence of his incapacity to work 
less than six months later.

The importance of the principle of the preservation 
of  rights  conferring  prospective  entitlement,  bor-
rowed from standard international law, is obvious. 
Its  implementation  requires  the  use  of  two  well-
known techniques: that of the aggregation of peri-
ods and that of pro-rata calculation of benefits.

Two  particularly  innovative  judgments  of  the  CJ 
have given the rule on the aggregation of periods 
of  insurance  (or,  if  applicable,  periods  of  employ-
ment or of residence), completed under the legisla-
tion of two or more Member States, a scope which 
significantly exceeds the issues of extension of the 
right to benefits and of calculation of the benefits 
for  which  it  was  originally  conceived:  the  cases 
concerned  are  Case  C-481/93  Moscato  [1995]  ECR 
I-3537 and Case C-482/93 Klaus [1995] ECR I-3560.

It will be recalled that the rule on aggregation prin-
cipally aims to guarantee a person who has worked 
in  a  Member  State  the  taking  into  account  of  this 
period in the country to which he or she goes, for 
the extension of a right to a social security benefit 
subject in this second state to a trial period require-
ment  or  to  determine  the  amount  where  that  is  a 

Was  the  body  entitled  to  take,  as  the  starting 
point  of  affiliation,  the  date  on  which  Mr  Moscato 
had  affiliated  himself  with  the  Dutch  regime,  thus 
excluding  previous  periods  of  affiliation,  complet-
ed  by  the  person  concerned  under  the  legislation 
of  another  Member  State? The  response  from  the 
CJ was negative: the rule on aggregation, laid down 
in  Article  51(a)  of  the Treaty  and  implemented  by 
Article 38(1) of Regulation (EEC) No 1408/71 in the 
field of invalidity insurance, directs the competent 
institutions to reason as if the worker’s entire career 
had been completed in one and the same state.

In  the  Klaus  judgment,  the  CJ  reiterates  this  inter-
pretation of the rule on aggregation, but this time 
with regard to sickness insurance.

Ms Klaus, a Dutch national, had worked in Spain, in 
the  Netherlands,  in  Spain  again,  then  from  Octo-
ber 1989, in the Netherlands. Scarcely 15 days after 
starting  this  new  activity  in  the  Netherlands,  she 
found  herself  completely  unable  to  work  because 
of  back  problems.  She  was  refused  the  sickness 
benefits  which  she  had  claimed  from  the  compe-
tent Dutch fund because, on 20 October 1989, the 

51

50 years of Social Security Coordination 

Past – Present – Future

date on which her insurance under the Dutch sick-
ness insurance scheme had started, she was already 
unfit to perform her job.

As  is  the  case  in  Article  38,  Article  18  of  the  regu-
lation  was  interpreted  as  obliging  the  competent 
institutions to also take account of periods of affili-
ation  completed  by  the  insured  person  under  the 
legislation  of  another  Member  State,  as  if  periods 
completed  under  the  legislation  applied  by  them 
were  involved,  in  particular,  where  the  legislation 
of  the  competent  state  sets  the  condition  for  the 
granting of sickness benefits that unfitness for work 
did not already exist at the time of affiliation.

This  jurisprudence  has  undoubtedly  contributed 
to ‘deterritorialising’  still  further  the  regulations  of 
the national social security schemes in favour of the 
accomplishment of the internal market.

e.  Obligation of cooperation in good 

faith (215)

The judgment delivered by the CJ in Case C-165/91 
Van Munster [1994] ECR I-4686 and, even more, that 
delivered in Case C-262/97  Engelbrecht [2000] ECR 
I-3721  shed  new  light  on  the  scope  of  the  obliga-
tions of the competent authorities of the Member 
States when they apply their national provisions on 
social  security  to  a  migrant  worker.  According  to 
the CJ, the application of national legislation to the 
migrant worker, operated in the same manner as to 
the permanently settled worker, may have unfore-
seen  repercussions  incompatible  with  the  aim  of 
Articles  39  to  42  EC.  It  shall  be  for  the  competent 
authorities  to  eliminate  these  consequences  or  to 
attenuate them as far as possible, by implementing 
all the means at their disposal and, in particular, by 
means of an interpretation of national law which is 
compatible  with  the ‘requirements  of  Community 
law’, in accordance with the principle of reasonable 
cooperation laid down in Article 10 EC.

(

215

)  See  our  study 

‘Le  devoir  de 

loyauté  dans 

l’ordre 

juridique 

communautaire’, Droit social, 1999, p. 908.

52

The  circumstances  of  the  Van  Munster  case  lend 
themselves to such an analysis. Thus, in the Nether-
lands, any married person of 65 years of age is enti-
tled  to  a  personal  pension  corresponding  to  50  % 
of the net minimum wage, increased by 50 % if she 
has a dependent spouse of less than 65 years of age 
(i.e. 100 % of the net minimum salary). In Belgium, 
by  contrast,  the  retirement  pension  is  calculated 
on the basis of periods of insurance up to a limit of 
75 % of gross compensation for the worker whose 
spouse has ceased all professional activity and does 
not  receive  a  pension  (‘family  pension’)  and  60  % 
for other workers (‘single rate pension’).

In this case, Mr Van Munster, after having received a 
Belgian retirement pension at the ‘family rate’ found, 
under Belgian legislation, that the ‘single rate’ was 
applied  to  him  when  his  spouse,  resident  in  the 
Netherlands  and  unemployed,  reached  the  age  of 
65  and  acquired  a  personal  pension  under  Dutch 
law (50 % of the net minimum wage), even though 
the  award  of  this  pension  had  not  resulted  in  any 
increase in the couple’s overall income (because it 
had been concomitant to a reduction on the same 
scale  of  the  husband’s  pension).  Faced  with  such 
consequences, the CJ judged that the obligation of 
cooperation in good faith ‘implies that (the Belgian 
authorities) should ascertain whether their legisla-
tion can be applied literally to migrant workers, in 
exactly  the  same  way  as  to  non-migrant  workers, 
without ultimately causing migrant workers to lose 
a social security advantage and, consequently, dis-
couraging them from actually exercising their right 
to freedom of movement’. When applying domestic 
law, the national court must ‘as far as is at all pos-
sible,  interpret  it  in  a  way  which  accords  with  the 
requirements of Community law’.

But  what  happens  when  ways  of  interpreting 
domestic law do not specifically permit interpreta-
tion ‘in a way which accords with the requirements 
of  Community  law’?  Must  the  national  judge  set 
aside the national provisions in question?

Sean Van Raepenbusch

According to the Simmenthal case-law (216), national 
courts  must  apply  Community  law  in  its  entirety 
and ‘set  aside  any  provision  of  national  law  which 
may conflict with it, whether prior or subsequent to 
the Community rule’ (para. 21). Must this principle 
be extended to the hypothesis where the domestic 
provision,  without  being  contrary  to  Community 
law, in certain circumstances creates a barrier to the 
free movement of workers, in particular when it is 
applied to a situation containing foreign elements 
resulting in the simultaneous application of the leg-
islation of that other Member State?

This  judgment  is  recorded  in  the  rules  of  general 
authority of the CJ relating to Article 10 EC. Indeed, 
it  follows  from  this  case-law  that  the  principle  of 
reasonable cooperation involves a specific obliga-
tion  for  the  Member  States  who  were  unable  to 
adhere to the obligation not to pursue a course of 
conduct or pass a bill contrary to Community law; it 
is incumbent on them, moreover, to ensure, includ-
ing  in  the  exercise  of  their  sovereign  powers,  the 
effectiveness of Community law and to guarantee 
the achievement of the aims of the Community, as 
a result of their belonging to the same.

The CJ replied, without hesitation, in its Engelbrecht 
judgment:

‘Where  application 
in  accordance  with  those 
requirements  is  not  possible,  the  national  court 
must  fully  apply  Community  law  and  protect  the 
rights  conferred  thereunder  on  individuals,  if  nec-
essary  disapplying  any  provision  in  the  measure 
application of which would, in the circumstances of 
the case, lead to a result contrary to Community law 
(see  analogously  Case  249/85  Albako  [1987]  ECR 
I-2345, paras 13 et seq.)’ (para. 40; our italics).

Such was this case: the loss of a social advantage 
to  the  detriment  of  a  worker  merely  through  the 
award to his spouse of a benefit of the same kind, 
under  the  legislation  of  another  Member  State, 
although  this  circumstance  had  not  given  rise  to 
any increase in overall household income (because 
it  was  concomitant  with  a  reduction  of  the  same 
amount  in  the  personal  pension  received  by  the 
worker in that same state) was ‘liable to constitute 
an  obstacle  to  freedom  of  movement  within  the 
Community’, established in Article 39 EC (paras 41 
and 42) (217).

(

(

216

)  Case 106/77 Simmenthal [1978] ECR I-629.

217

)  See  also  in  this  sense  Case  C-290/00  Duchon  [2001]  ECR  I-3567, 
where the CJ judged that the loss of a social advantage for a worker 
through the award to his spouse of a benefit of the same kind under 
the legislation of another Member State, although this circumstance 
had not given rise to any increase in the couple’s overall income, was 
a barrier to the exercise of the right of freedom of movement within 
the Community established in Article 39 EC.

Now,  Community  law  in  its  entirety  sometimes 
requires of a national judge, under the principle of 
reasonable cooperation, that he set aside a nation-
al  law,  the  application  of  which  affects  or  forms  a 
barrier to the achievement of the objectives of the 
Treaty.  The  CJ  has  made  pronouncements  in  this 
sense on several occasions; thus, with regard to the 
procedural  autonomy  of  the  Member  States,  such 
a  national  rule  had  to  be  set  aside  by  the  judge 
because  it  prevented  the  implementation  of  the 
procedure  laid  down  in  Article  234  EC (218),  where 
because, taking into account the particular circum-
stances  of  the  case,  it  had  the  effect  of  making  it 
excessively difficult to exercise rights conferred by 
the Community legal system (219); in the Factortame 
case (220), the national judge was invited, in order to 
guarantee the full efficacy of the decision of a court 
to  intervene  concerning  the  existence  of  rights 
drawn from the Community legal order, to set aside 
the application of a principle of English law accord-
ing  to  which  interim  measures  cannot  be  taken 
against the Crown.

Certainly, in the Van Munster and Engelbrecht cases, 
it was the application of a national standard, linked 
to that of the national legislation of another Member 
State, which was the origin of the barrier. It involved 
the  same  type  of  barrier  to  the  free  movement  of 
workers,  resulting  from  the  disparity  of  national 

218(

)  See Case 166/73 Rheinmühlen [1974] ECR I-32, paras 2 and 3.

219(

)  See Case C-312/93 Peterbroeck [1991] ECR I-4599.

220(

)  See Case C-213/89 [1990] ECR I-2433.

53

50 years of Social Security Coordination 

Past – Present – Future

social security schemes, which it was incumbent on 
the Council to eliminate by means of coordination 
in accordance with Article 42 EC. Nevertheless the 
fact remains that the duty to act in good faith which 
is  incumbent  on  the  Member  States  includes  the 
obligation  for  them  to  do  everything  within  their 
power to achieve the objectives of the Treaty, even 
in the absence of implementing measures from the 
Community institutions, in particular where the cir-
cumstances reveal that such action is necessary in 
the  interest  of  the  Community  and  that  it  has  not 
undertaken this (221).

All  the  more  so  since,  taking  account  of  the  con-
stant development of national social security legis-
lations, it is inevitable that Community regulations 
are  unable  to  guarantee,  in  all  circumstances,  the 
absence  of  any  obstacle  to  the  free  movement  of 
workers resulting from disparities between nation-
al legislations.

III.  ConCluSIonS

This overview of the case-law of the CJ clearly reveals 
the decisive influence of the latter on the construc-
tion of a ‘social Europe’, in one of the essential ele-
ments  of  what  is  commonly  called  the  European 
social model, even if, in certain aspects, the expres-
sion is slightly abusive (222), namely social security. It 
is also the fruit of a permanent and constructive dia-
logue between the CJ and the national courts called 
upon  to  take  a  position,  primarily  on  questions  of 
interpretation and application of Community regu-
lations  on  the  matter  which  is  subject,  it  must  be 
recognised,  to  a  certain  esoterism. This  dialogue  is 
all the more crucial because national judges, ‘faced 
with the final stage of application of the rule’, in the 
felicitous  expression  of  Louis  Dubouis (223),  are  the 
guarantors of respect for the rights which European 
citizens,  as  well  as  of  nationals  of  third  countries, 
obtain from the Community legal order.

(

221

)  See, in this sense, Case 32/79 Commission v United Kingdom [1980] 
ECR  I-2403,  paras  10,  15  and  25,  where  the  CJ  considered  that  the 
United Kingdom was required, by virtue of former Article 5 (now Article 
10), to take the necessary measures to guarantee the conservation of 
fish resources in the zone considered, which constitutes one of the 
objectives  of  the Treaty,  and  this  before  the  expiry  of  the  period  of 
transition  provided  for  by  the  Act  of  Accession  (in  particular,  when 
the Community fails, because of persistent differences of view within 
the Council, to adopt a specific policy), but before the power in the 
matter  belongs  exclusively  to  the  Community.  Admittedly,  the  CJ 
has  set  strict  limits  on  the  adoption  of  national  measures  so  as  to 
preserve the exercise of Community powers, but the principle itself 
of an obligation of the Member State has been recognised by the CJ 
under Article 10 EC.

54

(

222

)  See  our  study ‘Les  services  sociaux  en  droit  communautaire  ou  la 
recherche  d’un  juste  équilibre  entre  l’économique  et  le  social’,  Les 
services  d’intérêt  économique  général  et  l’Union  européenne  (eds: 
J.- V. Louis et S. Rodrigues), Bruylant, 2006, pp. 99–100.

(

223
) 

‘La responsabilité de l’État pour les dommages causés aux particuliers 
par la violation du droit communautaire’, RFDA, 1992, p. 9.

AChiE vEmENTS  OF 50 yEARS OF EuROPEAN 
SOCiAL  SECuRiT y COORdiNATiON

Rob Cornelissen

Rob Cornelissen
European Commission,  
‘Social protection and integration’ Directorate (224)

Rob Cornelissen is a Dutch national. He graduated from the Law faculty of the 
Catholic University of Nijmegen (Netherlands) and obtained his Ph.D at this Uni-
versity in March 1984. 

He has been working for DG EMPL of the European Commission since Septem-
ber 1983.

Between 1 May 1990 and 1 September 2008 he has been Head of different units 
in DG EMPL.

Since 1 September 2008 he has been Advisor at the Directorate “Social protec-
tion and integration” in DG EMPL.

He is the author of numerous articles and co-author of several books on issues 
concerning free movement of workers and coordination of social security.

I. 

InTroduCTIon 

In  a  limited  number  of  pages,  it  is  not  possible  to 
deal with all achievements of the coordination sys-
tem since 1958, the year of adoption of Regulations 
Nos  3  and  4.  Making  a  choice  always  means  that 
a  number  of  issues,  even  important  ones,  are  not 
dealt with. Indeed, this presentation does not have 
the pretension of drawing a complete picture of all 
the  achievements  in  the  coordination  system  dur-
ing the last 50 years. In my contribution I will focus 
on the achievements in the following fields:

•	

•	

•	

the  impact  of  the  coordination  system  on  the 
principle of territoriality;
the wide scope of persons covered by the pro-
tection offered by the coordination system;
the  adaptability  of  the  material  scope  of  the 
coordination  system 
in 
national legislation;

to  developments 

•	

•	

•	

the  interaction  between  court  and  legislature 
having  led  to  a  separate  coordination  system 
for special non-contributory benefits;
the  great  impact  of  the  principle  of  equal  
treatment;
the  coordination  system  as  the  first  and  still 
very  important  instrument  for  cross-border 
healthcare.

The  emphasis  of  my  presentation  will  be  on  the 
positive  side  of  what  has  been  achieved  during 
the last 50 years. This does not mean that I am not 
aware of the challenges ahead of us. I will deal with 
a number of these challenges in the conclusions.

Achievements in spite of its limits

Before  examining  the  aforementioned  points,  it  is 
useful to recall that we have to live with the limits 
resulting from the objective of Article 42 EC.

(

224

)  Dr  Rob  Cornelissen  is  an  advisor  in  the  ‘Social  protection  and 
integration’ Directorate of the European Commission in Brussels. This 
article only reflects the personal views of the author.

As Simon Roberts explained in his contribution, the 
regulations  based  on  this  article  only  coordinate 

55

50 years of Social Security Coordination 

Past – Present – Future

the  various  social  security  schemes.  They  do  not 
and cannot affect the disparities between the vari-
ous schemes, for instance concerning the notion of 
‘family members’ (registered partnerships, same-sex 
marriages, age limits for children as a condition for 
entitlement  to  family  benefits,  etc.),  the  notion  of 
‘invalidity’ (a person having worked in three Mem-
ber States is considered as fully ‘invalid’ in Member 
State A, partially ‘invalid’ in Member State B and not 
‘invalid’ at all in Member State C), or age conditions 
for  entitlement  to  old-age  pensions.  As  the  Court 
of Justice (CJ) has said, these disparities could have 
as  an  effect  that  a  person,  who  has  moved  from 
one Member State to another, is at a disadvantage 
compared with a person who has stayed his whole 
career in a single Member State (225). It is sometimes 
very difficult to explain these limits of ‘coordination’ 
to the citizens of Europe.

II.  The ImPaCT oF The 

CoordInaTIon SySTem 
on The PrInCIPle oF  
TerrITorIalITy

The  exclusive  application  of  national  law  could 
have  harmful  consequences  for  people  mov-
ing  from  one  Member  State  to  another.  In  gen-
eral,  national  social  security  legislation  does  not 
take into account the specific situation of people 
who  have  worked  or  resided  in  another  state (226). 
National  legislations  organise  their  social  secu-
rity schemes according to national objectives. For 
example, they confine their social security schemes 
to people who work or reside in their territory; they 
guarantee  benefits  to  those  who  have  worked  or 
resided  for  a  certain  period  of  time  under  their 
country’s  social  security  scheme;  they  guarantee 
family benefits to insured people whose children 
reside  within  their  territory,  and  they  guarantee 

(

225
) 

Judgment  of  19  March  2002,  Joined  Cases  C-393/99  and  C-394/99 
Hervein and Hervillier [2002] ECR I-2829.

(

226

)  Of  course,  this  situation  has  some  exceptions,  such  as  provisions 
aimed  at  avoiding  the  accumulation  of  benefits  due  under  the 
legislation  of  the  state  concerned  with  benefits  due  under  the 
legislation of another state! 

the  payment  of  certain  benefits  to  those  who 
reside  on  the  territory  of  their  country.  Generally 
speaking,  when  the  ‘principle  of  territoriality’  is 
discussed (227), reference is made to the freedom of 
Member States to use these territorial elements in 
defining the scope of their social security schemes 
and in determining the qualifying conditions and 
the conditions of payment of benefits.

The Community regulations aim to rectify the effects 
of  this  ‘principle  of  territoriality’ (228)  on  migrant 
workers and the members of their families.

This purpose has been achieved by numerous pro-
visions  in  the  regulations  which  have  been  devel-
oped  and  strengthened  over  the  years,  such  as 
the  exclusive (229)  and  mandatory  effect (230)  of  the 
rules  on  conflicts  of  law,  the  aggregation  of  peri-
ods  of  insurance  for  entitlement  to  benefits (231), 
the  waiving  of  residence  clauses (232)  and  cross-
border  recognition  of  facts (233).  As  Simon  Roberts 
made clear, from the very beginning the goal of the 

(

(

(

(

(

(

(

227

)  Werner  Tegtmeier,  ‘Erfahrungen  und  Vorstellungen  aus  deutscher 
Sicht’,  Wechselwirkungen  zwischen  dem  Europäischen  Sozialrecht 
und dem Sozialrecht der Bundesrepublik Deutschland, Berlin, 1991.

228

)  Cornelissen,  R.  ‘The  principle  of  territoriality  and  the  Community 
regulations  on  social  security  (Regulations  1408/71  and  574/72)’, 
Common Market Law Review 1996, Vol. 33.

229

)  This  means  that  persons  to  whom  the  coordination  system  applies 
are subject to the legislation of a single Member State only: Article 
13(1) of Regulation (EEC) No 1408/71 and Article 11(1) of Regulation 
(EC) No 883/2004. The validity of this provision has been confirmed 
by the CJ: judgments of 12 June 1986, Case 302/84 Ten Holder [1986] 
ECR 1821; of 10 July 1986, Case 60/85 Luijten [1986] ECR 2365; and 
of 15 February 2000, Case C-34/98 Commission v France [2000] ECR 
I-995. However, in its recent judgment of 20 May 2008, Case C-352/06 
Bosmann  [2008]  ECR  I-3827,  the  CJ  ruled  that  the  Member  State  of 
residence, even if it is not the competent state, cannot be deprived 
of the right to grant child benefit to persons who are resident within 
its territory. Does this judgment mean the end of the exclusive effect 
of  the  rules  on  conflicts  of  law? The  judgment  is  not  entirely  clear 
on  this  point.  On  the  one  hand,  the  CJ  came  to  its  conclusion  that 
the state of residence cannot be deprived of its right to grant family 
benefits, even if it is not the competent state, because the provisions 
of Regulation (EEC) No 1408/71 must be interpreted in the light of the 
objectives of Article 42 EC. On the other hand, the CJ explicitly said 
that  Community  law  (not  only  the  regulation)  does  not  require  the 
German authorities to grant family benefits. 

230

)  This means that national affiliation conditions are overridden if their 
application is such as to deprive the Community rule on conflicts of 
law of all practical effect. A person, for instance, residing in a Member 
State but working in another state cannot be excluded from the scope 
of the social security scheme of the latter state for the sole reason of 
not  residing  there:  judgments  of  3  May  1990,  Case  C-2/89  Kits  van 
Heijningen [1990] ECR 755; and of 4 October 1991, Case C-196/90 De 
Paep [1991] ECR 4815.

231

)  Articles 6 and 61 of Regulation (EC) No 883/2004.

232

)  Articles 7 and 67 of Regulation (EC) No 883/2004.

233

)  Article 5 of Regulation (EC) No 883/2004.

56

Rob Cornelissen

regulations  has  been  to  remove  all  barriers  in  the 
sphere of social security which impede a genuinely 
free movement of workers. All the provisions of the 
regulations must be interpreted in the light of Arti-
cle 42 EC. This means, for instance, that the aggre-
gation  provisions  must  be  interpreted  broadly,  to 
cover also cases not directly governed by the letter 
of these provisions (234). This means sometimes that 
a provision has to be interpreted in a way that was 
not foreseen by the legislature (235).

In  a  European  Union  of  27  Member  States,  it  has 
become  almost  impossible  to  deal  with  all  the 
problems  that  could  possibly  arise  in  the  field  of 
social security for people moving within the Union. 
It can happen that the application of national leg-
islation for a migrant worker, in the same way as for 
a non-migrant worker, gives rise to unforeseen con-
sequences  that  are  incompatible  with  the  aims  of 
Articles  39  and  42  EC.  In  such  cases,  the  principle 
of  cooperation  in  good  faith,  laid  down  in  Article 
10  EC,  requires  the  competent  authorities  of  the 
Member  States  to  use  all  the  means  at  their  dis-
posal to achieve the aim of freedom of movement 
established in Articles 39 to 42 EC (236). This require-
ment implies that these authorities, when applying 
domestic law, should interpret it, as far as it is pos-
sible, in a way which accords with the requirements 
of  Community  law.  Where  application  in  accord-
ance  with  those  requirements  is  not  possible,  the 
national  authorities  must  fully  apply  Community 
law, if necessary by not applying domestic law (237).

234(
) 

235(
) 

Judgments of 26 October 1995, Cases C-481/93 Moscato [1995] ECR 
I-3537 and C-482/93 Klaus [1995] ECR I-3560.

Judgments  of  10  June  1982,  Case  92/81  Carraciol  [1982]  ECR  2213; 
of 23 October 1986, Case 300/84 Van Roosmalen [1986] ECR 3097; of 
9  November  2006,  Case  C-205/05  Nemec  [2006]  ECR  10745;  and  of 
20 May 2008, Case C-352/06 Bosmann [2008] ECR I-3827. The ultimate 
consequence is that a provision laid down in a regulation has to be 
considered as invalid if it is contrary to the aim of Articles 39–42: see 
judgments of 21 October 1975, Case 24/75 Petroni [1975] ECR 1149; 
of 15 January 1986, Case 41/84 Pinna [1986] ECR 1; of 18 April 2002, 
Case C-290/00 Duchon [2002] ECR I-3567; and of 31 May 2001, Case 
C-43/99 Leclere [2001] ECR I-4265.

236(
) 

Judgments of 5 October 1994, Case C-165/91 Van Munster [1994] ECR 
I-4686; and of 26 September 2000, Case C-262/97 Engelbrecht [2000] 
ECR I-3721. 

III.  The wIde SCoPe oF 

PerSonS Covered by The 
CoordInaTIon SySTem

a.  From workers to EU citizens

The  original  dimension  of  European  integration 
was  limited  to  a  common  market.  The  concept  of 
the four freedoms — of capital, goods, services and 
persons — was economically motivated. The initial 
philosophy  behind  the  regulations  was  to  avoid 
workers being penalised in the field of social security 
for exercising, or for having exercised, their right to 
freedom of movement. Regulation No 3, therefore, 
only covered ‘wage-earners or assimilated workers’ 
who were nationals of a Member State, as well as the 
members of their families and their survivors.

The  very  broad  definition  of  the  term  ‘employed 
person’ in Regulation (EEC) No 1408/71 reflects the 
case-law  of  the  CJ  under  Regulation  No  3  on  the 
notion ‘worker’ (238). It covers all those who are cov-
ered by a social security scheme of a Member State 
applicable  to  employed  persons  and  who  move 
for  whatever  reason  within  the  Union.  In  contrast 
to Regulation (EEC) No 1612/68 which is based on 
Article 39 EC, it is not necessary to have made use of 
the right to free movement in order to invoke Regu-
lation (EEC) No 1408/71 based on Article 42 EC. In 
fact,  the  latter  regulation  contains  various  provi-
sions that fall outside the framework of freedom of 
movement.  Article  22(1)(a)  of  Regulation  (EEC)  No 
1408/71, for instance, guarantees that an employed 
(or  self-employed)  person  (or  a  student)  —  even 
when he or she has never worked in another Mem-
ber  State  —  as  well  as  the  members  of  his  or  her 
family,  who  stays  temporarily  in  a  Member  State 
other than the state where they are insured, is enti-
tled to all benefits in kind which become necessary 
there on medical grounds (239).

238(

)  See also the opinion of Advocate General Mayras in Case 17/76 Brack 

[1976] ECR1429.

237(

)  See point 40 of the Engelbrecht judgment.

239(

)  The costs are borne by the competent state.

57

50 years of Social Security Coordination 

Past – Present – Future

In 1981 the scope of Regulation (EEC) No 1408/71 
was  extended  to  self-employed  persons  and  in 
1999 to students (240).

In its case-law, the CJ underlined on several occasions 
that the purpose of Regulation (EEC) No 1408/71 is 
not  only  to  promote  the  freedom  of  movement  of 
workers, but also the freedom of establishment (241), 
the  freedom  to  provide  services (242)  and  even  the 
freedom of movement of persons (243).

Article  22a  of  Regulation  (EEC)  No  1408/71  is 
another striking example of the fact that the regu-
lation has gone far beyond the original framework 
of freedom of movement of workers. In fact, since 
1  January 1996 (244), the protection offered by Arti-
cle 22(1)(a) and (c) applies to all persons, as long as 
they are nationals of a Member State and they are 
insured under the legislation of a Member State (for 
instance,  non-active  persons  insured  under  a  resi-
dence-based scheme).

The  introduction  of  citizenship  of  the  Union  by  the 
Maastricht Treaty has been a significant step forward 
in the transformation of a European Economic Com-
munity, with its economic preoccupation, to a political 
European Union serving the interests and well-being 
of all its citizens, regardless of whether or not they are 
engaged  in  economic  activities.  In  the  recent  past, 

240(

)  Article 1(ca) of Regulation (EEC) No 1408/71 defines the term ‘student’ 
as ‘any person other than an employed or self-employed person or a 
member of the family or survivor within the meaning of this regulation 
who studies or receives vocational training leading to a qualification 
officially  recognised  by  the  authorities  of  a  Member  State,  and  is 
insured  under  a  general  social  security  scheme  or  a  special  social 
security scheme applicable to students’.

241(
) 

242(
) 

243(
) 

Judgment  of  19  March  2002,  Joined  Cases  C-393/99  and  C-394/99 
Hervein [2002] ECR I-2829.

Judgments  of  10  February  2000,  Case  C-202/97  Fitzwilliam  [2000] 
ECR  883,  point  28;  of  23  October  2003,  Case  C-56/01  Inizan  [2003] 
ECR I-12403, points 21 and 25; of 12 April 2005, Case C-145/03 Keller 
[2005] ECR I-2529, point 46; and of 16 May 2006, Case C-372/04 Watts 
[2006] ECR I-4325, point 54

Judgments  of  23  November  2000,  Case  C-135/99  Elsen  [2000]  ECR 
I-10409; of 12 July 2001, Case C-368/98 Vanbraekel [2001] ECR I-5363, 
point 32; of 23 October 2003, Case C-56/01 Inizan [2003] ECR I-12403, 
points 21 and 25; of 12 April 2005, Case C-145/03 Keller [2005] ECR 
I-2529, point 46; and of 16 May 2006, Case C-372/04 Watts [2006] ECR 
I-4325, point 54.

there  was  a  piecemeal  approach (245)  to  the  right  of 
free movement and residence in the EU. The fact that 
the citizenship of the Union confers the right to free 
movement on every citizen of the Union is reflected 
by the fact that there is now one single Community 
instrument  dealing  with  the  right  to  move  and  to 
reside  within  the  Union (246).  It  was,  therefore,  not 
surprising  that  the  Commission,  when  it  presented 
in  1998  its  proposal (247)  to  simplify  and  modernise 
Regulation (EEC) No 1408/71, proposed to extend the 
scope of the new regulation to all EU nationals who are 
insured under national law (248). The legislature agreed: 
Regulation (EC) No 883/2004 applies to all EU nation-
als who are insured under national law, whether they 
are employed, self-employed, students, civil servants, 
pensioners  or,  indeed,  non-active,  as  well  as  to  the 
members of their families and to their survivors.

b.  Members of the family:  

from Kermaschek to Cabanis-Isarte

As we have seen above, Regulation (EEC) No 1408/71 
applies  to  the  employed,  the  self-employed  and 
students, who are, or have been, subject to the leg-
islation of one or more Member States and who are 
a national of a Member State (249), as well as to the 
members of their families and their survivors.

However, members of the family and survivors can-
not rely on the regulation as a whole. According to 
the  CJ,  the  Community  legislature  lays  down  two 
distinctive categories: workers on the one hand, and 

(

(

(

(

245

)  Regulation  (EEC)  No  1612/68  of  15  October  1968  (OJ  L  257, 
19.10.1968);  Council  Directive  68/360/EEC  of  15  October  1968  
(OJ L 257, 19.10.1968); Council Directive 73/148/EEC of 21 May 1973 
(OJ L 172, 28.6.1973); Council Directive 90/364/EEC of 28 June 1990 
(OJ L 180, 13.7.1990); Council Directive 90/365/EEC of 28 June 1990 
(OJ L 180, 13.7.1990); Council Directive 93/96/EEC of 29 October 1993 
(OJ L 317, 18.12.1993).

246

)  Directive 2004/38/EC of the European Parliament and of the Council 

of 29 April 2004 (OJ L 229, 29.6.2004).

247

)  OJ C 38, 12.2.1999.

248

)  Provided,  of  course,  that  there  is  a  cross-border  element:  the 
Community  regulations  based  on  Article  42  EC  do  not  apply  to 
situations  which  are  confined  in  all  respects  within  one  Member 
State: judgments of 11 October 2001, Case C-95/99 Khalil [2001] ECR 
I-7413,  points  69–72;  and  of  1  April  2008,  Case  C-212/06  Walloon 
Government v Flemish Government, point 33.

244(

)  Regulation  (EC)  No  3095/95  of  22  December  1995  (OJ  L  335, 

(

249

)  Or who are stateless persons or refugees residing within the territory 

30.12.1995).

of one of the Member States.

58

Rob Cornelissen

members of their families and their survivors on the 
other hand. In its judgment of 23 November 1976 (250) 
the CJ ruled that members of the family or survivors 
could only invoke the regulation concerning derived 
rights: rights to benefits acquired through their sta-
tus  as  members  of  the  family  or  as  survivors,  such 
as family benefits, healthcare or survivors’ pensions. 
This  was  known  as  the ‘Kermaschek  principle’  and 
meant that members of the family or their survivors 
could not invoke the regulation, unless it concerned 
benefits acquired through their status as members 
of  the  family.  Twenty  years  later  the  CJ  refined  its 
case-law  substantially.  In  its  Cabanis-Isarte  judg-
ment (251) the CJ limited the scope of the rule in Ker-
maschek to cases in which a member of a worker’s 
family  relies  on  provisions  of  the  regulation  which 
are applicable solely to workers. In practical terms, it 
means that members of the family can now invoke 
the  regulation,  unless  it  concerns  provisions  that 
are applicable solely  to  workers, such as  the  chap-
ter ‘unemployment benefits’. Members of the family 
can now, for instance, invoke the principle of equal 
treatment, laid down in Article 3 of Regulation (EEC) 
No 1408/71. Another example: where an employed 
person  is  subject  to  the  legislation  of  a  Member 
State  and  lives  with  his  family  in  another  Member 
State,  that  person’s  spouse  is  entitled,  under  Arti-
cle  73  of  Regulation  (EEC)  No  1408/71,  to  receive 
a  family  benefit  such  as  child-raising  allowance  in 
the  state  of  employment.  The  spouse  cannot  be 
refused such benefit on the basis of the distinction 
between a worker’s personal right and the derived 
rights acquired by members of his family, since that 
distinction  is  relevant  only  where  a  member  of  a 
worker’s  family  relies  on  the  provisions  of  Regula-
tion  (EEC)  No  1408/71,  which  are  applicable  solely 
to workers and not to members of the family such 
as those relating to unemployment benefits (252), and 
does not, in principle, apply to family benefits (253).

(

250
) 

(

251
) 

(

252
) 

(

253
) 

Judgment of 23 November 1976, Case 40/76 Kermaschek [1976] ECR 
1669.

Judgment  of  30  April  1996,  Case  C-308/93  Bestuur  van  de  Sociale 
Verzekeringsbank v J.M. Cabanis-Issarte [1996] ECR I-2097.

Judgment  of  25  October  2001,  Case  C-189/00  Ruhr  [2001]  ECR 
I-8225.

Judgment of 10 October 1996, Joined Cases C-245/94 and C-312/94 
Hoever and Zachow [1996] ECR I-4895.

C.  The inclusion of third-country 

nationals in the coordination system

Third-country nationals who are a member of the fam-
ily or a survivor of an employed, a self-employed per-
son or a student who is a EU national, and who is or 
has been subject to the legislation of a Member State, 
have always been covered by the coordination regu-
lations. However, as we just have seen in para. 2, this 
involves only a limited protection.

The  only  persons  who  can  invoke  the  Community 
regulations  as  a  whole  are  employed  and  self-
employed persons (and students) who are nationals 
of a Member State, or who are stateless persons or 
refugees residing within the territory of one of the 
Member States. This means that employed and self-
employed persons who are third-country nationals 
are,  in  principle,  not  covered  by  Regulation  (EEC) 
No 1408/71. Why not?

As we have seen above, the initial concept behind 
the coordinating regulations was to avoid penalis-
ing, in the field of social security, persons for exer-
cising or for having exercised their right to freedom 
of movement enshrined in Article 39 EC. Since only 
workers who are nationals of a Member State enjoy 
freedom of movement (254), it was logical at that time 
to reserve the protection offered by the regulations 
based on Article 51 EEC (corresponding to the cur-
rent Article 42 EC) to workers who were a national 
of a Member State. For this reason, Regulation (EEC) 
No  1408/71,  like  its  predecessor  Regulation  No  3, 
only applies to employed (and self-employed) per-
sons who are nationals (255) of a Member State (256).

In November 1997 the Commission presented a pro-
posal aimed at extending the scope of Regulation 

254(
) 

Judgment  of  29  October  1998,  Case  C-230/97  Awoyemi  [1998]  ECR 
I-6781, point 29. 

255(

)  Or who are stateless persons or refugees residing within the territory 
of one of the Member States. To understand why stateless persons and 
refugees have been included in the personal scope of the Community 
regulations,  see  the  judgment  of  11  October  2001,  Joined  Cases  C- 
Cases C-95/99, C-98/99 and C-180/99 Kahlil [2001] ECR I-7413.

256(

)  As well as to the members of their families or their survivors, regardless 
of  the  nationality  of  these  family  members  or  their  survivors  (see 
above para. 2). 

59

50 years of Social Security Coordination 

Past – Present – Future

(EEC)  No  1408/71  to  third-country  nationals (257). 
However, this proposal foundered on its legal basis. 
Three  Member  States  (Denmark,  Ireland  and  the 
United  Kingdom)  considered  that,  in  view  of  the 
close  link  between  Articles  48  (corresponding  to 
the  current  Article  39  EC)  and  51  (corresponding 
to the current Article 42 EC), the latter article could 
not  provide  a  legal  basis  for  extending  the  scope 
of  Regulation  (EEC)  No  1408/71  to  include  third-
country nationals. The dispute concerning the legal 
basis caused the proposal to be put on hold.

In its Khalil judgment of 11 October 2001 (258) the CJ 
implicitly acknowledged that Article 42 EC does not 
provide a legal basis for extending the regulation to 
third-country nationals.

Developments during the last decade in the legal basis 
and in the case-law of the CJ, as well as of the Europe-
an Court of Human Rights, have paved the way for the 
extension of the scope of Regulation (EEC) No 1408/71 
to  third-country  nationals. The Treaty  of  Amsterdam 
inserted  Article  63  into  the  Treaty,  thereby  provid-
ing  specific  Community  competence  to  legislate  on 
measures  concerning  immigration  policy,  as  well  as 
on measures defining the rights and conditions under 
which third-country nationals legally resident in one 
Member State may reside in another Member State.

Another important development was the introduc-
tion  of  the  Charter  of  Fundamental  Rights  of  the 
European  Union,  solemnly  declared  in  December 
2000 at Nice by the European Parliament, the Coun-
cil  and  the  European  Commission.  It  enshrines  a 
certain  number  of  rights  that  are  recognised  with 
respect  to  nationals  of  the  Member  States  as  well 
as nationals of third countries who are legally resi-
dent in the Member States (259). The Gaygusuz judg-

(

257

)  OJ C 6, 10.1.1998.

(

258
) 

Joined Cases C-95/99, C-98/99 and C-180/99 Kahlil [2001] ECR I-7413.

(

259

)  The  charter  has  now  been  integrated  into  the  Lisbon  Treaty  and 
has the same value as the Treaties. Article 6(3) of the new Treaty on 
European  Union  provides:  ‘Fundamental  rights,  as  guaranteed  by 
the  European  Convention  for  the  Protection  of  Human  Rights  and 
Fundamental  Freedoms  and  as  they  result  from  the  constitutional 
traditions  common  to  the  Member  States,  shall  constitute  general 
principles of the Union’s law’.

ment (260)  of  the  European  Court  of  Human  Rights 
put the discussion of the extension of the person-
al  scope  of  Regulation  (EEC)  No  1408/71  to  third-
country nationals into a broader legal perspective. 
In  fact,  in  this  judgment,  the  European  Court  of 
Human Rights said that social security rights were 
property  rights  and  that,  accordingly,  equality  of 
treatment  in  social  security  is  guaranteed  by  the 
European Convention for the Protection of Human 
Rights. Further to this judgment, the question was 
raised  in  literature (261)  of  whether  the  exclusion  of 
third-country  nationals  from  the  scope  of  Regula-
tion  (EEC)  No  1408/71  was  compatible  with  the 
fundamental  rights  that  form  part  of  the  general 
principles of Community law.

At its special meeting in Tampere in October 1999, the 
European  Council  created  the  pillars  of  a  European 
immigration policy. According to one of the pillars, the 
European Union should ensure ‘fair treatment of third-
country nationals who reside legally in the territory of 
its Member States’ and grant them rights and obliga-
tions ‘comparable to those of EU citizens’.

In February 2002, all these developments caused the 
Commission to submit a new proposal (262) to extend 
Regulation (EEC) No 1408/71 to cover third-country 
nationals, this time based on Article 63(4) EC (263). The 
proposal of 1997 was withdrawn at the same time. On 
14 May 2003 Council Regulation (EC) No 859/2003 (264) 
was adopted extending the scope of Regulation (EEC) 
No  1408/71  to  third-country  nationals.  This  regula-
tion was the first piece of Community legislation ever 
adopted under the new Article 63(4) EC (265).

(

260
) 

Judgment of 16 September 1996, Council of Europe: European Court 
of Human Rights, Case 39/1995/545/631 Gaygusuz v Austria. 

261(

)  Herwig  Verschueren,  ‘EC  social  security  coordination  excluding  third-
country nationals: still in line with fundamental rights after the Gaygusuz 
judgment?’, Common Market Law Review 1997, pp. 991–1017.

(

262

)  OJ C 126, 28.5.2002, p. 388.

(

263
) 

In  December  2001  the  European  Council  of  Laeken  had  already 
reached an agreement about Article 63 as the appropriate legal basis 
for  a  possible  extension  of  Regulation  (EEC)  No  1408/71  to  third-
country nationals.

(

(

264

)  OJ L 124, 20.5.2003.

265

)  Later more legislation was adopted on the basis of Article 63(4) EC: 
Council Directive 2003/109/EC of 25 November 2003 concerning the 
status  of  third-country  nationals  who  are  long-term  residents  (OJ  L 
16, 23.1.2004).

60

Rob Cornelissen

1408/71  because  there  is  a  cross-border  element 
between two Member States.

The  requirement  that  there  is  a  cross-border 
element  between  two  or  more  Member  States 
means  that  Regulation  (EC)  No  859/2003  does 
not  always  guarantee  that  third-country  nation-
als residing legally in a Member State are treated 
equally  as  Community  nationals  in  that  Member 
State.  Some  categories  of  third-country  nation-
als do benefit from equal treatment in the field of 
social security, even when there is no cross-border 
element  between  Member  States;  for  example, 
researchers (270),  or  long-term  residents  in  a  Mem-
ber State (271), or persons who are covered by spe-
cific  provisions  on  equal  treatment  laid  down  in 
international agreements concluded between the 
EU and some third countries. Turkish workers, for 
instance, can invoke Article 3 of Decision 3/80 (272) 
of  the  EEC/Turkey  Association  Council  of  19  Sep-
tember 1980 directly in order to obtain equal treat-
ment in the field of social security with nationals 
of the host Member State, even if there is no cross-
border element between two Member States. The 
equal treatment provisions laid down in the agree-
ments concluded with Algeria, Morocco and Tuni-
sia have a direct effect too, as the CJ made clear in 
a number of judgments (273). A proposal (274) aimed 
at guaranteeing equal treatment to third-country 
nationals who are not yet entitled to a long-term 
residence  status  is  currently  pending  before  the 
legislature.

As we all know, Regulation (EEC) No 1408/71 is on 
its last legs. Soon Regulation (EC) No 883/2004 will 
be  operational.  Regulation  (EEC)  No  1408/71  will 

270(

)  Council  Directive  2005/71/EC  of  12  October  2005  on  a  specific 
procedure for admitting third-country nationals for the purposes of 
scientific research (OJ L 289, 3.11.2005).

271(

)  Council Directive 2003/109/EC of 25 November 2003 concerning the 
status of third-country nationals who are long-term residents (OJ L 16 
of 23.1.2004). 

272(
) 

273(
) 

Judgments of 4 May 1999, Case C-262/96 Sürül [1999] ECR I-2685; and 
of 28 April 2004, Case C-373/02 Öztürk [2004] ECR I-3605. 

Judgments of 31 January 1991, Case C-18/90 Kziber [1991] ECR I-199; 
of 20 April 1994, Case C-58/93 Yousfi [1994] ECR I-1353; of 3 October 
1996, Case C-126/95 Hallouzi; and of 15 January 1998, Case C-113/97 
Babahenini [1998] ECR I-183. 

Thanks  to  Regulation  (EC)  No  859/2003,  third-
country nationals are now covered by the current 
European Regulation (EEC) No 1408/71. It cannot 
be denied that the extension of the personal scope 
of  Regulation  (EEC)  No  1408/71  has  substantially 
reinforced the legal status of third-country nation-
als in the EU. In fact, third-country nationals mov-
ing  from  one  Member  State  to  another  are  now 
treated, in the field of social security, in the same 
way (266) as EU nationals. However, the extension of 
the scope of Regulation (EEC) No 1408/71 is sub-
ject to two conditions. First of all, the person con-
cerned must be legally resident in the territory of 
a Member State. This is the consequence of Article 
63(4)  EC  constituting  the  legal  basis  of  the  regu-
lation. No Community legislative act defines what 
is meant by ‘legally resident’ (267). Nationals of third 
countries who are legally resident on the territory 
of  a  Member  State  are  the  persons  meeting  the 
residence conditions laid down by the legislation 
of  the  Member  State  in  which  they  are  resident, 
and  those  who  are  authorised  to  reside  there  by 
virtue of a right arising from an act of Community 
law (268)  or  an  international  obligation  contracted 
by  the  Member  State  in  question  or  by  the  Euro-
pean  Community,  in  particular  in  the  context  of 
association  agreements.  The  second  condition 
is  that  the  person  concerned  is  not  in  a  situation 
‘which is not confined in all respects within a sin-
gle Member State’ (269). In other words: there must 
be  a  cross-border  element  between  at  least  two 
Member  States.  A  Lebanese  worker,  for  instance, 
residing  and  working  in  Germany  cannot  invoke 
Regulation (EEC) No 1408/71 in order to claim the 
same amount of family benefits to which German 
nationals are entitled, if his children reside in Ger-
many.  However,  if  his  children  reside  in  another 
Member State, he can invoke Regulation (EEC) No 

266

)  The  special  provisions  laid  down  in  the  annex  concerning  family 

benefits in Germany and Austria only have a limited effect.

267

)  Other linguistic versions of Article 63(4) EC refer to a notion of ‘stay’ 
rather than ‘residence’. Some examples: the German text: ‘…die sich 
rechtmässig  in  einem  Mitgliedstaat  aufhalten’;  the  French  text: ‘...en 
situation régulière de séjour dans un Etat membre’; the Dutch text: ‘…
die legaal in een lidstaat verblijven’.

268

)  For instance, Directive 2001/55/EC of 20 July 2001; Directive 2003/109/
EC of 25 November 2003; and Directive 2004/81/EC of 29 April 2004.

(

(

(

(

269

)  Exactly the same wording as used by the CJ in the Khalil judgment. 

274(

)  Commission proposal of October 2007 (COM(2007) 638 final).

61

50 years of Social Security Coordination 

Past – Present – Future

be repealed as from the date on which Regulation 
(EC) No 883/2004 becomes applicable. This means 
that a new legal instrument is needed to extend the 
scope of the new regulation to include third-coun-
try nationals. In 2007 the Commission submitted a 
proposal to this effect (275). This proposal is currently 
pending before the Council.

Iv.  adaPTabIlITy oF The 

maTerIal SCoPe oF The 
CoordInaTIon SySTem 
To develoPmenTS In 
naTIonal legISlaTIon

Is  Regulation  (EEC)  No  1408/71  suited  to  today’s 
requirements  as  to  its  material  scope?  Does  the 
new Regulation (EC) No 883/2004 take sufficiently 
into account the introduction of new forms of social 
security in the various Member States?

Regulation  (EEC)  No  1408/71  applies  to  social 
security  legislation  which  concerns  a  number  of 
branches enumerated in Article 4(1). These branch-
es  are  inspired  by  ILO  Convention  No  102  dating 
from 1952!

Even  if  the  benefit  in  question  is  a  social  security 
benefit, it is not covered by the regulation, if it is not 
to be classified under one of the branches enumer-
ated in Article 4(1) (276).

As  we  know,  the  social  security  systems  of  Member 
States are facing all kinds of challenges. They have to 
respond to facts like the demographic development 
and  ageing  of  the  population,  as  well  as  changes  in 
family structure. The social security systems of Mem-
ber  States  are  also  under  pressure  in  the  budgetary 
context. The starting point of coordination is to accept 
the national social security schemes as they are, with 
all  their  differences  in  benefits,  procedures,  organi-
sation  and  funding.  Therefore,  changes  in  national 

(

275

)  COM(2007) 439 final.

systems  also  have  a  bearing  on  the  coordination  of 
social  security  forming  the  bridge  between  the  vari-
ous schemes. It is true that the existing coordination 
system has been able to deal with the introduction of 
a whole set of new benefits in national legislation of 
the various Member States. But we should not forget 
that this flexibility has been mainly realised thanks to 
the case-law of the CJ, and not because the legislator 
has adapted the regulations.

As  a  response  to  demographic  development  and 
declining  fertility  rates,  for  instance,  several  Mem-
ber  States  have  introduced  new  kinds  of  benefits: 
child-raising  allowances  or  parental  benefits. They 
are  part  of  family  policy  measures.  These  allow-
ances  were  introduced  in  order  to  enable  one  of 
the  parents  to  devote  him/herself  to  the  raising 
of  a  young  child  and  to  mitigate,  as  the  case  may 
be,  the  financial  disadvantages  entailed  in  giving 
up  income  from  full-time  employment.  But  since 
these allowances are also intended to meet family 
expenses, they are to be treated as family benefits 
in the sense of the coordination system (277).

The  employment  guidelines  refer  to  the  need  to 
reconcile work and family life in order to enable a 
growing participation of women in the workforce. 
To  this  end,  Finland  has  introduced  a  childcare 
allowance. The aim of this benefit is to regulate the 
entitlement  to  financial  support  granted  for  the 
organisation of childcare as an alternative to a day-
care place. But since the allowance is also intended 
to meet the expenses of the care and upbringing of 
children and, thus, to mitigate the financial burden, 
it has to be treated as a family benefit for the pur-
pose of the coordination system (278).

The  ageing  of  the  population  leads  to  growing 
care  needs  of  dependent  older  people.  To  this 
end, several Member States have introduced ‘care 
insurance’. Sometimes this care is provided directly 

(

277
) 

Judgments  of  10  October  1996,  Joined  Cases  C-245/94  and  312/94 
Hoever  and  Zachow  [1996]  ECR  I-4895;  and  of  11  June  1998,  Case 
C-275/96 Kuusijärvi [1998] ECR 3419.

(

276
) 

Judgments of 5 July 1983, Case 171/82 Valentini [1983] ECR 2157; and 
of 11 July 1996, Case C-25/95 Otte [1996] I-3745.

(

278
) 

Judgment of 7 November 2002, Case C-333/00 Maaħeimo [2002] ECR 
I-10087.

62

by  authorised  bodies.  However,  in  some  Member 
States the care insurance gives, under certain con-
ditions, entitlement to benefits designed to cover 
the costs of care provided at home by another per-
son:  the  care  allowance.  Since  the  Molenaar (279), 
Jauch (280) and Hosse (281) judgments, we know that 
these  benefits  must  be  seen  as  sickness  benefits 
in cash.

The  new  Regulation  (EC)  No  883/2004  will  bring 
only a very limited modernisation as to the mate-
rial scope. First of all, it widens the current branch 
‘sickness  and  maternity  benefits’  to  include  also 
‘equivalent  paternity  benefits’ (282).  Finally,  the 
new  regulation  also  will  apply  to  pre-retirement 
benefits.  The  latter  extension  will  have  a  rather 
limited  impact,  since  the  new  regulation,  like  its 
predecessor,  will  only  apply  to  statutory  social 
security. As far as I know, statutory pre-retirement 
schemes only apply in Denmark and Sweden. The 
new chapter ‘pre-retirement benefits’ only has one 
article which stipulates that the rule on the aggre-
gation of periods for entitlement to benefits shall 
not apply.

There  is  only  very  modest  Community  legislation 
protecting people moving within the Union in the 
field of non-statutory supplementary social security 
schemes (283). The  negotiations  on  the  Commission 
proposal (284)  aimed  at  increasing  the  level  of  such 
protection are very difficult.

(

279
) 

(

280
) 

(

281
) 

Judgment  of  5  March  1998,  Case  C-160/96  Molenaar  [1998]  ECR 
I-843.

Judgment of 8 March 2001, Case C-215/99 Jauch [2001] ECR I-1901.

Judgment  of  21  February  2006,  Case  C-286/03  Hosse  [2006]  ECR 
I-1771.

(

(

(

282

)  Recital 19 of Regulation (EC) No 883/2004: ‘In some cases, maternity 
and equivalent paternity benefits may be enjoyed by the mother or 
the father and since, for the latter, these benefits are different from 
parental benefits and can be assimilated to maternity benefits strictu 
sensu in that they are provided during the first months of a new-born 
child’s  life,  it  is  appropriate  that  maternity  and  equivalent  paternity 
benefits be regulated jointly’.

283

)  Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary 
pension  rights  of  employed  and  self-employed  persons  moving 
within the Community (OJ L 209, 25.7.1998).

284

)  Amended  proposal  for  a  directive  on  minimum  requirements 
for  enhancing  worker  mobility  by  improving  the  acquisition  and 
preservation of supplementary pension rights (COM(2007) 603 final).

Rob Cornelissen

v.  The InTeraCTIon beTween 
CourT and legISlaTure 
havIng led To a SeParaTe 
CoordInaTIon SySTem 
For ‘SPeCIal non-
ConTrIbuTory beneFITS’

a.  CJ case-law under Regulation (EEC)  

No 1408/71

Like Regulation No 3, Regulation (EEC) No 1408/71 
only  applies  to  legislation  concerning  social  secu-
rity. Article 4 made it clear, from the very beginning, 
that the regulation applies to all statutory general 
and  special  social  security  schemes,  whether  con-
tributory  or  non-contributory.  There  will  be  no 
substantial  change  in  this  respect  under  the  new 
Regulation (EC) No 883/2004.

By  virtue  of  Article  4(4)  of  Regulation  (EEC)  No 
1408/71, social assistance is excluded from its mate-
rial scope. However, a definition of the terms ‘social 
security’ or ‘social assistance’ was, and is not to be 
found  in  Regulation  (EEC)  No  1408/71.  It  results 
from the abundant case-law of the CJ that the dis-
tinction between benefits excluded from the scope 
of Regulation (EEC) No 1408/71 and those which fall 
within its scope is based essentially on the constitu-
ent elements of the particular benefit, in particular 
its purposes and the conditions on which it is grant-
ed, and not whether a benefit is classified as a social 
security  benefit  by  national  legislation.  Moreover, 
the  CJ  had  consistently  stated  that  a  benefit  may 
be regarded as a social security benefit insofar as it 
is granted, without any individual and discretionary 
assessment of personal needs, to recipients on the 
basis of a legally defined position provided that it 

63

50 years of Social Security Coordination 

Past – Present – Future

concerns one of the risks expressly listed in Article 
4(1) of Regulation (EEC) No 1408/71 (285).

In other words, if a benefit aimed at meeting fam-
ily  expenses  was  granted  automatically  to  fami-
lies meeting certain objective criteria, it had to be 
treated  as  a  family  benefit  in  the  sense  of  Regula-
tion (EEC) No 1408/71 with all its consequences: the 
residence  clauses  provided  for  by  national  legisla-
tion as a condition for entitlement to the benefit in 
question  were  waived  by  Article  73  of  Regulation 
(EEC) No 1408/71 (286). Likewise, insofar as the ben-
efit in question was to be considered as a pension, 
being linked to the risks of invalidity, old age or sur-
vival,  the  benefit  had  to  be  exported,  by  virtue  of 
Article 10, even if national legislation confined the 
benefit in question to persons residing in its nation-
al territory (287).

b.  Reaction of legislature:  

Regulation (EEC) No 1247/92

By  adopting  Regulation  (EEC)  No  1247/92 (288)  the 
legislature  created  a  separate  coordination  system 
for  the  special  non-contributory  benefits;  in  other 
words, a coordination system which differs (289) from 
the normal coordination system provided by Regula-
tion (EEC) No 1408/71, which takes into account the 
special characteristics of the benefits concerned.

285

(

)  The  CJ  made 

it 

inter 

(EEC) 

clear 
No 

the  material 
covered, 

scope  of 
that 
Regulation 
alia:  
1408/71 
guaranteed income for old people in Belgium: judgment of 22 June 
1972, Case 1/72 Frilli [1972] ECR I-457; mobility allowance in the UK: 
judgment  of  20  June  1991,  Case  C-356/89  Stanton  Newton  [1991] 
ECR I-3017; allowances of the Fonds National de Solidarité in France: 
judgments of 9 October 1974, Case 24/74 Biason [1974] ECR 999; of 
24 February 1987, Joined Cases 379, 380, 381/85 and 93/86 Giletti et 
al. [1987] ECR I-955; and of 11 June 1991, Case C-307/89 Commission 
v France [1991] ECR I-2903; benefits for elderly unemployed persons 
or  unemployed  persons  with  partial  incapacity  for  work  in  the 
Netherlands:  judgment  of  2  August  1993,  Case  C-66/92  Acciardi 
[1993] I-4567; social pension in Italy: judgment of 10 May 1983, Case 
139/82 Piscitello [1983] ECR I-1427.

(

286
) 

(

287
) 

Judgment of 16 July 1992, Case C-78/91 Hughes [1992] ECR I-4839.

Judgment  of  24  February  1987,  Joined  Cases  379,  380,  381/85  and 
93/86 Giletti et al. [1987] ECR I-955.

(

(

288

)  Regulation  (EEC)  No  1247/92  of  30April  1992  (OJ  L  136,  19  May 

1992).

289

)  See the Recital 6 of Regulation (EEC) No 1247/92.

64

As a first part of this separate coordination system, 
para.  2a  was  inserted  in  Article  4,  making  it  clear 
that  Regulation  (EEC)  No  1408/71  also  applied  to 
special  non-contributory  benefits.  This  new  para-
graph  also  contained  a  description  of  the  kind  of 
benefits  which  the  legislator  had  in  mind  in  order 
to  be  considered  as  ‘special’  in  the  sense  of  that 
paragraph. However, that indication was not really 
precise. There was no definition of what had to be 
understood under the term ‘non-contributory’.

The  second  part  of  the  separate  coordination 
system was the insertion of Article 10a in Regula-
tion  (EEC)  No  1408/71. This  new  article  had  as  an 
objective  that  the  special  non-contributory  ben-
efits  should  not  be  covered  by  any  of  the  provi-
sions  laid  down  in Title  III  of  the  regulation  or  by 
the  general  waiving  of  residence  clauses  for  pen-
sions  stipulated  by  Article  10.  However,  the  way 
this was expressed in the text was rather ambigu-
ous (290). The new Article 10a also contained an own 
aggregation provision for opening up entitlement 
to such benefits (291) as well as some specific assimi-
lation of facts’ provisions (292).

C.  CJ case-law under the new regulation

In  three  judgments  concerning  UK  benefits  listed 
in  Annex  IIa  as  inserted  by  Regulation  (EEC)  No 
1247/92, the CJ confirmed the validity of the spe-
cial  coordination  system  for  special  non-contrib-
utory  benefits.  These  judgments  had  as  an  effect 
that not only the exportability of the benefits con-
cerned was excluded (293), but also that the habitual 
residence  test,  as  laid  down  in  UK  legislation (294), 

(

(

(

290

)  The  text  of  Article  10a  (1)  was: ‘Notwithstanding  the  provisions  of 
Article 10 and Title III, persons to whom this regulation applies shall 
be granted the special non-contributory cash benefits referred to in 
Article 4 (2a) exclusively in the territory of the Member State in which 
they reside, in accordance with the legislation of that state, provided 
that such benefits are listed in Annex IIa…’.

291

)  Article 10a(2) as inserted by Regulation (EEC) No 1247/92.

292

)  Article 10a(3) and (4) as inserted by Regulation (EEC) No 1247/92.

(

293
) 

Judgments  of  4  November  1997,  Case  C-20/96  Snares  [1997]  ECR 
I-6057;  and  of  11  June  1998,  Case  C-297/96  Partridge  [1998]  ECR 
I-3467.

(

294

)  This  legislation  required  the  completion  of  an  appreciable  period 
of  residence  there  as  a  condition  for  entitlement  to  the  benefit  in 
question. 

Rob Cornelissen

could  not  be  applied  to  the  special  non-contrib-
utory  benefits (295).  In  its  later  Jauch  judgment (296), 
the CJ underlined that in none of the three afore-
mentioned judgments (Snares, Partridge and Swad-
dling)  it  had  examined  whether  the  benefits  in 
question did in fact meet the conditions of being 
‘special’ and ‘non-contributory’ in the sense of Arti-
cle  4(2a),  for  the  simple  reason  that  this  question 
had not been raised in those proceedings. The CJ 
stated in all three aforementioned judgments that, 
by reason of the fact that they were listed in Annex 
IIa, they had to be considered as ‘special non-con-
tributory benefits’ (297).

The  Jauch  judgment  marked  a  new  phase  in  the 
coordination  system  for  the  special  non-contribu-
tory benefits. In this judgment the CJ made it clear 
that  the  simple  fact  that  a  benefit  was  listed  in 
Annex IIa was not sufficient any more to conclude 
that the benefit in question was a ‘special non-con-
tributory’  one.  On  the  contrary,  for  every  benefit 
in  question  it  had  to  be  examined  whether  it  was 
indeed a ‘special’ and a ‘non-contributory’ one. The 
CJ came, after careful examination of the Austrian 
benefit in question (the care allowance), to the con-
clusion  that,  notwithstanding  its  listing  in  Annex 
IIa, it was neither ‘special’ nor ‘non-contributory’.

A  couple  of  months  later  the  CJ  examined  in  the 
Leclere  judgment (298)  whether  the  Luxembourg 
maternity  allowance,  listed  in  Annex  IIa,  was 
indeed  a  ‘special’  one.  The  CJ  declared  this  part 
of the annex invalid, since the benefit in question 
was not a ‘special’ one.

d.  Reaction of legislature: Regulation (EC) 

No 647/2005

New criteria

These  judgments  were  an  encouragement  for 
the  legislature  to  review  the  whole  coordination 
system  for  the  ‘special  non-contributory’  bene-
fits  which  was  in  place  at  that  time,  including  its 
Annex IIa. The Commission presented in 2003 (299) a 
proposal for criteria which must be fulfilled by ben-
efits in order to be ‘special’ and ‘non-contributory’. 
By adopting Regulation (EC) No 647/2005 (300), the 
legislature  accepted  with  hardly (301)  any  change 
the  Commission  proposal  for  the  wording  of  the 
new criteria.

The  new  wording  is  much  inspired  by  the  Jauch 
and  Leclere  judgments (302).  Referring  to  the  aim  of 
Articles 39–42 of the Treaty, the CJ stated that, even 
when  it  is  permissible  for  the  Community  legisla-
ture  to  adopt  provisions  which  derogate  from  the 
principle  of  exportability  of  social  security  ben-
efits,  such  derogating  provisions  must  be  inter-
preted strictly. The structure of Regulation (EEC) No 
1408/71  shows  that  the  concept  of ‘social  security 
benefit’ within the meaning of Article 4(1) and the 
concept of ‘special non-contributory benefit’ within 
the  meaning  of  Article  4(2a)  of  the  regulation  are 
mutually exclusive. In other words, a benefit which 
satisfies the conditions of a ‘social security benefit’ 
within  the  meaning  of  Article  4(1)  of  Regulation 
(EEC)  No  1408/71  cannot  be  analysed  as  a ‘special 
non-contributory  benefit’ (303).  When  a  benefit  is 
a  family  benefit  or  a  sickness  benefit  in  the  sense 
of  Article  4(1)  of  Regulation  (EEC)  No  1408/71,  for 
instance,  it  cannot  be  a ‘special  non-contributory’ 
benefit in the sense of Article 4(2a).

(

295
) 

Judgment of 25 February 1999, Case C-90/97 Swaddling [1999] ECR 
I-1075.

(

(

296

)  Point 17 of the judgment of 8 March 2001, Case C-215/99 Jauch [2001] 

ECR I-1901.

297

)  Point 32 of the Snares judgment; point 33 of the Partridge judgment; 

and point 24 of the Swaddling judgment.

(

(

(

(

(

299

)  OJ C 80, 30.3.2004.

300

)  Regulation (EC) No 647/2005 of 13 April 2005 (OJ L 117, 4.5.2005).

301

)  There is only a slight difference in the wording of the criterion ‘non-

contributory’ contained in Article 4(2a)(b).

302

)  See  points  20  and  21  of  the  Jauch  judgment  and  point  35  of  the 

Leclere judgment.

303

)  This was also confirmed more recently by the CJ in its judgment of 

(

298
) 

Judgment of 31 May 2001, Case C-43/99 Leclere [2001] ECR I-4265. 

21 February 2006, Case C-286/03 Hosse [2006] ECR I-1771.

65

50 years of Social Security Coordination 

Past – Present – Future

For these reasons, the conditions to be fulfilled by a 
benefit in order to be considered as a ‘special non-
contributory’ one were sharpened, having in mind 
in particular the broad interpretation of the terms 
‘sickness benefit’ (304) and ‘family benefit’ (305). In addi-
tion, the distinction between the two categories of 
‘special  non-contributory  benefits’  —  Article  4(2a)
(i) on the one hand and Article 4(2a)(ii) on the other 
— has become much clearer.

The  first  category  covers  benefits  whose  purpose 
is  to  help  people  in  financial  need  (‘guarantee  a 
minimum subsistence income having regard to the 
economic and social situation of the Member State 
concerned’). The second category concerns benefits 
whose aim is to help people who are in need of assist-
ance in order to participate in the daily life of society 
(‘solely protection for the disabled, closely linked to 
the said person’s social (306) environment in the Mem-
ber State concerned’). The mere fact that a benefit is 
awarded to a person who is disabled is not, as such, 
a sufficient ground to conclude that it is, therefore, a 
‘special non-contributory’ benefit (307).

Regulation (EC) No 883/2004 contains the same cri-
teria as Regulation (EC) No 647/2005.

(

304
) 

(

305
) 

Judgments  of  5  March  1998,  Case  C-160/96  Molenaar  [1998]  ECR 
I-843; and of 8 March 2001, Case C-215/99 Jauch [2001] ECR I-1901; 
later confirmed by judgments of 8 July 2004, Joined Cases C-502/01 
and 31/02 Gaumain-Cerri [2004] ECR I-6483; and of 21 February 2006, 
Case C-286/03 Hosse [2006] ECR I-1771.

Judgments of 10 October 1996, Joined Cases C-245/94 and C-312/94 
Hoever and Zachow [1996] ECR I-4895; of 11 June 1998, Case C-275/96 
Kuusijärvi [1998] ECR 3419; of 2 February 2002, Case C-255/99 Humer 
[2002] ECR I-1205; and of 7 November 2002, Case C-333/00 Maaħeimo 
[2002] ECR I-10087.

(

(

306

)  No reference is made to ‘economic’ environment as is the case in the 

first category. 

307

)  Regulation (EC) No 647/2005 has also clarified the wording of Article 
10a. As mentioned above, the intention of the legislator in 1992 was 
to create a separate coordination system for special non-contributory 
benefits. Therefore, the provisions of the whole Title III and of Article 
10  should  not  be  applied  to  the  special  non-contributory  benefits. 
However, the wording laid down in the previous version of Article 10a 
was rather ambiguous. It could be interpreted that it only overruled 
the waiving of residence clauses laid down in Title III and Article 10. 
Because of this ambiguous wording, the CJ ruled in its judgment of 
22  September  1998,  Case  C-132/96  Stinco,  that  Article  46(2)(a)  of 
Regulation (EEC) No 1408/71 requires that the competent institution, 
in determining the theoretical amount of the pension on which the 
pro-rata benefit is based, take into account a supplement intended 
to  bring  the  pension  to  the  level  of  the  statutory  minimum.  Article 
10a of Regulation (EEC) No 1408/71, as modified by Regulation (EC) 
No 647/2005, now stipulates that the provisions of Title III (including 
Article  46) ‘shall  not  apply  to  the  special  non-contributory  benefits’ 
referred to in Article 4(2a).

New Annex IIa

In order to reflect that Regulation (EC) No 647/2005 
has  really  ‘refreshed’,  and  not  only  adapted,  the 
coordination  system  of  ‘special  non-contributory 
benefits’, the content of Annex IIa has been amend-
ed as a whole rather than modifying several entries, 
as had been the case in all previous modifications 
of Annex IIa (308) of Regulation (EEC) No 1408/71.

A  great  number  of  benefits  which  were  listed  in 
Annex IIa prior to the coming into force of Regula-
tion (EC) No 647/2005 have not been included in the 
new annex, since they had to be considered either 
as ‘family benefits’ or as ‘sickness benefits’ covered 
by Article 4(1) of Regulation (EEC) No 1408/71.

vI.  The greaT ImPaCT oF 

The PrInCIPle oF  equal 
TreaTmenT

One of the pillars of the EC Treaty is the principle that 
all  discrimination  on  grounds  of  nationality  is  pro-
hibited. Free movement of workers entails the right 
of migrant workers to be treated equally as national 
workers  in  the  host  state.  The  lex  loci  laboris  prin-
ciple  reflects  the  principle  of  equal  treatment (309), 
as  enshrined  in  Article  39  EC,  in  Title  II  of  the  cur-
rent  Regulation  (EEC)  No  1408/71  and  of  the  new 
Regulation (EC) No 883/2004. But the importance of  
Article  39  EC  for  the  social  security  coordination 
goes further than that. The judgment of the CJ in the 
Gottardo case is a nice illustration of the far-reaching 
importance of the principle of equal treatment laid 
down in Article 39 EC. In this judgment the CJ ruled 
that, even when the conclusion of a bilateral agree-
ment with a third country is a matter which belongs 

(

(

308

)  See  for  instance:  Regulation  (EEC)  No  1249/92  of  30  April  1992  (OJ 
L 136, 19.5.1992); Regulation (EC) No 1290/97 of 27 June 1997 (OJ L 
176, 4.7.1997); Regulation (EC) No 1223/98 of 4 June 1998 (OJ L 168, 
13.6.1998);  Regulation  (EC)  No  1399/99  of  29  April  1999  (OJ  L  164, 
30.6.1999); and Regulation (EC) No 1386/2001 of 5 June 2001 (OJ L 
187, 10.7.2001).

309

)  See Prof. Herwig Verschueren, ‘Cross-border workers in the European 
internal  market: Trojan  horses  for  Member  States’  labour  and  social 
security law?’, The International Journal of Comparative Labour Law 
and Industrial Relations, Vol. 24./2, 167–199, 2008.

66

Rob Cornelissen

to  the  competence  of  the  Member  States,  in  the 
application  of  such  an  agreement  Member  States 
have  to  comply  with  Community  law.  This  means, 
for  instance,  that  when  Member  State  A  has  con-
cluded an agreement with a third country, nationals 
of  Member  State  B  or  C  having  completed  periods 
of  insurance  in  that  third  country,  must  be  treated 
by Member State A in the same way as nationals of 
that Member State. According to the CJ (310), this is an 
obligation resulting from the principle of equal treat-
ment laid down in Article 39 EC.

The CJ does not hesitate to apply directly Article 39 EC  
in order to find a reasonable solution for workers who 
cannot invoke Regulation (EEC) No 1408/71 (311). The 
CJ will not hesitate either to declare a provision of the 
regulation invalid, if it violates the principle of equal 
treatment laid down in Article 39 EC (312).

The  introduction  of  European  citizenship  in  the 
Treaty has made the impact of the equal treatment 
principle  even  wider.  In  a  succession  of  cases (313), 
starting  with  the  famous  Martinez  Sala  judgment, 
the CJ has given much more weight to the notion 
of  European  citizenship  than  initially  anticipated. 
The experts are still debating the interrelationship 
between  the  different  non-discrimination  provi-
sions based on nationality contained in Articles 12 
and 18 EC, on the one hand, and those laid down in 
Regulation (EEC) No 1408/71, on the other.

With  regard  to  social  security,  the  principle  of 
equal  treatment  is  laid  down  expressly  in  Article 

(

310
) 

(

311
) 

(

312
) 

(

313
) 

Judgment  of  15  January  2002,  Case  C-55/00  Gottardo  [2002] 
ECR  I-413.  See  also  Recommendation  22  of  18  June  2003  of  the 
Administrative  Commission  on  Social  Security  for  Migrant  Workers 
(OJ L 326, 13.12.2003).

Judgments of 22 November 1995, Case C-443/93 Vougioukas [1995] 
ECR 4033; of 3 October 2000, Case C-411/98 Ferlini [2000] ECR I-8081; 
and of 16 December 2004, Case C-293/03 My [2004] ECR I-12013.

Judgments of 15 January 1984, Case 41/84 Pinna [1986] ECR 1; and of 
18 April 2002, Case C-290/00 Duchon [2002] ECR I-3567.

Judgments  of  12  May  1998,  Case  C-85/96  Martínez  Sala  [1998] 
ECR  I-2691;  of  20  September  2001,  Case  C-184/99  Grzelczyk  [2001] 
ECR  I-6193;  of  11  July  2002,  Case  C-224/98  D’Hoop  [2002]  ECR 
I-6191;  of  2  October  2003,  Case  C-148/02  Garcia  Avello  [2003]  ECR-
11613;  of  23  March  2004,  Case  C-138/02  Collins  [2004]  ECR  I-2703; 
of  7  September  2004,  Case  C-456/02  Trojani  [2004]  ECR  7573,  of 
15 March 2005, Case C-209/03 Bidar [2005] ECR 2119, of 26 October 
2006,  Case  C-192/05  Tas-Hagen,  ECR  2006  I-10451;  and  of  22  May 
2008, Case C-499/06 Nerkowska [2008] ECR I-3993.

3  of  Regulation  (EEC)  No  1408/71,  which  provides 
that persons residing in the territory of one of the 
Member States to whom the provisions of the regu-
lation  apply  are  subject  to  the  same  obligations 
and  enjoy  the  same  benefits  under  its  legislation 
as the nationals of that state. In the case-law of the 
CJ, the principle of equal treatment has been given 
a  broad  interpretation,  prohibiting  not  only  overt 
discrimination based on nationality, but also covert 
forms  of  discrimination  which,  by  applying  other 
distinguishing  criteria,  in  fact  achieve  the  same 
result (314).

Regulation (EC) No 883/2004 has strengthened the 
principle of equal treatment between EU nationals 
in two ways. First of all, the current Regulation (EEC) 
No  1408/71  requires  that  the  person  concerned 
must reside in a Member State in order to be able to 
invoke the principle of equal treatment. Regulation 
(EC)  No  883/2004  does  not  require  this  condition 
any  more (315).  This  means  that  people  covered  by 
Regulation (EC) No 883/2004 will be able to invoke 
the  non-discrimination  provision  contained  in  the 
aforementioned regulation even when they reside 
in  a  third  state.  For  example,  it  will  no  longer  be 
possible for a Member State to provide only to its 
own  nationals  indexation  increases  for  pensioners 
residing in a third state.

The  principle  of  equal  treatment  has  been  further 
strengthened  by  the  insertion  of  the  provision 
stipulating  cross-border  recognition  of  facts  or 
events (316). This principle means that facts or events 
occurring  in  a  Member  State  must  be  taken  into 
account by another Member State as though they 

314(
) 

Judgments  of  25  June  1997,  Case  C-131/96  Mora  Romero  [1997]  
ECR  I-3659;  of  21  September  2000,  Case  C-124/99  Borawitz  [2000]  
ECR  I-7293;  of  9  November  2006,  Case  C-346/05  Chateigner  [2006]  
ECR  I-10951;  and  of  18  January  2007,  Case  C-332/05  Celozzi  [2007]  
ECR I-563.

315(

)  Article 4 of Regulation (EC) No 883/2004.

316(

)  Article 5 of Regulation (EC) No 883/2004.

67

50 years of Social Security Coordination 

Past – Present – Future

had taken place in its own territory. This provision is 
in line with the case-law of the CJ (317).

However, the assimilation of facts or events occur-
ring  in  a  Member  State  can  in  no  way  render 
another Member State competent, or its legislation 
applicable (318). Likewise, in order to clarify that the 
assimilation of facts or events occurring in the ter-
ritory  of  another  Member  State  should  not  inter-
fere  with  the  principle  of  aggregation  of  periods 
of  insurance  completed  in  another  Member  State, 
Recital  10  has  been  inserted  into  Regulation  (EC) 
No 883/2004. It means that Article 5 of Regulation 
(EC) No 883/2004 does not create periods of insur-
ance.  Only  periods  that  are  completed  under  the 
legislation of another Member State are to be taken 
into account by applying the principle of aggrega-
tion of periods (319).

(

317
) 

In fact, in a number of judgments the CJ decided in favour of a cross-
border assimilation of facts or events as a requirement of the principle 
of  equal  treatment:  judgments  of  7  June  1988,  Case  20/85  Roviello 
[1988]  ECR  2805;  of  4  October  1991,  Case  C-349/87  Paraschi  [1991] 
ECR I-4501; of 9 December 1993, Joined Cases 45/92 and 46/92 Lepore 
and Scamuffa [1993] ECR I-6497; of 25 June 1997, Case C-131/96 Mora 
Romero  [1997]  ECR  I-3659;  of  7  February  2002,  Case  C-28/00  Kauer 
[2002] ECR I-1343; of 18 April 2002, Case C-290/00 Duchon [2002] ECR 
I-3567; and of 28 April 2004, Case C-373/02 Öztürk [2004] ECR I-3605. 

(

(

318

)  Recital 11 of Regulation (EC) No 883/2004. 

319

)  This Recital 10 is also entirely in line with the judgment of the CJ in the 
Adanez Vega  case  (Case  C-372/02). The  judgment  (of  11  November 
2004) in this case was delivered on the interpretation of Regulation 
(EEC) No 1408/71 which does not have, contrary to Regulation (EC) No 
883/2004,  a  general  provision  concerning  cross-border  recognition 
of  facts  or  events.  Nevertheless,  during  the  proceeding  Mr  Adanez 
Vega  referred  to  the  fact  that  under  German  legislation  periods  of 
military service completed in Germany are to be treated as periods 
of  insurance.  He  had  done  his  military  service  in  Spain.  According 
to  Mr  Adanez  Vega,  Article  3  of  Regulation  (EEC)  No  1408/71, 
which  forbids  any  discrimination  based  on  nationality  between 
EU  nationals,  required  that  his  military  service  in  Spain  had  to  be 
assimilated to military service in Germany. In other words: in his eyes 
there was no need to examine whether the conditions for applying 
the aggregation provisions were fulfilled. The CJ rejected this thesis. 
The period of military service completed in Spain could only be taken 
into account if the conditions for applying the aggregation provisions 
were fulfilled. The CJ said that Article 3 of Regulation (EEC) No 1408/71 
applies only ‘subject to the special provisions of the regulation’. The 
CJ  continued  by  referring  to  the  fact  that  in  the  present  case  the 
regulations  contain  special  provisions,  namely  Articles  67  and  71, 
which  are  designed  to  govern  the  entitlement  to  unemployment 
benefits  of  an  unemployed  person  who  has  completed  periods  of 
insurance or employment under the legislation of another Member 
State.  These  special  provisions  displace  the  general  principle  of 
equality enshrined in Article 3 of Regulation (EEC) No 1408/71.

68

vII.  The FIrST and STIll very 
ImPorTanT InSTrumenT 
For CroSS-border 
healThCare

The European coordination of social security was the 
first and, for a long time, the only instrument for cross-
border healthcare in the EU.

Thanks to the coordination system, all EU nationals 
who are insured under the legislation of a Member 
State are entitled to benefits in kind which become 
necessary on medical grounds during a stay in anoth-
er Member State, taking into account the nature of 
the  benefits  and  the  expected  length  of  stay (320). 
The procedure for getting such non-planned treat-
ment  has  been  simplified (321)  in  view  of  enabling 
the introduction of the European health insurance 
card in 2004. The holder of such a card is entitled to 
benefits in the Member State of stay in accordance 
with the legislation of that state, as though he/she 
were insured in that Member State. The European 
health  insurance  card  has  become  an  important 
symbol  of  Europe  for  many  of  its  citizens.  There 
are  now  more  than  172  million  European  health 
insurance  cards  in  circulation.  The  holder  of  the 
card  has  direct  access  to  the  healthcare  provider.  
The  card  also  guarantees  that  the  issuing  Mem-
ber State will fully refund the costs to the Member 
State of stay.

For  travelling  to  another  Member  State  with  the 
purpose  of  getting  healthcare  there,  the  current 
Regulation (EEC) No 1408/71 (322) as well as the new 
Regulation (EC) No 883/2004 (323) always requires pri-
or authorisation, both for hospital care and for non-
hospital care. The requested authorisation cannot be 
refused (324) if the treatment in question is among the 

(

(

(

(

320

)  Article  22(1)(a)  of  Regulation  (EEC)  No  1408/71;  Article  19(1)  of 

Regulation (EC) No 883/2004.

321

)  Regulation (EC) No 631/2004 of 31 March 2004 (OJ L 100, 6.4.2004).

322

)  Article 22(1)(c).

323

)  Article 20(1).

(

324
) 

Instead of the words ‘cannot be refused if…’ laid down in Article 22(2) 
of Regulation (EEC) No 1408/71, the new Regulation (EC) No 883/204 
uses in Article 20(2) a more positive terminology: ‘the authorisation 
shall be accorded where…’.

Rob Cornelissen

benefits provided for by the legislation of the com-
petent state and where the treatment in question in 
that  Member  State  cannot  be  given  within  a  time-
limit  which  is  medically  justifiable (325),  taking  into 
account the current state of health and the probable 
course of the illness of the insured person.

When authorisation is granted the person is entitled 
to the benefits in the state of stay in accordance with 
the legislation of that Member State, as though he/she 
were  insured  in  that  Member  State. This  means  that 
the cost of the treatment will be borne by the compe-
tent Member State according to the rates applicable in 
the Member State of stay. In addition, the insured per-
son  will  be  entitled,  upon  request,  to  the  difference, 
if  any,  between  the  reimbursement  rates  applied  in 
the Member State of stay and the rates applied for the 
same treatment in the competent Member State (326). 
In  many  cases  there  will  be  direct  payment  by  the 
institution without the patient having to pay at all.

As we all know, there is now a second way to obtain 
planned cross-border healthcare, namely to invoke 
directly the Treaty provisions on free movement of 
goods and freedom to provide services as interpret-
ed by the CJ (327). This means that no authorisation 
is  required  for  non-hospital  care.  In  that  case  the 
patient has always to pay first and can claim reim-
bursement by the competent institution after return 
according to the rates applicable in the competent 
state. If the rate in the Member State of treatment is 
higher than in the competent state, the patient will 
not be entitled to an additional reimbursement.

(

(

325

)  Article 22(2) of Regulation (EEC) No 1408/71 as interpreted by the CJ 
in its judgments of 23 October 2003, Case C-56/01 Inizan [2003] ECR 
I-12403; and of 16 May 2006, Case C-372/04 Watts [2006] ECR I-4325; 
Article 20(2) of Regulation (EC) No 883/2004. 

326

)  Article  26(7)  of  the  new  implementing  regulation,  in  line  with  the 
CJ’s judgment of 12 July 2001, Case C-368/98 Vanbraekel [2001] ECR 
I-5363.

(

327
) 

In  particular  judgments  of  28  April  1998,  Cases  C-120/95  Decker 
[1998]  ECR  I-1831,  and  C-158/96  Kohll  [1998]  ECR  I-1931;  of  12  July 
2001  Cases  C-368/98  Vanbraekel  [2001]  ECR  I-5363,  and  C-157/99 
Smits-Peerbooms [2001] ECR I-5473; of 13 May 2003, Case C-385/99 
Müller  Faúré  [2003]  ECR  I-4509;  of  23  October  2003,  Case  C-56/01 
Inizan  [2003]  ECR  I-12403;  of  18  March  2004,  Case  C-8/02  Leichtle 
[2004] ECR I-2641; of 16 May 2006, Case C-372/04 Watts [2006] ECR 
I-4325;  of  15  June  2006,  Case  C-466/04  Acereda  Herrera  [2006]  ECR 
I-5341;  and  of  19  April  2007,  Case  C-444/05  Stamatelaki  [2007]  ECR 
I-3185.

A system of prior authorisation for obtaining hospi-
tal care may, under certain conditions, be justified. 
The  conditions  for  obtaining  such  prior  authorisa-
tion must be based on objective and non-discrim-
inatory  criteria  which  are  known  in  advance.  A 
person having obtained authorisation will be reim-
bursed at the most favourable rate (328).

In July 2008, the Commission adopted a proposal for 
a directive on the application of patients’ rights in 
cross-border healthcare (329). This proposal is based 
on  the  assumption  that  regulations  coordinating 
the  social  security  schemes  provide  the  general 
tool for patients who cannot get healthcare within 
a reasonable period of time. The idea is that where 
the conditions set by Regulation (EC) No 883/2004 
are  met,  then  this  regulation  shall  apply. The  pro-
posal  intends  to  complement  this  regulation  by 
providing a framework for patients seeking health-
care abroad for other reasons. Obviously, one of the 
main  points  that  will  be  discussed  in  the  months 
to come is the coherence of this proposal with the 
rules laid down in Regulation (EC) No 883/2004 and 
its implementing regulation. 

vIII. ConCluSIonS

In  my  presentation  I  have  focused  on  a  number 
of  achievements  by  the  Community  regulations 
coordinating the various social security schemes of 
Member States. It is undeniable that these regula-
tions provide a very high standard of protection in 
the field of social security for people moving within 
the  EU.  On  a  considerable  number  of  points  the 
rights of EU citizens will be further improved under 
the new Regulation (EC) No 883/2004. This does not 
mean, however, that all the problems in the field of 
social security have been solved. Far from it.

It is the responsibility of the legislature, and in partic-
ular the Commission who has the right of initiative, 

328(
) 

Judgment  of  12  July  2001,  Case  C-368/98  Vanbraekel  [2001]  ECR 
I-5363, point 31. 

329(

)  Proposal of 2 July 2008 (COM(2008) 414 final).

69

50 years of Social Security Coordination 

Past – Present – Future

to check on a regular basis whether the Community 
regulations  still  meet  today’s  requirements.  This 
could  mean  that  the  rules  need  to  be  adapted  or 
that  choices  once  made  by  the  legislature  have  to 
be revised as a result of developments in national or 
Community legislation, in the case-law of the CJ, or 
in the social or economic environment.

As to the response of the coordination rules to devel-
opments  in  national  legislation,  it  is  true  that  the 
existing coordination system has been able to deal 
with  the  introduction  of  a  whole  set  of  new  ben-
efits  in  national  legislation  of  the  various  Member 
States. But we have mainly the CJ to thank for this 
flexibility  rather  than  the  legislature.  For  instance, 
despite  efforts  made  during  the  negotiations  on 
the Commission proposal aimed at simplifying and 
modernising  Regulation  (EEC)  No  1408/71,  it  has 
not  been  possible,  apart  from  one  exception (330), 
to  include  provisions  specifically  devoted  to  long-
term care benefits in Regulation (EC) No 883/2004. 
There  are  now  signals  that  the  legislature,  after 
the  CJ’s  judgment  in  case  C-299/05 (331),  is  encour-
aged  to  reopen  the  debate  on  the  insertion  of  a 
chapter ‘care benefits’ into the new Regulation (EC)  
No 883/2004. The insertion of such a chapter devot-
ed  to ‘care  benefits’  would  be  a  very  positive  step, 
enabling  a  more  balanced  coordination  system  to 
the benefit of the citizens in cross-border situations.

Developments  in  Community  legislation  and  the 
introduction  of  European  citizenship  also  have  a 
bearing  on  the  coordination  rules.  In  fact,  these 
developments  have  given  rise  to  a  number  of 
fundamental  questions.  To  what  extent  could  the 
coordination  system  set  up  by  Regulation  (EC)  
No  883/2004  be  challenged  under  Articles  12  and 
18 EC? I referred to Directive 2004/38/EC as being 
the  single  Community  instrument  dealing  with 
the  right  to  move  and  to  reside  within  the  Union.  

(

330

)  Article  34  of  Regulation  (EC)  No  883/2004  aims  at  preventing  an 
overlap  of  long-term  care  benefits  in  cases  where  care  benefits  are 
provided in one Member State in the form of a cash benefit and in 
another in the form of a benefit in kind.

(

331
) 

Judgment of 18 October 2007, Case C-299/05 Commission v Council 
and Parliament [2007] ECR I-8695.

What is the relationship between this directive and 
the  separate  coordination  system  set  up  by  Regu-
lation  (EC)  No  883/2004  for  the ‘special  non-con-
tributory benefits’? Which legal instrument should 
take precedence? Do persons invoking Regulation 
(EC)  No  883/2004  (or  the  current  Regulation  (EEC) 
No  1408/71)  in  order  to  claim  a  special  non-con-
tributory benefit in the Member State in which they 
reside, put their right of residence at stake because 
they  no  longer  fulfil  the  requirements  for  having 
a  right  to  reside  in  the  host  state  under  Directive 
2004/38/EC?  Or  is  it  just  the  opposite:  do  persons 
entitled  to  a  minimum  subsistence  benefit  of  the 
host  state  thanks  to  Regulation  (EC)  No  883/2004 
(or  (EEC)  No  1408/71)  automatically  fulfil  the  sub-
sistence requirement for obtaining or maintaining 
residence  rights  under  Directive  2004/38/EC (332)? 
These questions have to be clarified.

As  to  developments  in  the  case-law  of  the  CJ,  it  is 
regrettable that the case-law on cross-border health-
care, based on the Treaty provisions on the free move-
ment of goods and on the freedom to provide services, 
has  not  been  fully  reflected  in  the  text  of  the  new 
Regulation (EC) No 883/2004. When the chapter ‘sick-
ness benefits’ was negotiated in the Council in 2002, a 
number of Member States expressed their view that 
the  case-law  existing  at  that  time  did  not  concern 
their systems. This was a missed opportunity. It is now 
likely that we have to face the coexistence of two legal 
instruments dealing with cross-border healthcare.

Developments  in  the  socioeconomic  environment 
could also require a rethink of the coordination rules. 
The  dominant  role  of  the  lex  loci  laboris (333)  for  the 
determination of the applicable legislation has been 
maintained in the new Regulation (EC) No 883/2004 
and  the  principle  of  the  unity  of  the  applicable 

(

(

332

)  Prof.  Herwig  Verschueren, ‘European  (internal)  migration  law  as  an 
instrument for defining the boundaries of national solidarity systems’, 
European  Journal  of  Migration  and  Law,  2007,  307–346.  See  also 
the  Tress  Think  Tank  report  2008:  The  relationship  and  interaction 
between  the  coordination  regulations  and  Directive  2004/38/EC, 
available on the Tress website (http://www.tress-network.org).

333

)  This  means  that  an  economically  active  person  is  subject  to  the 
legislation  of  the  Member  State  in  the  territory  of  which  he  is 
employed  or  self-employed,  even  if  he  resides  in  the  territory  of 
another state.

70

Rob Cornelissen

legislation has even been strengthened by this new 
regulation.  This  does  not  mean,  however,  that  this 
issue  is  no  longer  on  the  agenda.  On  the  contrary, 
the  question  has  to  be  addressed  of  whether  the 
rules  of  Regulation  (EC)  No  883/2004  on  conflicts 
of  law  meet  the  requirements  deriving  from  new 
forms  of  mobility (334).  The  Commission  launched  a 
consultation procedure last year and the Think Tank 
of Tress has been asked to deepen the reflections on 
this issue (335). It is likely that, in the framework of this 
process, the fundamental question will be raised of 
whether or not it is appropriate to modify some core 
concepts of the rules on conflict of law, including the 
dominant role of the lex loci laboris and the unity of 
the applicable legislation.

In  order  to  guarantee  that  people  who  make  use  of 
their right to free movement are not penalised in the 
field of social security, it is not enough to legislate. A 
correct and smooth application of these rules is very 
important indeed. Of course, the Commission has, as 
guardian of the Treaty, a responsibility here. But a cor-
rect application of the rules has in the first place to be 
guaranteed  at  national  level.  In  the  Member  States, 
public  authorities,  institutions,  social  partners,  judg-
es,  lawyers,  NGO  representatives  and  other  experts 
are  confronted  daily  with  questions  of  interpreta-
tion  and  implementation  of  the  coordination  rules. 
Representatives of public authorities and institutions 
already liaise at national level and often attend meet-
ings at Community level in order to discuss problems 
of  implementation.  This  is,  however,  not  necessarily 
the  case  for  the  other  partners  involved  —  lawyers, 
judges,  social  partners,  NGO  representatives  and 
other experts. In order to strengthen their expertise, 
as well as for networking at national level between all 

the actors involved, the Commission decided six years 
ago to create a network on the coordination of social 
security.  This  network,  composed  of  independent 
experts in every Member State, organises, on a regu-
lar basis, seminars in all Member States. A Commission 
representative  is  always  present  at  these  seminars. 
The network, which is known under the name Tress, 
also  publishes  an  annual  report  on  the  application 
of the coordination rules. This report is not only pre-
sented to the Commission, but is also the subject of an 
annual peer review of the Administrative Commission 
on Social Security for Migrant Workers. Thanks to the 
work of Tress, the Commission has now a much better 
view of how the Community rules are actually applied 
in  Member  States.  It  also  helps  to  identify  the  rules 
that need clarification, correction or adaptation.

A  smooth  application  of  the  coordination  rules  is 
also one of the main objectives of the new imple-
menting  regulation.  It  aims  at  achieving  a  more 
efficient and closer cooperation between the insti-
tutions.  Exchange  of  information  will  happen  by 
electronic  means.  The  implementing  regulation 
contains other provisions aimed at a smooth appli-
cation of the rules, such as a set of provisions on the 
provisional application of legislation, as well as on 
provisional granting of benefits (336). The principle of 
good administration is reflected in clear provisions 
of  Regulation  (EC)  No  883/2004 (337),  avoiding  that, 
in case of difficulties in the interpretation or appli-
cation of the regulation, the citizen is sent from one 
institution to another.

In this way, the new coordination system, despite its 
shortcomings,  will  constitute  an  essential  contribu-
tion to European integration.

(

334

)  Commission  communication:  ‘Mobility,  an  instrument  for  more 
and  better  jobs:  the  European  job  mobility  action  plan  (2007–10)’ 
(COM(2007)773 final).

335(

)  A first report, ‘Towards a new framework for applicable legislation’, is 
already available on the Tress website (http://www.tress-network.org). 

336(

)  Article 6. 

337(

)  Article 76(4) and (6) of Regulation (EC) No 883/2004.

71

50 years of Social Security Coordination 

Past – Present – Future

APPLiCATiON  OF ThE  COORdiNATiON  
REguLATiON  iN  ThE  CONTEx T OF 
dECENTRALiSATiON  ANd  REgiONALiSATiON  
iN  mATTERS OF SOCiAL  SECuRiT y

Eberhard Eichenhofer
Friedrich-Schiller-University, Jena (Germany) 

Born 1950, Studies in Law and Political Sciences in Tübingen and Saarbrücken, 
1979  Doctoral  Degree  („Leitende  Angestellte  als  Begriff  des  Unternehmens-
rechts“), 1980 - 1982 Law Clerk (Bundessozialgericht), 1982 - 1989 Research Fellow 
(Max-Planck-Institute for Foreign and International Social Security Law: Studies 
and Inquiries on International and Comparative Welfare Law), 1987 “venia leg-
endi” = Habilitation Saarbrücken (Civil, Labour and Social Security, Comparative 
and Private International Law), since 1989 Professor (Labour Law, Social Security 
Law and Civil Law) Universities of Osnabrück (till 1997) and Jena, 2003 Honorar  
Doctor  –  University  Gothenburg,  Publications:  Social  Security  Law  in  Canada, 
1984;  International  Social  Security  Law  and  Private  International  Law,  1987;  
Social  Security  Law  of  the  USA,  1991;  International  Social  Security  Law,  1995, 
1997 2nd ed.; Social Security Law, 1995; 1997 2nd ed., 2000 3rd ed., 2003 4th 
ed., 2004 5th ed., 2007 6th ed.; Social Security Law of the EU, 2001, 2003 2nd ed., 
2006 3rd ed.; History of the Welfare State in Europe, 2007; EU labour law, 1998, 
2002, 2008, Welfare State and Globalization, 2009

I. 

InTroduCTIon

a.  European coordination law

The  coordination  regulations  on  social  securi-
ty  —  as  elaborated  by  Regulation  No  3 (338),  Regu-
lation  (EEC)  No  1408/71 (339)  and  Regulation  (EC)  
No 883/2004 (340) — are not only the oldest, but also 
one of the most important, parts of European legis-
lation. Their provisions are addressed to the Mem-
ber States and have a double impact on the latter’s 
legal  system:  firstly,  they  are  to  be  implemented 

(

(

(

338

)  OJ 30, 16.12.1958, p. 561. 

339

)  OJ  L  149,  5.7.1971,  p.  2;  M.  Fuchs,  Nomos-Kommentar  zum 
Europäischen  Sozialrecht,  2005 
(fourth  edition);  F.  Pennings, 
Introduction to European social security law, Antwerp, 2003 (fourth 
edition);  B.  Schulte,  ‘Supranationales  Sozialrecht’,  in  U.  Becker,  B. 
von Maydell and F. Ruland (eds), Sozialrechtshandbuch, 2008, fourth 
edition; S. Van Raepenbusch, La Sécurite des Travailleurs Européens, 
Bruxelles,  2001;  P.  Hanau,  H-D.  Steinmeyer  and  R. Wank,  Handbuch 
des Europäischen Arbeits- und Sozialrechts, München, 2002.

340

)  OJ L 166, 30.4.2004; E. Eichenhofer (ed.), 50 Jahre nach dem Beginn — 
neue Regeln über die Koordination sozialer Sicherheit, Berlin, 2009; F. 
Marhold (ed.), Das neue Sozialrecht der EU, Wien, 2005; B. Spiegel, ‘Die 
neue Sozialrechtskoordinierung. Überlegungen zur Verordnung (EG) 
No 883/2004’, ZIAS 2006, 85.

by the social security administrations of the Mem-
ber States; secondly, they give shape to the Mem-
ber  States’  social  security  legislation.  This  double 
impact  ushers  in  two  different  dimensions.  By  its 
unique  choice-of-law  provisions,  European  coor-
dination  law  determines  the  international  scope 
of application of the Member States’ social security 
systems  identically  and,  by  stipulating  the  equal 
treatment of EU citizens, equalising periods of cov-
erage  or  facts,  giving  access  to  benefits  in  kind  to 
beneficiaries  residing  or  staying  outside  the  com-
petent Member State and exporting all benefits in 
cash,  European  law  makes  national  social  security 
law become internationally effective (341).

b.  A two-layer approach to law

Coordination  of  social  security  is  based  upon  two 
layers  of  law.  It  is  relational  in  character,  insofar 
as  it  presupposes  and  links  two  levels  of  law:  the 

(

341

)  E. Eichenhofer, Sozialrecht der EU, 2010 (fourth edition), Tz 75 et seq.

72

Eberhard Eichenhofer

supranational  and  the  national.  European  law, 
hence, 
implies  the  very  existence  of  Member 
States’  social  security  legislation (342). The  former  is 
addressed  to  the  latter,  and  without  the  latter  the 
former can neither work nor even have been con-
sidered!  A  second  characteristic  of  EC  coordina-
tion  law  is  the  interrelation  between  two  or  more 
national social security legislations with respect to 
cross-border cases, i.e. cases with links to more than 
one national system of social security.

European  coordination  of  social  security  law  is 
made to bring about certain elementary achieve-
ments within each Member State’s social security 
system: to avoid both double protection as loop-
holes  in  protection  and  to  safeguard  each  social 
security  right,  whenever  acquired  under  the  leg-
islation of one Member State, even if the entitled 
person  has  lost  any  link  to  the  Member  State  in 
which  the  acquisition  once  took  place.  As  and 
because European law intends to govern the laws 
of the Member States, both sets of legislation are 
deeply interrelated.

C.  Member States as nation states

law 

In  this  two-layer  approach,  European 
is 
addressed  to  the  Member  States’  legislations  in 
their entirety. It is therefore built upon the idea that 
there is a unique, homogenous and centralised leg-
islation, thoughtfully elaborated and cultivated by 
each  Member  State.  At  first  sight,  this  assumption 
seems  to  be  sound  —  above  all  in  social  security. 
The modern idea of social security is deeply rooted 
in  the  nation  state.  Social  historians  conceive  Bis-
marck’s social insurance project of 1881 as a corol-
lary to the formation of the German Empire of 1871. 

So  they  speak,  when  referring  to  social  insurance, 
of the decisive tool for ‘the internal formation of the 
German Empire’ (343).

And  this  observation  need  not  be  restricted  to  a 
specific  country,  but  reflects  and  expresses  the 
general European experience. Anthony Giddens (344) 
underlines  this  context  precisely,  when  looking  at 
the formative history of the European social welfare 
state in the 20th century: ‘Mobilising the economy 
and society was the prime demand in wartime; the 
enhanced role of the state in [the] First World War 
introduced  forms  of  social  and  economic  provi-
sions that were solidified and extended during the 
Second  [...].  The  welfare  state  has  always  been  a 
national state [...]. One of the main factors impelling 
the development of welfare systems has been the 
desire  on  the  past  of  the  governing  authorities  to 
promote national solidarity [...]. From early days to 
late on, welfare systems were constructed as part of 
a more general process of state building. Who says 
welfare state says nation state.’

This concept received a late and extremely promi-
nent  reconstruction  in  T.  H.  Marshall’s (345)  theory 
of  social  citizenship.  Today  this  reasoning  has 
achieved — despite its misleading and even danger-
ous  nationalistic  undertone  —  worldwide  accept-
ance as the most adequate theory to legitimise the 
modern  welfare  state  as  the  creation  of  individual 
social  rights  to  integrate  each ‘citizen’  into  a  given 
welfare state and society.

Many  international  examples,  however,  show  that 
social  security  and  the  nation  state  do  not  neces-
sarily go hand in hand. The US, Canadian and Swiss 
systems  of  social  security  are  characterised  by  a 

342(

)  S.  Chardon,  ‘Principles  of  coordination’,  in  Y.  Jorens  and  B.  Schulte, 
Coordination  of  social  security  in  connection  with  the  accession  of 
central  and  eastern  European  states,  the  ‘Riga  Conference’,  Brugge, 
1999,  pp.  43,  46: ‘Coordination  relates  to  regulating  the  relationships 
between national social security systems on the basis of principles and 
techniques aiming at the protection of entitlements to social security by 
people who move, without touching the substance of these systems’; F. 
Pennings, Introduction to European social security law, Antwerp 2003 
(fourth  edition),  p.  6: ‘Coordination  rules  are  rules  intended  to  adjust 
social security schemes in relation to each other’ (6).

343(

)  M.  Stolleis,  ‘Die  Sozialversicherung  Bismarcks’, 

in  H.  F.  Zacher 
(ed.),  Bedingungen  für  die  Entstehung  und  Entwicklung  der 
Sozialversicherung, Berlin, 1979, 387 et seq.

344(

)  A. Giddens, Beyond left and right, 1994, p. 136 f.

345

(

)  T. H. Marshall (1949), ‘Citizenship and social class’, in T. H. Marshall, 
Sociology at the crossroads and other essays, London, 1963, p. 67 
et seq.

73

50 years of Social Security Coordination 

Past – Present – Future

complex  combination  of  federal  institutions  and 
state,  provincial  or  canton  components (346).  As  all 
federal states are based on the distinction and divi-
sion  of  legislative  powers  between  two  levels  of 
government, it is not uncommon for social security 
programmes to not only be established by acts of 
national legislation, but rather by the autonomous 
legislation  of  a  regional  unity,  vested  with  legisla-
tive  power  within  the  legal  framework  of  the  fed-
eral system of a nation state. And even local entities 
play  a  crucial  role  in  social  policy  —  not  only  as 
service providers but also as political actors (347) — 
and this has been true for centuries.

When — half a century ago — the process of Euro-
pean  integration  was  inaugurated,  five  of  the  six 
founding  Member  States  were  centralist  nation 
states. And within the only, then participating fed-
eral state, social policy was also a matter of merely 
national concern — due to its original determination 
to  contribute  to  nation  building  by  social  legisla-
tion! Therefore, in its formative era the coordination 
regulation  was  not  confronted  with  decentralisa-
tion and regionalisation in social security (348).

But  times  are  changing.  As  to  the  internal  struc-
ture of nation states, one can see that devolution 
and regionalisation are increasing. For example, in 
the United Kingdom, France, Spain, Italy and Bel-
gium a momentum towards regionalisation can be 
observed, according to which these former highly 
centralised nation states are keen  to decentralise 
their internal legislative and administrative struc-
tures.  EU  examples  of  this  trend  are  the  regional 

346(

)  U. Becker, Staat und autonome Träger im Sozialleistungsrecht, Baden-
Baden,  1996;  Le  fédéralisme  social,  lien  social  et  politiques,  2006; 
S.  Vansteenkiste,  Sociale  Zekerheid,  federalisme  en  de  Europese 
Gemeenschap, 1995; S. Vansteenkiste and M. Taeymans (eds), Sociaal 
Beleid  en  Federalisme,  Staatsrechtsconferentie,  1998,  Vlaamse 
Juristenvereniging.

347(

)  Various  authors,  Le  autonomie  locali  nei  paesi  della  Comunità 

Economica Europea, Napoli, 1981.

348(

)  D.  Merten  (ed.),  Föderalismus  und  Europäische  Gemeinschaften, 
Berlin,  1990  (second  edition);  H.-J.  Blanke,  Föderalismus  und 
Integrationsgewalt. Die Bundesrepublik Deutschland, Spanien, Italien 
und Belgien als dezentralisierte Staaten in der EG, Berlin, 1991.

74

legislation  on  health-  and  long-term  care (349)  and 
the labour market, and its respective financing in 
Belgium (350), and social assistance, healthcare and 
labour  market  measures  in  Spain (351);  Canada (352) 
and  the  USA (353)  provide  for  an  even  broader 
sphere of provincial and state legislation, as work-
men’s compensation and social assistance, labour 
market (USA) and, finally, contribution-based old-
age and disability insurance (Quebec and Canada) 
are  driven  by  regional  legislations  and  run  by 
regional administrations.

d.  Three key questions

In  the  context  of  the  European  coordination  law, 
this change gives rise to profound questions, which 
are not easily solved. There are three key questions 
at stake, and they demand a clear answer.

•	

•	

•	

Has  European  law  any  impact  on  the  social 
security  legislation  of  regional  autonomous 
legislation in the Member States (II)?
If so, does the European coordination law apply 
directly to interregional relations of social secu-
rity within a single Member State (III)?
If so, what impact does the European coordina-
tion law have on the interregional coordination 
of social security (IV)?

The answers are provided in the following chapters, 
with the aim of contributing to a better understand-
ing, or — in academic terms — to a ‘theory on the 
interrelation  of  European  and  interregional  social 
security law’ (V). 

(

(

(

(

349

)  Y. Jorens, ‘Défédéralisation de la sécurité sociale en Belgique: l’exemple 

des soins de longue durée’, Lien Social 2006, p. 129.

350

)  P.  Pochet  and  P.  Reman,  ‘La  sécurité  sociale  en  Belgique:  entre 

régionalisation et européanisation’, ibid., 89–102.

351

)  M.  Chapales,  ‘La  protection  sociale  dans  l’Etats  des  Autonomies. 
L’enjeu  de  fédéralisme  progressive  entre  l’autonomie  régionale  et 
la  solidarité  internationale’,  ibid.,  103–117;  J.  L.  de  Castro  Ruano,  La 
emergente  participaciòn  politica  de  las  regiones  en  el  proceso  da 
construciòn europea, Bilbao, 1994.

352

)  E. Eichenhofer, Sozialrecht Kanadas, Baden-Baden, 1984; G. Boismean, 
‘Les nouveaux visages de vieux démons’, ibid., 57–71; P. Graefe and M. 
Levesque, ‘La nouvelle gouvernance fédérale et les politiques sociales 
au Canada’, ibid., 75–88.

(

353

)  E.  Eichenhofer,  Recht  der  sozialen  Sicherheit  in  den  USA,  Baden-

Baden, 1991.

Eberhard Eichenhofer

II.  euroPean CoordInaTIon 

b.  Member States’ homogenous legal 

and The member STaTeS’ 
regIonal PublIC enTITIeS 
In SoCIal SeCurIT y

a.  Legal structure of the EC/EU

The European Communities (EC) and the European 
Union  (EU)  were  created  by  the  Member  States. 
They  are  recognised  in  the  framework  of  interna-
tional  public  law  as  independent  and  sovereign 
nation  states.  Acts  of  European  legislation,  which 
are based upon a specific provision in the primary 
legislation  of  the  EC  or  EU,  are  paramount  to  the 
legislation of each Member State. As to its source, 
supranational  law  has  priority  over  the  legislation 
of each Member State. From this superiority stems 
its strong effect, as the law of the Member States is 
replaced by EC law (354).

This  effect  of  supranational  legislation  can  be 
explained  by  the  legal  construction  of  the  EC  and 
EU.  The  legislative  power  of  both  supranational 
entities stems from the previous transfer of power, 
once held by the Member States (355). This transfer is 
comprised  in  the  primary  legislation,  wherein  the 
Member States gave up rights and conferred them 
to the European institutions. If the legislative power 
of the European institutions is based on a transfer 
of the Member States’ legislative power, one might 
doubt whether such a transfer comprises the legis-
lative  rights  established  within  the  Member  State, 
but  endowed  by  the  Member  State  to  regional 
public entities with their own legislative rights and 
privileges  —  as  is  the  case  in  Scotland,  Northern 
Ireland,  Wales,  the  autonomous  communities  in 
Belgium and Spain, the regions in Italy and France, 
the cantons in Switzerland and, finally, the Länder in 
Austria and Germany.

(

(

354

)  Case C-352/06 Bosmann [2008] ECR I-3827, however, gives space to a 
more favourable choice of law rules to be found in the autonomous 
legislation of each Member State.

355

)  Case 26/62 Van Gend & Loos [1963] ECR English special edition, p. 1; 
Case 6/64 Costa v ENEL [1964] ECR 1253; R. Streinz, in Michael Sachs, 
Grundgesetz, 2007 (fourth edition), Rn. 52 f. as to the provision of the 
German Basic Law (Article 23) which allows the Federal Republic to 
transfer national rights to a supranational unit.

entities in social welfare?

Regional  public  entities  are  autonomous,  but  not 
insular,  entities.  They  are  embedded  in  the  legal 
order of a Member State, to which they belong as 
an  integral  part. The  regional  units  of,  and  in,  the 
Member States are not independent (even though 
some  of  them  have  foreign  ‘embassies’),  but  are 
incorporated in a given Member State. So, the leg-
islation enacted by a Member State at the national 
level also becomes binding for the regional authori-
ties. On the other hand, making them autonomous 
agencies,  endowed  with  their  own  and  independ-
ent  legislative  powers,  means  to  leave  them  with 
their own spheres of autonomous action, in which 
they can decide and determine their policy without 
any national intrusion or intervention. So both lev-
els of government are relatively independent from 
one another.

Finally, in Europe there exists a strong — i.e. old — 
tradition of local self-government, and this tradition 
is also important for social policy (as it still prevails 
today in many Nordic countries). This is due to the 
fact  that,  before  the  nation  state  came  into  being 
during and after the French Revolution, the public 
authority  was  carried  out  by  the  municipalities.  In 
the formative era of social services and social ben-
efits since the 11th century, the towns took over a 
crucial role, hospitals and almshouses, workhouses 
and  houses  of  correction,  homes  for  the  disabled, 
elderly,  orphans  and  unmarried  mothers  were 
erected and kept by local communities — not only 
in a few cities, but all over Europe.

There  is  a  European  social  model  much  older 
than  the  national  welfare  state.  For  centuries  the 
municipalities were the most important and pow-
erful public institution to safeguard public welfare. 
Until the end of the 16th century they played a key 
role  in  public  welfare,  and  from  the  17th  century 
onwards, in line with the formation of the territo-
rial state, the latter took over an increasing role in 
the  administration  of  public  welfare.  In  the  era  of 

75

50 years of Social Security Coordination 

Past – Present – Future

‘enlightened  absolutism’  during  the  second  half 
of the 18th century, the territorial state assumed a 
pivotal  and  universal  role  in  the  organisation  and 
deliverance  of  public  welfare.  At  the  end,  it  took 
over  the  mandate  to  control  and  administer  the 
whole fabric of economic and social life, which left 
little room for citizens’ individual choice and discre-
tion. When analysing the interrelation of European 
and 
interregional  social  security  coordination, 
these historical traditions are of political relevance, 
because the decentralisation movements of today 
are attempting to follow in the paths set by the ter-
ritorial states during the era before the nation state 
came into existence.

C.  Sources

In the legal framework of the EC coordination leg-
islation  on  social  security,  there  is  no  specific  pro-
vision to answer the question raised. So, the issue 
of whether law has any impact on acts of regional 
public  entities  in  social  security  is  far  from  clear. 
Under  those  circumstances,  the  primary  and  sec-
ondary legislation and, finally, case-law need to be 
examined, in order to find out what the legal answer 
under European law could be.

1.  Primary legislation

Seen  from  the  perspective  of  primary  legislation, 
according  to  Article  6(3)  of  the  EU  Treaty,  the  EU 
respects the ‘national identity of [its] Member States’. 
This  provision  will  be  elaborated  more  explicitly  in 
Article  4(2)  of  the  EU Treaty,  as  enacted  in  the  Lis-
bon  Treaty.  Regarding  this  text,  the  commitment 
to  respect  national  identity  implies  the  acceptance 
of  Member  States’  fundamental  and  constitutional 
structures,  regional  and  local  self-administration 
included. Article 136 of the EC Treaty  obliges Euro-
pean  social  policy  to  respect  the  traditions  and 
peculiarities of each Member State. In addition, the 
Committee of the Regions (Article 263 of the EC Trea-
ty, Article 305 of the Treaty on the Functioning of the 
EU (TFEU)) attests to the fact that both the EC and the 
EU  are  generally  aware  of  regional  administration, 

giving it special recognition and striving to integrate 
it into the legal framework of the EC and EU.

2.  Secondary legislation

A further indication regarding whether the coordina-
tion regulation on social security law can be applied 
to legislative acts of regional public entities can be 
found in Article 1(j) of Regulation (EEC) No 1408/71 
(Article 1(l) of Regulation (EC) No 883/2004). Therein 
the term ‘legislation’ is defined as ‘in respect of each 
Member State, laws, regulations and all other imple-
menting  measures,  relating  to  the  social  security 
branches covered by Article 3(1)’. It does not follow 
from this definition that the legislative act need be 
taken  by  the  Member  State  itself. This  follows  from 
Article 4(2) of Regulation (EEC) No 1408/71 (Article 3(2)  
of Regulation (EC) No 883/2004) pursuant to which 
the social rights to protect individuals against cer-
tain  risks  embedded  in  collective  agreements,  for 
example those on the formation and administration 
of unemployment insurance in Denmark or France, 
which bring about systems of social security based 
upon sources of private (i.e. collective labour) law, 
can  be  conceived  as  systems  of  social  security,  if 
and  because  they  do  replace  comparative  public 
law institutions.

This shows clearly that, in the context of coordina-
tion, each system established in the framework of 
national law is to be accepted as a social security 
system,  which  creates  an  entitlement  to  a  risk-
related  benefit  on  an  explicit  legal  basis  —  irre-
spective of whether it was enacted by national or 
regional  laws.  So  the  qualification  of  social  secu-
rity is independent of the authority which created 
the entitlement.

This  interpretation  is  also  shared  by  the  Court  of 
Justice  (CJ) (356).  According  to  the  CJ,  ‘legislation’ 
(Article  1(j)  of  Regulation  (EEC)  No  1408/71)  is  a 
very broad and vast concept. From this, one has to 
conclude that the legislative acts of decentralised 

(

356

)  Case 109/76 Blottner [1977] ECR 1141.

76

Eberhard Eichenhofer

bodies  of  regional  public  entities  are  to  be  con-
sidered  as  falling  under  the  general  rules  of  the 
European  coordination  regulations.  This  can  be 
demonstrated  also  by  provisions  in  the  annexes 
of  the  regulation  on  the  coordination  of  social 
security benefits, which explicitly refer to those of 
regional origin and concern.

3.  Case-law on the relevance of Community  
law for the legislation and administration  
of regional public entities

The CJ held in the judgment of 29 April 1999 (357) that 
Community law is not only binding for each nation-
al court of each Member State, but also for all their 
administrative bodies, including regional and local 
ones. They not only have to set aside all the provi-
sions contained in national law which do not con-
cur with European legislation, but they also have to 
make sure that all their decisions taken at the same 
time respect Community law precisely and in sub-
stance. So, for example, the Austrian Land Vorarlberg 
administration  has  to  give  access,  on  the  Austrian 
coastline at Lake Constance, to boat-parking facili-
ties  without  any  distinction  between  boat  owners 
based  on  their  (EU)  nationality.  As  to  freedom  of 
movement,  the  CJ  formally  declared  unlawful  the 
fact that a German Land refused to give access to a 
teacher’s education based on a work contract with 
the regional public entity (358). Regarding public pro-
curement  of  constructive  work  in  municipalities, 
local governments are also obliged to respect and 
follow  European  legislation (359).  According  to  the 
case-law of the CJ, a German Land’s public pension 
fund  is  bound  by  the  laws  on  anti-discrimination 
on the grounds of sexual orientation. Hence, it has 
to integrate same-sex couples in the protection for 
survivors,  if  married  couples  are  covered (360).  And 
regional  social  security  administrations  have  to 
respect  the  rules  of  Regulation  (EEC)  No  1408/71 

357(

)  Case C-224/97 Ciola v Vorarlberg [1999] ECR I-2517.

358(

)  Case  65/85  Deborah  Lawie  v  Land  Baden-Württemberg  [1986]  ECR 

2121.

359(

)  Case 103/88 Costanzo [1989] ECR 1839.

when levying social security contributions (361). So, in 
accordance with the CJ case-law, Flemish long-term 
insurance is also bound by the European coordina-
tion law (362), but the CJ held this to be self-evident, 
so it did not explain this issue further.

d. 

Justification

This  solution  can  be  explained  by  the  fact  that 
Community law is addressed to the Member States; 
if  they  delegate  their  legislative  or  administrative 
powers  to  other  internal  independent  institutions 
or entities, they cannot get rid of the commitments 
imposed on them by Community law (363). The nation 
state  was  originally  established  in  order  to  create 
the supremacy of the centre over the periphery (364). 
It  follows  from  this  that  national  law  is  superior 
to  regional  legislation.  Community  law  does  not 
address  the  Member  States  just  in  their  quality  as 
legislatures, but as an entire legal system at large! 
Because  of  this,  all  regional  and  local  elements  of 
the Member States’ legal systems are exposed to EC 
legislation in the same manner as national legisla-
tion (365). Ingolf Pernice characterises the impact of 
EC/EU law on the legal systems of the Member States 
as a three-layered — or, if taking into account the 
local communities as a further legislative authority, 
even  a  four-layered  —  approach,  in  which  EC/EU 
legislation  stands  as  the  first,  the  national  legisla-
tion  as  the  second,  the  regional  legislation  as  the 
third and, finally, the local level as the fourth level 
of a comprehensive system of federal governance, 
embedded in a European system of law. This shows 
clearly  that  in  a  multi-layer  structure  of  European 
governance  the  traditional  idea  of  national  sover-
eignty  is  no  longer  adequate  to  describe  EC/EU–
Member State relations. 

361(

)  Case C-103/06 Philippe Dervain [2008], not yet published.

362(

)  Case  C-212/06  Gouvernement  de  la  Communauté  française  et 
Gouvernement  wallon  v  Gouvernement  flamand  [2008],  not  yet 
published.

363(

)  R.  Monaco, ‘Politica  regionale  Comunitaria  e  regioni’,  in  F.  Cuocolo, 
R.  Monaco,  C.  Tesauro  et  al.,  Istituzioni  Comunitarie  e  Regioni,  III. 
Convegno Nazionale di Studi regionale, Napoli, 1990, pp. 27, 29.

364(

)  S.  Fabbrini,  ‘The  European  Union  in  an  American  perspective’,  in 
C.  Asell  and  C.  di  Paolo,  Restructuring  territoriality:  Europe  and  the 
United States, Cambridge, 2004, p. 163 et seq.

360(

)  Case C-267/06 Maruko [2008], not yet published.

365(
) 

I. Pernice, in H. Dreier (ed.), Grundgesetz, 1998, Bd. 2, Rn. 23, Article 23.

77

50 years of Social Security Coordination 

Past – Present – Future

III.  euroPean and 

InTerregIonal  SoCIal 
SeCurIT y law

a. 

Interregional social security law

If  within  a  Member  State  regional  public  entities 
are permitted to enact norms in the field of social 
security,  this  permission  is  not  to  be  restricted  to 
the substantive law to be created. So, on the basis 
of its authorisation, the regional unit is also permit-
ted,  for  example  in  social  welfare,  to  outline  the 
benefits, to determine the persons entitled and to 
run (or define who else is to run) the public entities 
which have to administer the benefits in question. 
The  legislative  power  comprises  two  further  ele-
ments,  i.e.  to  define  the  scope  of  application  and 
to  determine  the  effect  of  the  regional  system  of 
social security in space and time (366).

As  no  national  legislation  demands  to  establish 
legal  rights  and  obligations  worldwide  —  even 
though the text of substantial law is often written 
in  such  a  universalistic  language  —  no  regional 
legislation  within  a  Member  State  strives  to  cre-
ate  a  worldwide  web  of  social  protection.  Quite 
the  contrary!  Quite  often  regional  social  politics 
are  driven  by  a  more  parochial  approach,  which 
is occasionally full of social romanticism (367). They 
claim to increase social cohesion within a part of a 
Member State, and, in so doing, intend to exclude 
‘the  others’  from  the  regional  benevolence.  (This 
attitude  is  similar  to  Jean-Paul  Sartre’s  saying: 
‘L’enfer  —  c’est  les  autres’!)  Hence,  regional  social 
security combines inclusion with exclusion — and 
this is done on a clear legal basis.

366(

)  E.  Eichenhofer,  Internationales  Sozialrecht,  München,1994, Tz  11,  p. 

144 et seq.

367(

)  P.  Van  Parijs,  ‘Rechtvaardig  Sociaal  Beleid  in  een  Plurinationale 
Federale  Staat’,  in  Vansteenkiste  and  Taeymans,  No  9,  1998,  pp.  3, 
5  et  seq.  He  uses  the  very  strange  term  volksgemeenschap  to 
characterise  the  ‘interpersoonlijke  solidariteit  ...  binnen  een  zelfde 
ethnos (uiteraard niet raciaal maar cultureel gedefinieerd), omdat ze 
voldoende identificatie vereist’; against this odd interpretation: Danny 
Pieters, Het Sociaal Beleid in de Federale Rechtsorde, ibid., 13, 15: ‘ons 
staatsbestel. kent geen “volkgemeenschap” … ook gemeenschappen 
zijn territoriaal gedefinieerd’.

78

So, as each substantive law is made for a given space 
and time (368), an ‘inter-local’ or ‘inter-state’, ‘inter-pro-
vincial’ or ‘interregional’ law is required. The term is 
understood in the context of the conflict of laws or 
the  choice  of  laws.  In  this  perspective  it  becomes 
clear  that  interregional  and  international  law  are 
structurally  alike.  Both  are  necessary,  because  law 
is  made  by  a  regional  or  national  unit  in  the  legal 
framework of other regions or nations. In the world 
of today, international law is of overall importance, 
due to the fact that the law is brought above all by 
the nation states. If a Member State opens the door 
for regional legislation, it has to determine how to 
deal with the various regional legislations — above 
all  regarding  their  impact  on  the  persons  covered 
in  case  these  take  advantage  of  internal  mobility 
within the Member State.

From  a  historical  viewpoint,  national  legislation  is 
the  late  outcome  of  the  legal  development  of  the 
last two centuries. Before the nation state was cre-
ated,  legal  relations  were  based  on  laws  made  by 
territorial states — cities and dukedoms  — and in 
the medieval era law was based on the legislation 
of towns. As the city had been the predecessor  of 
the  modern  welfare  state,  the  inter-local  law  was 
the predecessor of international law. Above all, the 
founding fathers of international law — the Italians 
Bartolus  and  Baldus  —  established  their  leading 
ideas  on  the  fundaments  of  the  choice  of  law  by 
analysing the court rules established by the cities, 
when executing their legislative power.

Interregional law and international law have to give 
proper answers to more or less identical questions. 
Firstly,  how  is  the  scope  of  application  of  a  given 
law determined? In this context the space is to be 
defined in which the given law should become valid, 
i.e. applicable and socially relevant. Secondly, what 
are the effects of a given right? Shall it be restrict-
ed to the regional or national sphere, in which, by 
which and for which it had been established — or 
shall it become also meaningful to the beneficiary, 

(

368

)  E. Eichenhofer, Internationales Sozialrecht, 1994, Tz. 1 et seq.

Eberhard Eichenhofer

if  s/he  is  residing  or  works  outside  the  region  or 
nation state in another region or nation state?

b. 

Interregional and European 
coordination

As a national, a regional law can also be applied to 
the  ‘citizens’,  the  residents,  the  workers,  the  ones 
who  opted  for  it,  or  those  having  an  asset  in  the 
space of the legislative authority. So in both inter-
national as well as interregional law, there is a deci-
sion  to  be  made  between  the  lex domicilii,  the  lex 
patriae, the lex loci laboris, the lex contractus and the 
lex rei sitae. All these principles can be stipulated in 
order to determine the interregional or international 
scope of application of a given legal order.

As  to  the  second  question,  both  interregional  as 
well  as  international  law  are  confronted  with  the 
same type of alternative. Shall the substantive law 
of a region or nation state be only relevant within 
the  space  governed  by  it?  Or  shall  a  right  earned 
under the legislation of one region or nation state 
become also effective outside the governed space 
in other regions or nation states?

To  this  question  either  a  parochial  or  an  open-
minded answer can be given. Which type of answer 
is given not only depends on the state of mind of 
a  given  legislator.  A  parochial  answer  is  content 
with  verifying  an  acquired  right  in  the  regional 
or  national  space;  an  open-minded  answer,  how-
ever,  acknowledges  that  social  rights  are  human 
rights;  in  other  words,  the  means  to  supply  basic 
human needs! So, from this perspective of human 
rights  to  one  of  social  rights,  an  interregional  or 
international  protection  of  acquired  social  rights 
is  not  only  a  political  preference  but  also  a  legal 
necessity. But the latter requires a whole range of 
institutions of interregional or international coop-
eration, and above all the willingness to ensure a 
legal and administrative framework of social secu-
rity coordination.

EC  coordination  law  is  a  peculiar  form  of  interna-
tional social security law (369). The origin and purpose 
of this supranational law was and still is to replace, 
in  the  field  of  international  social  security  coordi-
nation,  all  bilateral  instruments  —  as  elements  of 
intergovernmental  legislation  and  based  on  inter-
national public law — by a supranational, European 
and multilateral legislation, which creates a unique 
international  social  security  law  applicable  to  all 
Member  States  directly  and  according  to  identical 
rules and principles.

Despite  the  fact  that  regions  are  integral  and 
dependent parts of the Member States and, hence, if 
they act as autonomous bodies they have to respect 
all  EC/EU  law  restrictions  and  demands  imposed 
on  the  Member  States  to  which  they  belong,  and 
irrespective of the overwhelming structural analo-
gies  to  be  drawn  between  the  international  and 
interregional  social  security  law,  one  might  doubt 
whether  EC  coordination  law  on  social  security 
can be applied to provisions of interregional social 
security law.

As interregional law is an integral part of the inter-
nal  law  of  each  Member  State,  one  has  to  bear  in 
mind that the scope of EC coordination law is not 
an  all-embracing  one,  but  is  limited  to  governing 
the  international  social  security  relations  between 
the  Member  States.  This  is  a  principle  in  CJ  case-
law which has a very profound basis in a constantly 
repeated  practice.  For  the  application  of  the  rules 
on  coordination,  the  CJ  did  not  demand  that  the 
respective persons make use of their fundamental 
freedoms (370). ‘The Court has [...] made clear that the 
Treaty  with  governing  freedom  of  movement  for 
persons and measures adopted to implement them 

369(

)  S.  Devetzi,  Die  Kollisionsnormen  des  Europäischen  Sozialrechts, 
Berlin,  2000;  E.  Eichenhofer,  Internationales  Sozialrecht,  München, 
1994; ibid., Sozialrecht der EU, 2010 (fourth edition); R. Schuler, Das 
Internationale Sozialrecht der Bundesrepublik Deutschland, 1988.

370(

)  Case  75/63  Unger  [1964]  ECR  379;  Case  31/64  Bertholet  [1965]  ECR 

111.

79

50 years of Social Security Coordination 

Past – Present – Future

cannot be applied to activities which have no factor 
linking them with any of the situations governed by 
Community  law  and  which  are  confined  in  all  rel-
evant  respects  within  a  single  Member  State’ (371). 
‘Such  is  in  particular  the  case  where  the  situation 
of a worker has factors linking it solely with a non-
member country and a single Member State’ (372).

The  application  of  EC  coordination  law,  hence, 
requires  a  cross-(Member  States’)-border  element. 
Interregional  relations,  however,  can  be  restricted 
to internal situations. This leading principle is also a 
cornerstone of CJ case-law, which can be identified 
in  many  judgments  relating  to  the  right  of  estab-
lishment (373),  the  freedom  of  movement (374),  the 
application  of  Regulation  (EEC)  No  1408/71 (375)  on 
social  security  for  third-country  migrants,  and  the 
concept  of  EU  citizenship (376).  Based  on  the  latter 
observation the CJ held that the legal status of an 
EU citizen cannot be deducted from the legal status 
of an individual and EU citizen, who lives and works 
only in one Member State and has not the slightest 
link to a second Member State.

The  CJ  held  that  the  language  rights  for  migrant 
workers,  contained  in  Article  84(4)  of  Regulation 
(EEC) No 1408/71, do not apply to a social security 
case  without  any  cross-(Member  States’)-border 
dimension (377).  So,  the  dispute  on  the  language 
rights of the various language communities in Bel-
gium is not a topic dealt with by EC social security 
coordination law. Therefore, it was hardly surprising 

(

(

(

(

(

(

371

)  Cases C-95/99, C-98/99 and C-180/99 Kahlil [2001] ECR I-7413; Case 
C-59/95  Moriana  [1997]  ECR  I-1071;  Case  C-153/91  Petit  [1992]  ECR 
I-4973;  Cases  C-64/96  and  C-65/96  Uecker  and  Jacquet  [1997]  ECR 
I-3171;  Cases  C-225/95,  C-226/95  and  C-227/95  Kapasakalis  [1998] 
ECR I-4239; Case C-18/95 Terhoeve [1999] ECR I-345.

372

)  Cases C-95/99, C-98/99 and C-180/99 Kahlil [2001] ECR I-7413; Case 
C-297/92 Baglieri [1993] ECR I-5211; Case C-60/93 Aldewereld [1994] 
ECR I-2991.

373

)  Case 20/87 Gauchard [1987] ECR 4879.

374

)  Case C-18/95 Terhoeve [1999] ECR I-345.

375

)  Cases C-95/99, C-98/99 and C-180/99 Kahlil [2001] ECR I-7413.

376

)  Case C-403/03 Schempp [2005] ECR I-6421; with an enormous impact 
on  social  security,  discovered  quite  early  by  S.  van  Raepenbusch, 
‘Persons  covered  by  Regulation  (EEC)  1408/71  and  European 
citizenship’,  in  Swedish  National  Social  Insurance  Board/European 
Commission,  25  years  of  Regulation  (EEC)  No    1408/71  on  social 
security for migrant workers, Stockholm, 1997, pp. 71, 81 et seq.

(

377

)  Case C-153/91 Petit [1992] ECR I-4973.

that  the  CJ  reached  the  conclusion,  in  the  recent 
judgment  on  the  regional  legislation  concerning 
Flemish  long-term  care  insurance (378),  that  Com-
munity law is not relevant to this piece of regional 
legislation,  if  and  as  far  as  the  status  of  persons 
is  involved,  persons  who  did  not  make  use  of  the 
fundamental freedoms of movement. Under these 
circumstances there is no mandate for EC coordina-
tion law, as long as interregional relations are mere 
matters of the internal law of one Member State.

C.  Do EC coordination rules matter for 

interregional social security?

It follows from the CJ judgment on the Flemish pub-
lic long-term care insurance that this does not mean 
that  EC  coordination  can  never  have  any  impact 
on interregional law, because the former is part of 
the supranational legislation and the latter part of 
the national and thus internal legislation on social 
security.  There  is  a  much  more  important  part  in 
the judgment, in which the CJ addressed the provi-
sion in regional law, according to which benefits in 
the case of long-term care are restricted to persons 
residing in the Flemish or Brussels part of Belgium, 
whereas persons in need of long-term care living in 
other parts of Belgium — due to a coverage based 
on previous residence on the Flemish soil — were 
excluded from the benefit.

The  CJ  found  that  this  exclusive  character  of  the 
Flemish  public  long-term  care  insurance  vis-à-vis 
residents  of  other  parts  of  Belgium  might  inhibit 
those  EU  citizens  to  actively  use  their  right  to  do 
paid work in all Member States on the basis of the 
freedom of movement — guaranteed by Article 39 
of the EC Treaty — as they are sanctioned by a loss 
of social security rights in case of residence outside 
the territory of the competent region. So, from the 
CJ judgment on the Flemish public long-term care 
insurance  one  cannot  conclude  that  legislative 
acts of regional public entities in the field of social 

(

378

)  Case  C-212/06  Gouvernement  de  la  Communauté  française  et 
Gouvernement  wallon  v  Gouvernement  flamand  [2008],  not  yet 
published;  cf.  also  Cour  Constitutionelle  de  la  Belgique  arrêt  no 
11/2009, numéro 3194/3195.

80

Eberhard Eichenhofer

security  are  spheres  that  are  definitely  untouch-
able  for  European  law (379).  Hence,  EC  law  matters 
also  to  interregional  social  security  law. The  com-
patibility of these provisions with EC coordination 
law  can  be  challenged,  as  long  as  a  cross-border 
case is at issue.

It would be, therefore, a profound misconception to 
argue that there exists a splendid isolation between 
EC coordination law — as part of supranational law 
—  and  interregional  social  security  —  as  part  of 
internal  or  national  law  —  and  that  there  are  two 
divisions  and  spheres  of  law,  coexisting  without 
getting in touch with one another! EC/EU law does 
not  represent  a  cohesive  and  coherent  legal  sys-
tem established as a hermetic and total legal order, 
built above the legal systems of the Member States. 
Rather, the purpose and intention of EC/EU law is to 
make the single market work on the basis, and by 
making  use,  of  the  legal  systems  of  each  Member 
State. Only in such a cross-border context does EC/
EU law become relevant; and in that case, suprana-
tional law has to ensure that it becomes paramount 
to the Member States’ legislation, irrespective of the 
level of government of the Member State by which 
it is enacted.

So,  EC/EU  law  questions  are  not  raised  in  order  to 
reconstruct  an  abstract  hierarchy  of  provisions  of 
supranational or national origin, but become rele-
vant on the basis of facts — the cross-border activi-
ties of individuals. Due to the very broad definition 
given  by  the  CJ  to  the  concept  of  cross-border 
connection  and  the  growing  importance  of  intra-
Community  activities  by  an  increasingly  mobile 
workforce  in  the  single  market,  the  likelihood  of 
interregional  social  security  coordination  being 
challenged from the perspective of EC coordination 
law is not to be underestimated.

When  examining  the  case-law  of  the  CJ  on  what 
constitutes  a  cross-border  case,  it  becomes  clear 

that it does not necessarily mean that the benefici-
ary him- or herself has to have a link to more than 
one  Member  State;  in  cases  of  family  benefits,  it 
suffices that a cross-border link exists through the 
child,  entitling  the  parent  to  a  family  benefit (380). 
The same principle applies to the taxation of par-
ents (381). In this context the CJ held that a cross-bor-
der element can also be based on the cross-border 
situation  of  the  family  member  of  the  taxpayer, 
residing  and  working  in  one  Member  State,  if  the 
latter  challenges  the  national  tax  law  that  inhib-
its the deduction of maintenance paid to a family 
member  from  the  taxable  income,  even  if  the  tax 
law  of  the  competent  state  does  not  provide  for 
such a deduction at all!

EC  coordination  social  security  law  not  only  has 
relevance for the regional substantive law, but also 
for  its  interregional  dimensions,  at  least  regard-
ing  international  law  consequences  —  as  borders 
of  regions  might  concur  with  borders  of  Member 
States. While the latter are bound by EC coordina-
tion law, the former are bound by it also if the inter-
regional movement turns out to be considered an 
international movement as well! 

Iv. 

IS InTerregIonal law 
aFFeCTed by euroPean 
SoCIal SeCurIT y 
CoordInaTIon law?

a. 

Interregional social security and EC 
social coordination provisions

In  the  judgment  of  1  April  2008,  on  the  Flemish 
public long-term care insurance, which is extremely 
important  for  any  further  debate,  the  CJ  explicitly 
distinguished cases of strict internal relevance from 
those  with  a  genuine  EC  dimension.  Whereas  the 
former  do  not  fall  under  the  provisions  of  EC  law, 
the  latter  are  directly  to  be  examined  as  to  their 

(

379

)  See the arguments of Advocate General Eleanor Sharpston, 28 June 

2007 (Case C-212/06), Nos 115–157.

380(

)  Case C-194/96 Kulzer [1998] ECR I-895.

381(

)  Case C-403/03 Schempp [2005] ECR I-6421.

81

50 years of Social Security Coordination 

Past – Present – Future

compatibility  with  the  EC  coordination  regulation 
on social security. The CJ held (382):

‘In this respect, it must be borne in mind that it is 
settled  case-law  that  the  Treaty  rules  governing 
freedom  of  movement  for  persons  and  the  meas-
ures adopted to implement them cannot be applied 
to activities which have no factor linking them with 
any of the situations governed by Community law 
and which are confined in all relevant respects with-
in a single Member State [...]. On the other hand, as 
the  Court  has  also  stated,  any  national  of  a  Mem-
ber State, irrespective of his place of residence and 
his nationality, who has exercised the right to free-
dom  of  movement  for  workers  and  who  has  been 
employed in another Member State, falls within the 
scope of those provisions’ (383).

‘In  those  circumstances,  two  kinds  of  situations 
must  be  distinguished  in  the  light  of  the  princi-
ples recalled [...]. First, application of the legislation 
at  issue  in  the  main  proceedings  leads  [...]  to  the 
exclusion  from  the  care  insurance  scheme  of  Bel-
gian nationals working in the territory of the Dutch-
speaking  region  or  in  that  of  the  bilingual  region 
of  Brussels-Capital  but  who  live  in  the  French-  or 
German-speaking region and have never exercised 
their  freedom  to  move  within  the  European  Com-
munity.  Community  law  clearly  cannot  be  applied 
to such purely internal situations’ (384).

‘Second,  the  legislation  at  issue  in  the  main  pro-
ceedings may also exclude from the care insurance 
scheme employed or self-employed workers falling 
within the ambit of Community law, that is to say, 
both  nationals  of  Member  States  other  than  the 
Kingdom  of  Belgium  working  in  the  Dutch-speak-
ing  region  or  in  the  bilingual  region  of  Brussels-
Capital but who live in another part of the national 
territory,  and  Belgian  nationals  in  the  same  situa-
tion who have made use of their right to freedom 

382(

)  Case  C-212/06  Gouvernement  de  la  Communauté  française  et 
Gouvernement  wallon  v  Gouvernement  flamand  [2008],  not  yet 
published.

of  movement.  So  far  as  that  second  category  of 
worker  is  concerned,  it  falls  therefore  to  be  con-
sidered whether the provisions of Community law, 
interpretation  of  which  is  sought  by  the  national 
court,  preclude  legislation  such  as  that  at  issue  in 
the  main  proceedings,  inasmuch  as  it  applies  to 
nationals  of  Member  States  other  than  the  King-
dom  of  Belgium  or  to  Belgian  nationals  who  have 
exercised  their  right  of  free  movement  within  the 
European Community’ (385).

‘In  the  light  of  those  principles,  measures  which 
have the effect of causing workers to lose, as a con-
sequence of the exercise of their right to freedom of 
movement, social security advantages guaranteed 
them by the legislation of a Member State have in 
particular  been  classed  as  obstacles.  [...]  Legisla-
tion such as that at issue in the main proceedings 
is such as to produce those restrictive effects, inas-
much  as  it  makes  affiliation  to  the  care  insurance 
scheme  dependent  on  the  condition  of  residence 
in either a limited part of national territory, viz. the 
Dutch-speaking region and the bilingual region of 
Brussels-Capital, or in another Member State.

Migrant  workers,  pursuing  or  contemplating  the 
pursuit of employment or self-employment in one 
of  those  two  regions  might  be  dissuaded  from 
making  use  of  their  freedom  of  movement  and 
from  leaving  their  Member  State  of  origin  to  stay 
in  Belgium,  by  reason  of  the  fact  that  moving  to 
certain parts of Belgium would cause them to lose 
the opportunity of eligibility for the benefits which 
they might otherwise have claimed. In other words, 
the  fact  that  employed  or  self-employed  workers 
find  themselves  in  a  situation  in  which  they  suf-
fer  either  the  loss  of  eligibility  care  insurance  or  a 
limitation of the place to which they transfer their 
residence is, at the very least, capable of impeding 
the exercise of the rights conferred by Articles 39 EC 
and 43 EC’ (386).

383(

)  No 33 s.

384(

)  No 37 ss.

82

(

(

385

)  No 41 s.

386

)  No 46 ss.

Eberhard Eichenhofer

‘In addition [...] the restrictive effects of the legisla-
tion  in  question  in  the  main  proceedings  are  not 
to  be  considered  too  indirect  and  uncertain  for  it 
to be impossible to regard that legislation as con-
stituting an obstacle contrary to Articles 39 EC and 
43 EC. In particular [...], possible entitlement to the 
insurance care benefits at issue depends, not on a 
future and hypothetical event for the employed or 
self-employed worker concerned, but on a circum-
stance linked [...] to the exercise of the right to free-
dom of movement, namely, the choice of transfer 
of residence’ (387).

From  this  it  clearly  follows  that  all  beneficiaries, 
covered  by  the  regional  Flemish  public  long-term 
care insurance as employees within the competent 
region (Flemish Community and Brussels), are jeop-
ardised in their social security rights if they take up 
residence in another Member State, for example in 
the Netherlands or Germany — despite long-term 
care insurances also being established there!

The  restriction  of  the  Flemish  long-term  care 
insurance to residents of the region cannot be jus-
tified with the asserted uniqueness of the Flemish 
approach  to  ensure  long-term  care  to  depend-
ent  persons  and  the  territorial  restriction  in  the 
organising and administrative power of the Flem-
ish legislation and government. Under EC law it is 
not  only  possible,  but  necessary,  that  a  credit  for 
long-term  care  earned  in  a  Belgian,  e.g.  Flemish, 
insurance give access to care benefits supplied by 
German  or  Dutch  services,  whereas  the  costs  are 
to  be  borne  by  the  Flemish  insurance.  The  same 
rule  applies  in  European  law  on  healthcare  for 
pensioners (388).  So,  in  a  coordination  law,  which 
comprises  long-term  care  as  an  integral  element 
of  healthcare (389),  it  is  clear  that  the  CJ  could  not 
allow any restrictions based on residence for per-
sons covered by the Flemish public long-term care 

insurance, if they are residents of a neighbouring 
or more remote Member State.

b. 

Is EC coordination law relevant for 
internal social security cases?

EC coordination law matters for regional social secu-
rity cases, if they also have an intra-Community com-
ponent, i.e. a link to another Member State. But also 
in cases when a cross-border component is lacking, 
EC law can have an impact on the legal position of 
the  individuals  involved.  Again  a  reference  is  to  be 
made  to  the  CJ’s  considerations  in  the  case  on  the 
Flemish long-term care scheme. There, the CJ ruled:

‘It  may  nevertheless  be  remarked  that  interpreta-
tion of provisions of Community law might possibly 
be of use to the national court, having regard too 
to situations classed as purely internal, in particular 
if the law of the Member State concerned were to 
require every national of that state to be allowed to 
enjoy the same rights as those which a national of 
another Member State would derive from Commu-
nity law in a situation considered to be comparable 
by that court’ (390).

Even  though  EC  law  does  apply  to  merely  internal 
cases (391)  directly,  this  does  not  prevent  national 
courts  from  examining  whether,  pursuant  to  provi-
sions  of  supranational  law,  a  worker  (employed  or 
self-employed) of the competent state lacking a link 
to  the  legal  system  of  another  Member  State  may 
be  discriminated  against  one  having  such  a  link. 
No  court  of  any  given  Member  State  is  precluded 
from  examining  whether  such  a  differential  treat-
ment  is  permitted  under  its  internal  constitutional 
law (392). Hence, the question as to which extent differ-
ences in treatment between internal and cross-bor-
der cases are authorised must be raised and solved 
in the framework of national constitutional law.

(

(

(

387

)  No 51.

388

)  Article 27 et seq. of Regulation (EEC) No 1408/71 = Article 23 et seq. of 

Regulation (EC) No 883/2004.

389

)  Case C-160/96 Molenaar [1998] ECR I-843, Case C-215/99 Jauch [2001] 
ECR I-1901 and Case C-286/03 Hosse [2006] ECR I-1771; F. Pennings, 
No 2, 149 et seq.

390(

)  Case  C-212/06  Gouvernement  de  la  Communauté  française  et 
Gouvernement  wallon  v  Gouvernement  flamand  [2008],  not  yet 
published, No 40; A. Wallrabenstein note in ZESAR 2009, 139 et seq.

391(

)  Case C-332/90 Steen I [1992] ECR I-341.

392(

)  Case C-132/93 Steen II [1994] ECR 2715.

83

50 years of Social Security Coordination 

Past – Present – Future

law 

By  raising  this  question  a  general  and  quite  fun-
damental  problem  of  EC/EU 
is  broached, 
i.e.  reverse  discrimination  or  discrimination  à 
rebours (393). In Germany it is referred to as Inländer-
Diskriminierung — the issue of whether country fel-
lowmen of a Member State (Inländer) can be treated 
less favourably than migrants under European law. 
This is, of course, a rather rhetorical question, as it 
unveils  quite  easily  the  assertive  tone  underlying 
the question.

Therefore, this description of the question at stake 
is not correct. It should be reformulated as follows: 
is it possible, under the constitutions of the Mem-
ber States, for EC law to establish more favourable 
conditions  for  an  individual  than  those  which  can 
be found in a comparable solution in internal law? 
If such a difference was qualified as discrimination, 
it would not be understood as discrimination based 
on EC law, but — vice versa — on the internal law. 
There  is  a  more  subtle  correspondence  between 
internal  and  EC  law.  If  such  a  non-discrimination 
principle  can  be  identified  in  the  internal  law  of 
the  Member  States,  one  might  say  that  it  can  be 
conceived as a corollary of the non-discrimination 
clause to be found in and based on EC law!

C.  Can a non-discrimination principle 
concerning the EC and internal law 
treatment of comparable cases be 
identified in the internal law of the 
Member States?

So,  finally  the  question  emerges  whether  internal 
law tolerates a less favourable legal status for indi-
viduals compared with the one they could, should 
and would get under EC law. This question cannot 
be solved by interpreting EC law, as it does not apply 
to merely internal cases. Nevertheless, the question 
deals  with  the  implicit  consequences  of  EC  law.  If 
the said principle could be identified in the internal 
law of the Member States, EC law standards would 

393(

)  A.  Epiney,  Umgekehrte  Diskriminierungen,  Köln/Berlin/Bonn/
München,  1995;  Anne  Walter,  Reverse  discrimination  and  family 
reunification, 2008.

also pertain to the internal law itself; the relevance 
of  EC  legislation  would,  in  other  words,  transcend 
its proper and genuine sphere.

The answer to this question is not to be deduced 
from  the  constitutions  of  the  Member  States,  as 
explicit provisions are hard to find. One has to try 
to find a solution on the basis of an acknowledged 
constitutional  principle,  which  is  normally  quite 
abstractly  put  and  figured  out.  One  of  the  key 
constitutional  provisions  involved  is  the  rule  on 
equality. Equality between internal and European 
cases — is this in today’s Member States a gener-
ally  accepted  rule?  Equality  is  —  as  Article  20  of 
the EU Charter of Fundamental Rights of the Euro-
pean  Union  demonstrates  —  a  widely  accepted, 
well-respected principle of European constitution-
al law. When it comes to the principle of equality, 
the  German  Constitutional  Court (394)  found  that 
the requirements in the German professional leg-
islation on the establishment of an enterprise for 
craftsmen had become unconstitutional from the 
perspective  of  equal  treatment,  since  in  the  sin-
gle  market  the  (high)  German  standards  are  only 
followed  by  Luxembourg  and  Austria,  whereas  in 
other Member States the requirements regarding 
the  education  of  a  self-employed  craftsman  are 
significantly  lower.  So,  it  would  amount  to  une-
qual und unfair treatment of craftsmen if German 
law  were  more  demanding  than  the  law  of  other 
Member States (395).

Referring to the principle of equality — enshrined 
in  Article  3,  para.  1,  of  the  German  Basic  Law  — 
the  Administrative  Court  of  Oldenburg  ruled  on 
26  September  2008 (396)  on  the  relevance  of  this 
constitutional  provision  regarding  the  treatment 
of  similar  cases  governed  by  both  European  and 
internal  law.  The  court  held  that  the  by-laws  of 

(

(

394

)  BVerfG — 5.12.2005 — 1 BvR 1730/02 = Gewerbearchiv 2006, 71–73.

395

)  Sachs-Osterloh, Grundgesetz, 2007 (fourth edition), Article 3, Rn 71: 
all sorts of reversed discrimination can be generally challenged by the 
equal treatment clause of Article 3, para. 1, of the Basic Law; compare 
also A. Epiney, No 55, 426 et seq.

(

396

)  Aktenzeichen 7 A 5226/06 = MedR 2009, 43, also reprinted in ZESAR 

2009, with a note by E. Eichenhofer.

84

Eberhard Eichenhofer

a  public  pension  fund  on  old-age  and  invalidity 
insurance  for  dentists  of  the  German  Land  Lower 
Saxony  (Niedersachsen),  enacted  on  the  basis  of 
a Land’s law by the chamber of dentists of Lower 
Saxony,  are  unconstitutional  as  they  violate  the 
principle  of  equality.  They  treat  dentists  moving 
to  Lower  Saxony  from  the  Member  States  of  the 
EU more favourably than those coming from other 
Länder in Germany. Indeed, unlike dentists estab-
lishing  themselves  in  Lower  Saxony  after  a  previ-
ous period of self-employment in another German 
Land,  European  migrants,  who  were  covered  by 
a  social  security  system  in  their  previous  Mem-
ber  State  of  establishment,  are  allowed  to  keep 
this  system  on  a  voluntary  basis (397)  and  are  thus 
exempted  from  mandatory  membership  in  the 
pension fund of Lower Saxony.

For the court, no justification could be found which 
could  ever  explain  and  justify  why  dentists  mov-
ing to Lower Saxony should be in a better position 
with regard to the organisation of their protection 
against  the  risks  of  old  age  and  invalidity  when 
they  come  from  outside  Germany  (from  another 
EU Member State) instead of within! And thus the 
court  argued: ‘Whereas  Community  law  demands 
to deal with a cross-border case in a specific man-
ner, it is a mere question of (national) constitutional 
law whether an internal case is to be treated alike 
as  the  international  one  or  not’ (398).  And  the  court 
asserted  that  the  EC/EU  law  standard  cannot  be 
more generous than the one offered by internation-
al law — otherwise the principle of equal treatment 
would be hurt.

If  the  conclusion  on  the  basis  of  the  nationally 
accepted  principle  of  equality  is  correct,  each 
differential treatment is to be justified under the 
constitutional  law  of  the  Member  States.  If  the 
internal law is less favourable to an individual than 

the EC/EU law, this will cause unjustifiable differ-
ences between nationals and foreigners (399). If the 
constitutional law interprets such a distinction as 
being  unlawful  and  void,  then  EC/EU  legislation 
also  sets  standards  for  the  comparable  internal 
law!  On  the  basis  of  this  reasoning,  the  Austrian 
Constitutional  Court (400)  interprets  Article  14  of 
the  Charter  of  Fundamental  Rights  of  the  Euro-
pean Union — which prohibits any discrimination 
when  attributing  human  rights  to  individuals,  as 
a violation of European and international human 
rights’ guarantees — as meaning that nationals of 
the  competent  state  are  to  be  treated  at  least  in 
the  same  manner  as  nationals  of  other  Member 
States.

This doctrine goes far beyond CJ case-law, accord-
ing to which a differential treatment of cross-border 
EC/EU  law  cases  and  internal  cases  is  compatible 
with  EC/EU  law (401).  Under  this  assumption,  EC/EU 
law spills over into national law and so goes beyond 
the  sphere  which  is  formally  and  officially  directly 
governed by supranational law!. If the constitution-
al principle to safeguard equality is to be interpret-
ed along the lines of the Oldenburg Administrative 
Court’s  judgment,  then  the  guidelines  established 
by the European legislature (or the CJ) not only set 
standards  for  international  law;  these  standards 
are also to be observed and respected for deciding 
comparable internal cases.

One  might  summarise  from  this  finding  that  on 
the  basis  of  the  principle  of  equality  a  better-law 
approach has to be followed: the internal law is to 
be respected only if it is in line with European law; 
if it is less favourable, it is void; however, in case the 
internal law is more advantageous to the individual 
than the European international law, then the inter-
nal law prevails — as the one that is more benevo-
lent to the individual.

(

(

397

)  Regarding Regulation (EEC) No 1408/71, the mandatory protection in 
a regional social security system is also applicable in European cross-
border cases.

399(

)  A. Epiney, No 56, 432 et seq.

400(

)  VerfG EuGRZ 1997, 362.

398

)  Translation from the German into English by E. Eichenhofer.

401(

)  Case 370/88 Procurator Fiscal v Marshall [1990] ECR I-4071.

85

50 years of Social Security Coordination 

Past – Present – Future

One  might  discern  in  such  a  development  the 
reaction  of  national  law  to  the  non-discrimina-
tion  clause  of  European  law  (Article  12  of  the  EC  
Treaty) (402). If a detrimental treatment of cross-bor-
der cases in relation to internal ones violates Com-
munity law and, therefore, the more favourable law 
is to be applied (403), one might argue that the same 
principle applies conversely — if the internal case 
is less favourably treated by internal law than the 
cross-border one. From both sides of the spectrum 
stems a harmonising effect on the legal solutions.

This  principle  is  not  beyond  any  legal  doubt (404). 
One might ask what is left for national sovereign-
ty  (which  is  safeguarded  by  the  principle  of  sub-
sidiarity,  guaranteeing  the  rights  of  the  Member 
States in spheres of legislation that are left to their 
responsibility  and  discretion)?  In  the  pending  CJ 
cases on the tax power of the autonomous regions 
in  Spain (405),  the  question  remains  as  to  how  far 
the regional autonomy to tax the regional econo-
my extends and to which extent the autonomous 
communities are obliged to observe targets, rep-
resenting the general interest of the central state. 
Also in the light of Article 136 of the EC Treaty, the 
Member States are entitled to follow their own tra-
ditions in social policy.

If  regional  social  protection  stands  for  the  over-
all  trend  to  replace  the  welfare  state  by  welfare 
regions (406),  then  it  seems  obvious  that  regions 
should be autonomous also in the way they estab-
lish  their  systems  of  social  protection  in  each  rel-
evant  factor.  So,  there  is  a  general  justification  for 
accepting  differences  regarding  persons  covered, 
and risks and benefit levels between welfare regions 
—  since  facilitating  such  differences  in  forms  and 

levels  of  protection  is  what  the  regionalisation 
of  social  protection  is  all  about.  Such  differences, 
hence,  are  to  be  respected  and  accepted  under 
both  national  and  EC/EU  law.  But  regional  auton-
omy  is  not  sufficient  justification  for  the  exclusion 
of persons who had been covered by a social pro-
tection  programme  for  a  certain  risk  on  the  basis 
of residence in a region and are no longer covered 
due to having moved to another region of the same 
Member State before the risk was verified. Such an 
exclusion  is  dubious  under  the  legislation  of  the 
Member State, which allows the regions to establish 
genuine  systems  of  social  protection  under  their 
autonomous  legislation.  Since  the  coordination  of 
social security within Europe is the task of the ‘supe-
rior’  EC,  the  interregional  coordination  of  regional 
social protection falls upon the Member State. The 
latter has to ensure that, between regions, the prin-
ciples  of  mutual  respect  and  equal  treatment  are 
safeguarded,  and  from  the  latter  stems  also  the 
principle  of  non-discrimination  with  respect  to 
interregional  migrants  as  core  elements  of  inter-
regional law. So the argument that the regions are 
free to create their own systems of social protection 
is not very sound, if the Member State itself would 
not stand for a lower standard of internal law than 
the  European  one.  This  lack  becomes  obvious  if 
an  acquired  social  security  right  is  internationally 
effective  due  to  European  law,  but  gets  lost  com-
pletely under internal law, because regional social 
security rights are not effective in the national con-
text. A nation state, in which a regional social secu-
rity right is effective only within the region but not 
beyond it, seems to be in the status of secession! It 
lags behind the already achieved status of Europe-
an integration; this is no longer tolerable — under 
both internal and European law! 

(

(

402

)  E.  Eichenhofer,  No  30,  Tz  112  ff;  U.  Becker,  ‘Die  Bedeutung  der 
gemeinschaftsrechtlichen 
die 
Gleichbehandlung on Sachverhalten im koordinierenden Sozialrecht’, 
VSSR 2000, 221.

Diskriminierungsverbote 

für 

403

)  B. Schulte, ‘Supranationales Sozialrecht’, in U. Becker, B. von Maydell 
and  F.  Ruland  (eds),  Sozialrechtshandbuch,  Baden-Baden,  2008 
(fourth edition), Rn. 33–38.

(

404

)  A. Epiney, No 55, 432 et seq., 470 et seq.

405(

)  Cf. Advocat General Juliane Kokott of 8 May 2008 (C-428/06 KGT Risja).

(

406

)  M. Ferrera, The boundaries of welfare. European integration and the 
new spatial politics of social protection, Oxford, 2005, p. 167 et seq.

86

Eberhard Eichenhofer

v.  euroPean SoCIal SeCurITy 
CoordInaTIon law and 
regIonal SoCIal PolICy

a.  A twofold ‘divergent’ solidarity?

In  the  debate  on  the  interrelation  of  EC  coordina-
tion  law  and  regional  social  security  systems,  the 
argument  is  brought  forward  that  both  ‘regional 
and international solidarity are profoundly different 
from another in both concept and character’ (407). So, 
should  regional  solidarity  be  conceived  as  being 
categorically distinguished and separate from inter-
national solidarity?

This  observation  is  not  wrong,  yet  it  is  extremely 
vague  and  can  be  quite  easily  misunderstood.  It 
is vague because it does not point out how differ-
ences  in  ‘solidarity’  between  these  two  concepts 
are to be noticed. And it can be quite easily misun-
derstood because regional and international social 
security  deal  with  solidarity  in  different  manners. 
So,  the  observation  on  the  twofold  and  divergent 
types of solidarity, enshrined in both regional and 
international  social  security  law,  does  not  provide 
any clear answer. Instead, it raises two much more 
interesting  questions.  Firstly,  how  should  the  dif-
ferences between regional and international social 
security law be characterised (B)? Secondly, how do 
both contribute to foster solidarity (C)? 

b.  Substantive law and coordination law

As  to  the  first  question,  it  is  important  to  outline 
and  underline  the  profound  structural  differences 
between regional social security and international 
social  security  law.  Regional  social  security  law  is 
part  of  the  national  law  of  a  Member  State.  As  it 
replaces  the  national  social  security  legislation  of 
this Member State, it has the same legal character 
as  social  security  law  based  on  a  collective  agree-
ment  of  employers’  and  trade  unions,  which  also 

substitutes  for  a  missing  national  social  security 
branch,  for  example,  unemployment  insurance  in 
France (408)  or  Denmark (409).  So,  the  first  peculiarity 
of  regional  social  security  law  is  the  role  to  create 
substantive rules on social security, for example to 
define the persons covered, the contribution basis 
and the administration to levy them and their rate 
and, finally, the structure of benefits.

Seen  from  the  EC  coordination  law  perspective,  a 
regional  social  security  branch  has  the  same  legal 
status  as  other  —  primarily  based  on  collective 
bargaining—  or  private  branches  of  social  secu-
rity (410). Conceived as integral parts and elements of 
the  social  security  system  of  a  Member  State,  the 
regional  laws  on  social  security  are  treated  under 
the  coordination  law  as  dependent  parts  of  the 
Member  State’s  legislation  on  social  security,  to 
which the coordination regulation is to be applied 
without the smallest restriction. Without any excep-
tions, all provisions of EC coordination are also rel-
evant for the regional branches of social security, as 
if they were the national legislation. This is evident 
because otherwise a Member State would be able 
to get rid of the pledges and commitments imposed 
on it by the EC coordination legislation, by fostering 
internal reforms and shifting national responsibili-
ties onto regional public entities. Coordination law, 
hence, treats all forms of substantive law in a Mem-
ber State alike, irrespective of the differences in the 
formation and administration of the law.

C.  Solidarity in substantive and 

coordination law

Each substantive branch and system of social secu-
rity,  irrespective  of  a  given  one,  which  is  run  by  a 
national,  regional  or  occupational  (e.g.  set  up  and 
controlled  by  social  partners)  organisation,  strives 

408(

)  F. Kessler, Droit de la Protection Sociale, Paris, 2005 (second edition), 

p. 376 et seq.

409(

)  D.  Pieters, The  social  security  systems  of  the  Member  States  of  the 

European Union, Antwerp, 2002, 47, 51.

(

407

)  Cf.  the  recommendation  of  P.  Van  Parijs,  No  29,  1998,  p.  5:  ‘De 
solidariteit  tussen  personen  binnen  een  Volksgemeenschap  moet 
strikt  onderscheiden  en  gescheiden  worden  van  de  solidariteit 
binnen een internationale (of confederale) gemeenschap’.

410(

)  They have a growing importance: S. Vansteenkiste, S. Devetzi and F. 
Goyens (eds), Private partners in social insurance, Leuven, 2001, with 
reports on Belgium, the Czech Republic, Greece, Germany, Hungary, 
Norway, Sweden and the Netherlands.

87

50 years of Social Security Coordination 

Past – Present – Future

to  establish  and  deepen  social  solidarity  among 
the  persons  involved.  Each  effort  to  create  social 
security fosters solidarity. But this concept lacks an 
emotive or cultural component; it does not repre-
sent  a  vague  feeling,  but  a  very  solid  relationship, 
based — above all — on the payment of money to 
an institution, which has to do benevolent things, 
above  all  by  distributing  money  to  the ‘others’!  In 
the context of the fundamental rights of EU citizens, 
solidarity has assumed an official and far-reaching 
status  as  the  constructive  basis  of  social  human 
rights acknowledged EU-wide (411).

As all social security is based upon a give-and-take 
mechanism (as benefits are only payable if ‘others’ 
have  contributed  to  the  institution  in  advance) 
the term ‘solidarity’ in the context of social secu-
rity  stands  primarily  for  a  financial  mechanism 
to share and manage social risks, to be borne by 
the working population or the residents within a 
given territory.

So, within a nation state, a nation-wide social securi-
ty system flattens out regional economic and social 
differences  —  which  exist  in  each  nation  state  — 
and shares the burden of social risks. ‘National soli-
darity’ also has quite a strong regional component, 
in the sense that the different economic and social 
developments in different parts of the country are 
conceived  as  components  of  the  social  risk,  to  be 
secured  and  managed  jointly  by  social  security 
systems established at national level. German uni-
fication  showed  that,  in  the  framework  of  social 
security, immense transfers from west to east took 
place  to  establish  similar  living  conditions  within 
the unified country as regards social protection.

‘Regional  solidarity’  —  quite  often  described  as  a 
‘deeper’ form of solidarity than the ‘national one’ — 
represents  a  lower  degree  of  solidarity  compared 
with  the  latter,  because  it  is  inspired  by  making 
economically  strong  regions  stronger  by  getting 
rid of the burden of sharing the risks of those living 

in  economically  and  socially  weaker  regions.  The 
concept  of  regional  solidarity  therefore  departs 
from  the  idea  of ‘national  solidarity’.  The  possible 
increase in regional solidarity is outweighed by the 
lack of national solidarity.

The ‘solidarity’ enshrined in the social security sys-
tem  lacks  any  romantic  flavour.  As  the  financial 
means to make an enormous machinery of attribu-
tion  of  rights  and  distribution  of  income  operate, 
the  majority  of  protected  and  covered  persons 
are aware of this already from the very beginning, 
through  the  collection  of  contributions.  So  it  is  as 
popular  as  the  tax  office! Therefore,  the  system  at 
large, due to its enormous complexity and techni-
cality,  is  much  more  disliked  than  appreciated  by 
the ordinary citizen. Because of the financial basics 
of its workings — based on pre-payments towards 
an insecure future, which is hard to predict for indi-
viduals,  and  the  highly  technical  character  of  its 
provisions  —  social  security  is  not  associated  by 
those covered with any idea of ‘cosiness’ or philan-
thropy. Therefore,  even  though  it  organises  social 
protection  very  well  and  very  differentially,  and 
because of this creates bonds of solidarity, it is often 
far from being perceived as a key element of social 
solidarity.  One  doubts  whether  one  can  rely  on 
the assumption that coverage in social security — 
despite being obviously essential for the well-being 
of the beneficiaries — will ever be widely conceived 
as being a benevolent institution!

EC social security coordination law, however, is not 
centrally made to foster solidarity (412). Of course, as 
a  corollary  of  substantive  social  security,  it  has  to 
fulfil some additional tasks that could not be done 
without  coordination  —  the  lack  of  which  would 
even  be  very  detrimental  to  social  protection  at 
large. From this lack would also stem a shortcoming 
regarding solidarity. But for the specific analysis of 
EC coordination law, the concept of solidarity does 
not  have  any  enlightening  role  to  play,  because 
international  social  security  also  law  has  to  deal 

(

411

)  Title  IV,  Articles  27–36  of  the  Charter  of  Fundamental  Rights  of  the 

(

412

)  R.  Schuler,  No  31,  S.  118  et  seq.,  198  et  seq.  and  274  et  seq.  on  the 

European Union.

impact of international social security to foster social justice.

88

Eberhard Eichenhofer

with the quite elementary technical dimensions (413) 
of national social security systems.

•	

•	

•	

Firstly, there is the mere fact that many national 
social  security  systems  exist.  As  long  as  this  is 
done by each national state alone, each system 
exists  in  splendid  isolation  from  all  other  sys-
tems. So, the most elementary and most crucial 
role that international law has to play is to over-
come this tacit and parallel existence of numer-
ous different national social security systems.
Secondly,  this  parallel  existence  might  bring 
about double protection and loopholes in pro-
tection,  which  are  detrimental  to  the  social 
security rights of individuals; coordination law 
has to find ways to avoid both deficits.
Thirdly,  as  long  as  the  social  security  systems 
of  Member  States  do  not  take  account  of  any 
other  social  security  system,  social  protection 
is  restricted  to  the  competent  nation  state; 
migrants would not be accepted, because each 
social security right earned in one system would 
only be counted as a right within this system, and 
would lack any importance in another system.

So, coordination does not strive specifically to fos-
ter solidarity in a certain direction or with a certain 
intention. But it is the main target of coordination 
to  interrelate  the  various  national  social  security 
systems with one another. In this respect it contrib-
utes to social solidarity; but it is not the main pur-
pose of EC law to create social solidarity.

In  the  context  of  Europe,  EC  coordination  has  to 
bring  about  the  ‘European  social  area’  (Jacques 
Delors), which is not to be conceived as a homog-
enous space with a completely harmonised unique 
social  security  law,  governed  and  run  by  the  EC, 
but  rather  as  a  space  in  which  the  social  security 

(

413

)  Chardon,  No  5,  p.  47: ‘The  Member  States  play  a  fundamental  role 
running the concrete coordination: respect for civil rights in everyday 
life  is  based  on  the  productive  cooperation  between  the  social 
security  institutions  of  the  different  Member  States.  Besides  the 
roles  which  determine  the  rights  of  individuals,  coordination  also 
consists of a set of functions and procedures which allow productive 
cooperation between the institutions of Member States’; F. Pennings, 
No 2, p. 8 et seq.

legislation  of  all  Member  States  is  interrelated  in 
such  a  manner  that  neither  loopholes  nor  double 
protection occur and social security rights become 
internationally  —  i.e.  Europe-wide  —  effective, 
regardless  of  the  Member  State’s  legislation  on 
which  they  are  based.  Coordination  is  made  to 
overcome  a  deficit  of  solidarity,  insofar  as  social 
inclusion  and  social exclusion  are  to  be  conceived 
as two sides of the same coin. So, the main purpose 
of coordination is to overcome the exclusive effects 
embedded in all welfare states, which are organised 
in  isolation  from  one  another,  and  to  interrelate 
each welfare state with the homologous system of 
all other Member States. This ideal indeed deepens 
solidarity in Europe, not by enriching or ‘deepening’ 
it but by widening social security.

d.  EC coordination and regional social 

security

From  these  findings  it  follows  that  the  regional 
systems  of  social  security  of  the  Member  States 
are  bound  by  the  EC  coordination  regulation  and, 
therefore,  the  regional  branches  of  social  security 
systems  of  the  Member  States  have  to  respect  all 
provisions  of  that  regulation.  This  is  due  to  the 
fact  that  regional  social  security  systems  replace 
the otherwise existing national ones; as mere sub-
stitutes  of  national  social  security  branches  they 
do  not  have  another  status  in  coordination  law 
as  those  social  security  systems  which  are  made 
by  collective  agreements  and  which  are  acknowl-
edged as social security branches under EC coordi-
nation  by  virtue  of  their  function  to  substitute  an 
otherwise  existing  national  social  security  branch. 
As  no  Member  State  is  allowed  to  evade  its  com-
mitments under the EC coordination regulation by 
the transfer of legislative power from the Member 
State  to  a  region,  endowed  with  legislative  power 
itself,  the  regional  legislation  has  imperatively  to 
concur with EC legislation, which is paramount and 
binding on the Member State to which the regional 
entity  belongs  as  a  dependent  part,  with  all-in-all 
limited  legislative  power.  So,  also  under  regional 
law the fundamental freedoms of EC law are to be 

89

50 years of Social Security Coordination 

Past – Present – Future

safeguarded  by  adapting  the  regional  law  to  the 
established European standards.

Also for internal cases which, for this reason, are not 
governed by EC law, EC coordination law has an indi-
rect effect on the basis of the constitutional law of 
the Member State. This can be explained by the fact 
that not only the EC but also each Member State is 
committed to the ideals of the single market and an 
open society in which the freedom of movement of 
persons, goods, services and capital is guaranteed 
to  everyone,  without  any  unlawful  restriction.  It  is 
clear that EC/EU law also sets standards for mobil-
ity  within  one  Member  State:  what  Europe  allows 
cannot be forbidden within a Member State! So the 
European  standard  applies  internally  by  virtue  of 
the internal constitutional law (414).

vI.  ConCluSIonS

EC coordination law on social security is an impor-
tant part of European legislation, because it makes 
Europe into a unique ‘social space’. This is not the out-
come of European harmonisation, but of European 
coordination of social security. The example exam-
ined shows precisely the growing role the EC/EU l 
egislation  to  organise  transnational  patterns  of 

economic  life  and  so  also  of  social  protection. 
European  law  become  a  laboratory  for  transna-
tional  ways  of  organising  social  protection (415), 
as  it  sets  standards  to  safeguard  mobility  and  to 
combine this guarantee with the social purpose of 
safeguarding acquired rights in social security. The 
topic dealt with illustrates quite impressively that 
the social standards of European law are also rel-
evant beyond their genuine sphere of application 
in the context of international law under the aus-
pices  of  the  guarantee  of  equal  treatment.  Thus, 
the legislative power of the Member States in the 
field of social security is respected and protected 
and the same is true for the regions. But national 
legislation  is  no  longer  the  dominant  instrument 
of  social  legislation;  each  act  of  national  legis-
lation  can  be  replaced  by  a  legislative  act  of  the 
region, and both are bound by European laws. This 
fact is not to be deplored. One cannot help think-
ing  of  the  extremely  lucid  and  convincing  obser-
vation made by the Nobel Award winner Thomas 
Mann in a speech to workers held in the Viennese 
district  of  Ottakring  in  1932.  When  looking  back 
through  history,  he  said: ‘Let’s  be  aware  that  the 
nation is not the first, and, therefore, not the ulti-
mate. It is a step to larger gatherings and units; it 
lies  on  the  way  from  the  tribe  and  the  landscape 
to Europe’ (416).

(

414

)  Cf. also Advocate General Eleanor Sharpston in her reflections, No 118 

et seq., 28 June 2007 (Case C-212/06).

90

(

(

415

)  E. Eichenhofer, Geschichte des Sozialstaats in Europa, München, 2007, 

p. 155 et seq.

416

)  T. Mann, ‘Rede vor Arbeitern in Wien’ (1932), in ders., Von Deutscher 
Republik,  Frankfurt/Main,  1984,  344,  360:  ‘zu  erkennen,  dass  die 
Nation weder etwas Erstes noch darum etwas Letztes ist. Sie ist eine 
Stufe zu größeren Zusammenfassungen, sie liegt auf dem Wege vom 
Stamm und Landschaft zu Europa!’.

ThE  imPLEmENTATiON  OF COORdiNATiON  
REguLATiONS  iN  ACTivE  LABOuR  mARkET  
POLiC y PROviSiONS  AT NATiONAL  LEvEL

Maximilian Fuchs

Maximilian Fuchs
University of Ingolstadt (Germany) 

Maximilian Fuchs, born 1950, studied law at the University of Regensburg, com-
pleting his Ph. D. in 1979. From 1977 to 1979 he was assistant at the Faculty of 
Law of the University of Regensburg. In 1980 he became a senior fellow at the 
Max-Planck-Institute for Foreign and International Social Law in Munich. From 
1983 to 1999 he was professor of law at the University of Bamberg. In 1990 he 
completed his habilitation at the University of Munich. He was professor at the 
University of Erlangen-Nürnberg and since 1993 he has served as professor of 
Civil Law, German and European Labour and Social Law at the department of 
business of the Catholic University of Eichstätt-Ingolstadt. In the academic years 
from 1999 to 2003 he was visiting professor at the universities of Tor Vergata 
Rome,  Bolzano,  Trento,  the  Pazmany  University  of  Budapest  and  the  Univer-
sity  of  Catania,  where  he  taught  European  Labour  Law.  He  is  coeditor  of  the 
Zeitschrift für Europäisches Sozial- und Arbeitsrecht (ZESAR) and partner of the 
Center of Excellence “The Design of Efficient Labour Market Institutions in Eu-
rope” at the University of Trier (*).

I. 

The rISk oF 
unemPloymenT aS The 
SubjeCT oF regulaTIon 
under euroPean law

Obtaining  an  income  by  means  of  (paid,  autono-
mous) work has an existential character in modern 
societies.  Not  having  work  constitutes  an  existen-
tial  threat. This  was  the  reason,  in  addition  to  the 
traditional risks constituted by similar threats such 
as illness, accident, disability or age, for also consid-
ering the unavailability of work as a social risk and 
for providing protective mechanisms against this in 
the  area  of  social  security.  Some  national  systems 
have  been  created  as  a  direct  response  to  severe 
economic crises (417).

In  view  of  lasting  mass  unemployment  in  Europe, 
the  European  legislator  also  wished  to  address 
overcoming the risk of unemployment. It has done 
so at various levels (418). Since the start of European 
unification and the entry into force of the Treaty of 
Rome, the European legislator has been concerned 
to  set  up  a  type  of  European  employment  market 
in  addition  to  the  existing  national  employment 
markets.  A  crucial  legislative  reason  for  this  was 
the establishment of the freedom of movement for 
workers (419).  Hence  Article  39  safeguards  the  right 
to  move  from  one  Member  State  to  another,  to 
seek and take up employment. In Regulation (EEC) 
No 1612/68 on freedom of movement, the employ-
ment  service  has  therefore  become  European-
ised (420). That the operation of such a transnational 

*( ) 

This contribution was translated from the original German version.

(

417

)  The current sweeping global economic crisis is exceptional evidence 
of  the  problem.  And  in  these  times  opponents  of  unemployment 
insurance  may  reflect  on  how  good  it  is  that  we  have  protective 
systems  in  place  because  they  represent  a  substantial  factor  of 
domestic demand.

418(
) 

In the area of European labour law, Directive 98/59/EC in relation to 
mass redundancies or Directive 2001/23/EC on the guidelines for the 
transfer of undertakings may be mentioned.

419(

)  See  article  regarding  this  historical  background:  M.  Fuchs  and  F. 
Marhold,  Europäisches  Arbeitsrecht  [European  labour  law],  Vienna, 
Springer, second edition 2006, p. 3 et seq.

420(

)  See Article 13 et seq. of Regulation (EEC) No 1612/68.

91

50 years of Social Security Coordination 

Past – Present – Future

exchange  of  workforces  was  also  a  social  security 
problem was indicated by the fact that, with Article 
51 of the EEC Treaty, a coordinating instrument was 
introduced as a component of the rules on the free-
dom  of  movement.  Coordinating  Regulation  No  3 
and later Regulation (EEC) No 1408/71 enacted on 
this basis also covered unemployment benefits.

Active labour market policy benefits must be inte-
grated into this coordinating system. Active labour 
market policy describes a strategic realignment of 
labour  market  policy.  Before  we  can  provide  legal 
answers relating to coordination, it is therefore first 
necessary  to  investigate  and  introduce  the  status 
quo,  as  it  were,  of  the  coordination  of  unemploy-
ment benefits. Consequently it must be asked what 
is  essential  and  new  about  active  labour  market 
policy  and  how  these  political  schools  of  thought 
have affected the form of unemployment benefits. 
Against  this  background,  the  legally  coordinated 
background can then be discussed.

II.  The SySTem oF 
CoordInaTIng 
unemPloymenT beneFITS

There follows a condensed description of the coor-
dinating  regulations  and  principles  concerning 
unemployment benefits. These explanations should 
provide  the  basis  for  clarifying  the  challenges 
which, by virtue of the strategies of an active labour 
market policy, the modified form of unemployment 
benefits  presents  nationally  to  the  coordinating 
system. This initial question raises a series of prob-
lems.  Essentially  it  is  a  matter  of  investigating  the 
extent to which the benefits in question fall within 
the material scope of Regulation (EEC) No 1408/71 
or in the foreseeable future that of Regulation (EC) 
No 883/2004 and, if so, into which benefit category 
of  the  material  scope  they  are  to  be  classified.  On 
this basis, related questions necessarily arise, which 
are aimed at examining the application of the coor-
dination mechanisms to these benefits. In particu-
lar, this applies to the question of benefit exports.

92

a.  The material scope of unemployment 

benefits

The material scope (421) of unemployment benefits 
is  laid  down  in  Article  4(1)(g)  of  Regulation  (EEC) 
No  1408/71 (422).  As  with  all  other  social  security 
benefits,  the  facts  of  Article  4(1)(g)  of  Regulation 
(EEC) No 1408/71 require that a benefit fulfils the 
characteristics of the concept of social security (423). 
According  to  the  jurisdiction  of  the  Court  of  Jus-
tice  (CJ),  the  distinction  between  benefits  which 
are  excluded  from  the  scope  of  Regulation  (EEC) 
No 1408/71 and those which fall within it depends 
mainly on the nature of the respective benefit, in 
particular on its purpose and the requirements for 
its being granted, but not, however, on whether a 
benefit  is  a  social  security  benefit  under  national 
law (424). A benefit may thus be considered a social 
security benefit if, firstly, it is granted to recipients 
without any individual means-testing assessment 
based  on  a  legal  statement  of  facts  and,  second-
ly,  it  relates  to  one  of  the  risks  explicitly  listed  in 
Article 4(1) of Regulation (EEC) No 1408/71 (425). In 
addition to these general criteria of affiliation with 
a  social  security  system,  the  specific  characteris-
tics of an unemployment benefit must be worked 
out thereafter. This is done on the basis of the per-
tinent  jurisdiction  of  the  CJ,  which  in  a  series  of 
decisions has drawn up the contours of unemploy-
ment benefits (426).

The CJ implemented these principles in a series of 
judgments. Subsequently a benefit is thus associat-
ed with the risk of unemployment if it is to replace 

(

(

(

(

(

(

421

)  With 

to 

regard 

the  personal  scope  of 

implementation  of 
unemployment benefits cf. M. Fuchs in M. Fuchs (ed.), Europäisches 
Sozialrecht  [European  social  law],  Baden-Baden,  Nomos,  fourth 
edition, 2005, Guide (43).

422

)  Article 3(1)(h) of Regulation (EC) No 883/2004.

423

)  Elaborated  by  M.  Fuchs  in  M.  Fuchs  (ed.),  Europäisches  Sozialrecht 
[European  social  law],  Baden-Baden,  Nomos,  fourth  edition,  2005, 
Article 4(7) et seq.

424

)  Case 249/83 Hoeckx [1985] ECR 973 I-11; Case C-111/91 Commission 

v Luxembourg [1993] I-817, para. 28.

425

)  Case C-66/92 Acciardi [1993] I-4567, para. 14.

426

)  See  also  U.  Rönsberg,  Die  gemeinschaftsrechtliche  Koordinierung 
von  Leistungen  bei  Arbeitslosigkeit.  Die  Verordnung  (EWG)  No 
1408/71  und  ihre  Reformbedürftigkeit  [Community  coordination  of 
unemployment benefits. Regulation (EEC) No 1408/71 and the need 
for reform], Herbolzheim, Centaurus, 2006, p. 36 et seq.

Maximilian Fuchs

a  salary  lost  as  a  result  of  unemployment  and  is 
therefore  intended  for  the  upkeep  of  the  unem-
ployed  worker (427).  These  benefit  characteristics, 
also  adopted  in  jurisprudential  literature (428),  have 
served to orient the CJ and legal practice in difficult 
borderline  cases.  Two  significant  judgments  must 
be highlighted because on the one hand they reveal 
the difficulties of definition that can arise, while on 
the other they also point to which approach to take. 
At this point it should also be mentioned that these 
particular  judgments  are  significant  for  the  later 
part of this paper because the facts are established 
in areas which we find in active labour market pol-
icy benefits.

In the Otte (429) case the CJ had to examine a benefit 
under  German  law  which  was  provided  for  older 
employees  of  the  coal-mining  industry  laid  off  on 
the basis of a shutdown or rationalisation. The qual-
ifying condition was that the person concerned had 
been employed in the German coal-mining indus-
try for at least two years preceding his dismissal and 
at the time of his dismissal had built up a period of 
insurance  of  180  months  minimum  as  a  rule,  and 
had had to be made redundant for reasons beyond 
his control, within the framework of a shutdown or 
rationalisation  plan  approved  by  the  Federal  Min-
istry of Economic Affairs. Moreover, he would have 
been able to meet the conditions for payment of an 
old-age pension no more than five years from the 
day of his dismissal.

What was controversial was whether this was based 
on  certain  similarities  regarding  old-age  benefits 
(Article  4(1)(c)  of  Regulation  (EEC)  No  1408/71)  or 
regarding  unemployment  benefits  or  whether  it 
was also a matter of early-retirement benefits. To be 
classified as an early-retirement benefit, the German 

(

(

427

)  Case  C-102/91  Knoch  [1992]  I-4341,  para.  44;  Case  C-57/96  Meints 

[1997] I-6708, para. 27.

428

)  See, for example, E. Eichenhofer, Sozialrecht der Europäischen Union 
European Union social law], Berlin, Erich Schmidt Publications, third 
edition, 2006, para. 259.

(

429

)  Case C-25/95 Otte [1996] I-3745.

government had specifically made a declaration in 
respect of employment policy objectives (430). Unlike 
the  Commission,  which  approved  classification 
as  an  old-age  benefit,  the  CJ  pronounced  itself  in 
favour  of  classification  as  an  unemployment  ben-
efit. The CJ could with good reason deny affiliation 
with an old-age benefit with regard to the purpose 
of  the  benefit (431). The  refusal  to  cover  unemploy-
ment  benefits  was  provided  with  an  illuminating 
justification (432).  If  the  argument  was  based  solely 
on the wording of the formulation which the CJ had 
provided for the classification of benefits in earlier 
assessments  (see  above  also),  it  could  have  been 
confirmed without a doubt that this was an unem-
ployment  benefit.  For  the  benefit  was  granted  in 
the  event  of  unemployment  and  its  purpose  was 
to guarantee the recipient’s upkeep. However, if we 
take a look at the concrete reasoning of the CJ, it can 
be shown that this stated objective is not enough 
on  its  own  to  determine  the  classification  of  the 
benefit. The CJ points to the circumstance that the 
amount  of  the  adaptation  allowance  is  measured 
in  accordance  with  retirement  pension  provisions; 
the recipient of the adaptation allowance is neither 
obliged to register as a job-seeker nor to be availa-
ble for work nor to refrain from taking up employed 
or self-employed activity, with the proceeds earned 
exceeding a certain upper limit. In addition, the CJ 
refers to the explanation of the Advocate General, 
who referred to the employment policy objective of 
the adaptation allowance, which in particular con-
sists  of  keeping  the  dismissed  employee  outside 
the scope of unemployment insurance.

We can therefore infer from the Otte decision that 
not  only  the  function  of  guaranteeing  a  replace-
ment income for unemployment and upkeep is cru-
cial for the approval of an unemployment benefit, 

430(

)  To date, early-retirement pensions are not explicitly included in the 
objective  area  of  agreement.  In  1996,  the  Commission  presented  a 
proposal  for  the  benefit  of  persons  with  an  entitlement  to  early-
retirement pensions, in order to carry the exceptional features of the 
benefits  in  the  proposed  legal  act  (OJ  C  62,  1.3.1996,  p.  14).  Early-
retirement pension regulations are now included in Article 3(1)(i) of 
Regulation (EC) No 883/2004.

431(

)  See Case C-25/95 Otte [1996] ECR I-3745, para. 34.

432(

)  Case C-25/95 Otte [1996] ECR I-3745, paras 36 and 37.

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50 years of Social Security Coordination 

Past – Present – Future

but  the  usual  requirements  for  an  unemployment 
benefit  under  national  law  must  also  be  met. The 
CJ  obviously  proceeds  from  a  definite  require-
ment  structure  for  unemployment  benefits,  which 
does not mean that all the features provided in the 
national legal system must always be met.

the  latter  benefit  is  a  precondition  for  its  award. 
It may also be concluded here that, in assessing a 
benefit  as  an  unemployment  benefit,  in  addition 
to the income replacement function, it is crucial to 
consider whether it displays the typical features of 
an unemployment benefit.

This appraisal of the CJ judgment in the Otte case is 
endorsed by the associated judgment in the Meints 
case (433). In question was compensation from a fund 
for  agricultural  employees  whose  employment 
contracts  had  ended  as  a  result  of  their  former 
employer’s  set-aside  schemes,  if  they  fulfilled  cer-
tain  conditions.  One  of  these  conditions  was  that 
the employee was entitled to benefits under unem-
ployment legislation. This concerned a one-off ben-
efit, the level of which was based exclusively on the 
beneficiary’s  age.  If  the  beneficiary  enters  into  an 
employment  contract  with  his  erstwhile  employer 
within  12  months  of  the  ending  of  the  previous 
contact, the benefit must be repaid.

Here the CJ also proceeds on the assumption of its 
fundamental approach, according to which unem-
ployment benefits are those benefits intended to 
replace  wages  lost  through  unemployment  and 
for the upkeep of the unemployed worker. Against 
this background, the CJ analyses the benefit con-
ditions, as already in the Otte case. There are four 
points  which  ultimately  lead  to  the  negation  of 
the  characterisation  of  an  unemployment  ben-
efit. For the CJ, decisive aspects are as follows (434). 
The  recipient  must  repay  the  benefit  if  he  enters 
into  a  new  employment  contract  with  his  former 
employer  within  12  months.  Neither  the  accrual 
nor  level  of  benefit  entitlement  depend  on  the 
duration  of  unemployment.  The  disputed  ben-
efit  is  not  paid  regularly,  but  just  once. The  level 
depends  solely  on  the  age  of  the  claimant  and 
finally the benefit is granted in addition to unem-
ployment  benefit,  as  provided  in  the  national 
regulation of social security, where entitlement to 

Concerns  regarding  the  endorsed  appraisal  of  the 
CJ  jurisdiction  could  arise  from  the  decision  in 
the  De  Cuyper  case (435).  Above  all,  the  information 
and  description  of  this  decision  is  also  exception-
ally important as it already contains aspects which 
will  later  play  a  significant  role  within  the  frame-
work of this contribution. In question was a benefit 
under  the  Belgian  Royal  Decree  on  the  regulation 
of  unemployment.  In  concrete  terms,  a  provision 
of this decree provided that a wholly unemployed 
worker who is at least 50 years of age and who has 
already  drawn  a  benefit  as  a  wholly  unemployed 
worker  with  a  certain  frequency  in  the  last  two 
years before application can be exempted from the 
so-called stamp duty, as a result of which he is no 
longer obliged to be available for work and take up 
any reasonable job, to register at the employment 
agency or participate in an accompanying plan and 
register as seeking employment. Certainly the pay-
ment  of  the  benefit  mentioned  was  incompatible 
with the exercise of a paid activity and short-term 
in duration.

The CJ confirmed the existence of an employment 
benefit.  As  with  previous  judgments,  here  too  the 
CJ  examined  the  benefit  prerequisites  in  detail. 
Both in terms of the purpose and structuring of the 
prerequisites, a typical unemployment benefit was 
studied. In question was how to deal with the fea-
ture  of  waiving  typical  requirements  for  the  avail-
ability of the unemployed person. The CJ was of the 
opinion that exemption from this obligation would 
not change the essential requirements of an unem-
ployment  benefit.  As  justification,  the  CJ  argued 
that  the  granting  of  this  exemption  did  not  mean 

(

(

433

)  Case C-57/96 Meints [1997] ECR I-6708.

434

)  Case C-57/96 Meints [1997] ECR I-6708, para. 29-32.

(

435

)  Case C-406/04 De Cuyper [2006] ECR I-6947.

94

Maximilian Fuchs

Germany,  this  benefit  payment  was  stopped.  Had 
this been an invalidity benefit within the meaning 
of  Article  4(1)(b)  of  Regulation  (EEC)  No  1408/71, 
the  Austrian  residence  clause  could  not  have  pre-
vented the export of the benefit on account of Arti-
cle 10(1) of Regulation (EEC) No 1408/71.

Regarding  the  definition  criteria,  the  CJ  refers  to 
early judgments (438) according to which social secu-
rity  benefits  are  considered  independently  of  the 
special  characteristics  of  different  national  legisla-
tions as benefits of the same kind, if their purpose 
and  objectives  as  well  as  their  basis  of  calculation 
and  the  preconditions  for  their  being  granted  are 
identical.  In  order  to  be  able  to  establish  this,  the 
CJ  once  again  employed  the  criteria  which  it  had 
developed in the decisions just discussed. It bases 
its argument essentially on the calibre of the ben-
efit, i.e. the eligibility criteria and the basis of their 
calculation. The circumstance that the benefit is for 
an unemployed person without an income, so that 
he  must  be  provided  with  financial  means,  would 
have basically enabled allocation as both a disabil-
ity  and  an  unemployment  benefit.  Only  by  means 
of information about the eligibility criteria and the 
basis of calculation does the CJ create the basis for 
being  able  to  effect  the  allocation. What  is  crucial 
is  that  all  the  eligibility  criteria  for  entitlement  to 
unemployment  benefit  must  be  complied  with, 
although the requirement of availability is waived. 
However,  by  definition  the  purpose  of  the  benefit 
is for the benefit recipient to remain in the labour 
market  during  the  phase  of  uncertainty  regard-
ing  the  granting  of  the  disability  benefit  in  order 
to  prevent  subsequent  difficulty  in  gaining  access 
to  the  labour  market,  if  the  application  for  the 
occupational  disability  benefit  should  be  refused. 
The  advance  benefit  is  calculated  according  to 
the  same  rules  as  unemployment  benefit  and  is 
granted by the authorities responsible for the pay-
ment of unemployment benefit. Also typical for an 
unemployment benefit is the circumstance that the 

438(

)  Case C-171/82 Valentini [1983] ECR 2157, para. 13; Case C-406/04 De 

that  the  unemployed  person  would  be  exempt 
from  the  obligation  to  make  himself  available  to 
the employment service, as even if he is exempted 
from  the  obligation  to  register  himself  as  a  job-
seeker  and  to  accept  any  reasonable  job,  he  must 
always be available to this agency for the purpose 
of monitoring his professional and domestic situa-
tion.  This  justification  is  not  convincing,  however. 
Being available to the labour market is an essential 
criterion for entitlement to unemployment benefit 
in all Member States. However, it may be possible to 
justify the position of the CJ by stating that the Bel-
gian benefit in question is not an isolated case in a 
European context. In other countries too, there are 
comparable provisions in the legislation on employ-
ment benefits. For example, in German law, Section 
428 para. 1 of the Code of Social Law (SGB) III pro-
vides for the payment of unemployment benefit to 
workers  who  have  reached  58  years  of  age,  even 
if  they  are  not  prepared  to  work  and  do  not  avail 
themselves and do not wish to avail themselves of 
all  opportunities  to  end  their  unemployment. The 
reason  for  this  law,  according  to  the  legislators, 
lies in the fact that upon reaching 58 years of age, 
reintegration into working life generally no longer 
comes into consideration (436). Accordingly, the issue 
now is more that of an early-retirement benefit.

An  important  case,  which  might  probably  play  a 
role  in  other  countries  in  future,  was  the  Petersen 
case (437). Petersen, a German national, was employed 
in  Austria.  He  applied  to  the  Austrian  pension 
insurance  institution  for  an  occupational  disabil-
ity pension. Austrian legislation (Section 23 of the 
Unemployment  Insurance  Act  (AlVG))  grants  an 
advance unemployment benefit or emergency aid 
while the pension application is being processed, if 
the preconditions for drawing these benefits exist, 
with the exception of the precondition of employ-
ability,  willingness  and  readiness  to  work.  This 
advance  payment  was  also  made  to  the  claimant, 
Mr Petersen. However, when Mr Petersen moved to 

436(

)  See  Winkler 

III  Arbeitsförderung  [Promotion  of 
employment], Munich, C.H. Beck Publishers, 2006, Section 428, para. 2.

in  Gagel,  SGB 

(

437

)  Case C-228/07 [2008], not yet published.

Cuyper [2006] ECR I-6947, para. 25.

95

50 years of Social Security Coordination 

Past – Present – Future

benefit  is  stopped  as  soon  as  paid  employment  is 
taken  up.  All  this  permits  the  conclusion  that  the 
benefit  is  mainly  supposed  to  replace  lost  income 
on account of unemployment and is thus intended 
for the upkeep of unemployed workers.

b.  Benefits providing support

The  preceding  examples  from  the  jurisdiction  of 
the CJ have shown that the disputed cases are gen-
erally in the field of cash benefits. Historically, cash 
benefits have also initially played the most impor-
tant  role  within  the  scope  of  systems  to  protect 
against the risk of unemployment. In the course of 
time,  however,  the  Member  States  have  substan-
tially expanded the range of various kinds of fund-
ing benefits. And when we speak of measures in the 
active  labour  market  policy,  this  area  plays  a  spe-
cial  role  because  —  as  has  been  shown  —  active 
labour  market  policy  specifically  wishes  to  avoid 
a  situation  in  which  people  remain  unemployed, 
while financial benefits are made available to them. 
On the contrary, they should be involved in active 
measures.  Hence  these  issues  must  be  given  par-
ticular attention.

As far as can be seen, until now only one decision 
has  been  issued  by  the  CJ  regarding  this  prob-
lem — the judgment in the Campana case (439). This 
judgment  certainly  does  not  provide  exhaustive 
information  about  the  issues  discussed  here.  Nev-
ertheless,  some  very  substantial  statements  were 
made.  The  case  concerned  an  applicant  of  Italian 
nationality,  working  in  Germany  and  who  partici-
pated  in  a  course  to  prepare  for  the  examination 
for the master’s certificate as a radio and television 
technician. He requested a defrayal of the costs for 
this  course.  According  to  German  law,  workers  in 
employment  are  also  entitled  to  these  benefits,  if 
they have been paying insurance contributions for 
a certain period of time before the scheme (440). This 
judgment  initially  derives  meaning  insofar  as  no 

case of unemployment existed in the individual case. 
Therefore the Advocate General had also begun his 
conclusion by considering whether benefits within 
the  meaning  of  Article  4(1)(g)  of  Regulation  (EEC) 
No 1408/71 could also be benefits of a preventive 
nature,  intended  to  limit  the  onset  of  unemploy-
ment (441). The Advocate General also drew attention 
to the fact that even then (1985!) a development in 
that direction was also shown to address the risk of 
unemployment with pre-emptive measures.

The CJ took up this train of thought in its decision. 
It emphasises that ‘in the light of the present eco-
nomic  situation  the  Member  States  have  estab-
lished  assistance  for  vocational  training  intended 
both to enable persons in employment to improve 
their  qualifications  to  avoid  the  threat  of  unem-
ployment  and  to  enable  unemployed  persons  to 
retrain  and  find  new  employment.  Both  types  of 
benefit are intended to combat unemployment.’ (442) 
In  order  to  also  accommodate  misgivings  raised 
by  Germany,  which  argued  particularly  that  the 
benefits  for  assistance  for  vocational  training  also 
served purposes other than the fight against unem-
ployment, the CJ restricted its opinion. As benefits 
within the meaning of Article 4(1)(g) of Regulation 
(EEC) No 1408/71, only those benefits for assistance 
for vocational training should be considered which 
involve either unemployed workers or those work-
ers  still  in  employment  for  whom  there  is  a  tangi-
ble risk of becoming unemployed. The question of 
whether there is a tangible risk of the worker cur-
rently in employment becoming unemployed must 
be examined by the national authorities (443).

C.  Non-contributory benefits in cash

As will be shown later, non-contributory benefits in 
cash  play  an  important  role  within  the  framework 
of  active  labour  market  policy.  It  is  therefore  also 
necessary to describe the legislative and theoretical 
foundations of this type of benefit here. This must 

(

(

439

)  Case C-375/85 Campana [1986] ECR 2387.

440

)  Section 46, para. 1, AFG a.F., now Sections 77 et seq., SGB III.

(

(

(

441

)  See Submissions ECR 1987, 2395, 2397.

442

)  Case C-375/85 Campana [1986] ECR 2387, para. 9.

443

)  Case C-375/85 Campana [1986] ECR 2387, paras 12 and 13.

96

Maximilian Fuchs

take  place  against  the  following  background.  The 
current  structure  of  Article  4  of  Regulation  (EEC) 
No  1408/71 (444)  essentially  returns  to  the  jurisdic-
tion of the CJ (445). In this context it seems useful to 
single  out  the  CJ  decision  in  the  Hoeckx  case (446). 
The claimant, Vera Hoeckx, a Dutch national, lived 
in  Belgium  and  received  unemployment  benefits 
there.  For  a  time  she  moved  to  France,  where  she 
was granted further unemployment benefits. When 
after some time she returned to Belgium, she was 
no  longer  entitled  to  unemployment  benefit.  She 
therefore applied for a maintenance benefit, which 
was refused. In order to appreciate the CJ decision, 
it  must  be  realised  that,  under  Belgian  law,  needi-
ness  is  a  prerequisite  for  payment  of  the  benefit 
and the recipient of the benefit must demonstrate 
that he or she is available for work. In addition, for 
EU  nationals  it  was  established  that  they  are  enti-
tled to a maintenance benefit if they have actually 
resided in Belgium for at least five years preceding 
the point in time at which this assistance is granted. 
It is evident that this Belgian rule is clearly contra-
ry to Article 3 of Regulation (EEC) No 1408/71 and 
the ban on discrimination therein. Admittedly, this 
aspect would only have been relevant if the benefit 
in question had been dealt with in the sense of Arti-
cle 4(1) of Regulation (EEC) No 1408/71.

In  answer  to  this  question,  the  CJ  initially  refers 
to  its  established  case-law,  whereby  the  differ-
ence  between  benefits  which  are  excluded  from 
the  scope  of  the  regulation,  and  those  which  fall 
within it, essentially depends on the basic features 
of  each  benefit,  in  particular  its  purpose  and  the 
preconditions of it being granted, and not whether 
a benefit is classified as a social security benefit by 
the  national  legislations.  At  the  same  time  the  CJ 
stresses  that  there  are  nationally  legislated  laws 
which  are  equally  associated  with  both  catego-
ries  and  thus  elude  all  general  classification.  The 

(

444
) 

In future this structure will be a result of Articles 3 and 70 of Regulation 
(EC) No 883/2004.

(

445

)  See  comprehensively  M.  Fuchs  in:  M.  Fuchs  (ed.),  Europäisches 
Sozialrecht  [European  social  law],  Baden-Baden,  Nomos,  4.  2005 
edition, Article 4, para. 25 et seq.

CJ  therefore  acknowledges  that  there  is  a  type  of 
hybrid  benefit,  an  expression  occasionally  used  to 
describe  these (447).  In  this  sense,  hybrid  benefits 
feature strong elements of social assistance such as 
social security. In light of the existing legal situation 
of  the  time,  in  1985  the  CJ  had  to  make  a  choice 
between  affiliation  to  one  system  or  another.  Had 
it decided on social assistance, the material, factual 
area of application of Regulation (EEC) No 1408/71 
would  not  have  come  about  (Article  4(4)  of  Regu-
lation (EEC) No 1408/71). In its explanation, the CJ 
stressed  as  a  crucial  criterion  of  definition  that  a 
statutory regulation only applies in the field of social 
security within the meaning of Regulation (EEC) No 
1408/71, if inter alia it has a connection with one of 
the risks explicitly listed in Article 4(1). The CJ does 
not comment on this connection in its decision. The 
denial that a branch of social security is involved in 
this  respect  is  essentially  based  on  considerations 
which emphasise the social welfare character of the 
benefit. The CJ statements in this regard are of fun-
damental importance, which is why they should be 
quoted verbatim here (448):

‘As  is  clear  from  documents  before  the  Court,  the 
“minimex” is characterised on the one hand by the 
fact that it confers upon recipients a legally defined 
position  and,  on  the  other,  by  the  fact  that  it  is 
granted to any person who does not have adequate 
means  and  is  unable  to  obtain  them  either  by  his 
own efforts or in any other way’ (Article 1(1) of the 
Law  of  7  August  1974);  it  thus  adopts  need  as  an 
essential  criterion  for  its  application  and  does  not 
make any stipulations as to periods of work, contri-
bution or affiliation to any particular social security 
body covering a specific risk. A claimant need only 
show  that “he  is  prepared  to  accept  work”  unless 
prevented  by  his  state  of  health  or  compelling 
social reasons; furthermore, he is required to exer-
cise his rights to social benefits or even any rights 

447(

)  Cf. F. Pennings, Introduction to European social security law, Antwerp/

Oxford/New York, intersentia, fourth edition, 2003, p. 69 et seq.

(

446

)  Case C-249/83 Hoeckx [1985] ECR 973.

448(

)  Case C-249/83 Hoeckx [1985] ECR 973, para. 13.

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50 years of Social Security Coordination 

Past – Present – Future

to  maintenance  if  the  public  social  welfare  centre 
considers  it  necessary  (Article  6(1)  and  (2)  of  the 
1974 Law).’

Subsequently  the  CJ  had  to  take  numerous  other 
decisions,  which  were  —  in  short  —  about  such 
hybrid benefits (449).

As is generally known, the CJ jurisdiction, but also 
the residual uncertainties in the application of the 
law, resulted in the European legislator deciding to 
codify CJ jurisdiction. This was achieved by means 
of  Regulation  (EEC)  No  1247/72 (450).  This  resulted 
in the insertion of subparagraph 2(a) in Article 4 of 
Regulation  (EEC)  No  1408/71. Through  Regulation 
(EC)  No  647/2005 (451),  Article  4(2)(a)  of  Regulation 
(EEC) No 1408/71 received its current wording (452). 
What  is  crucial  is  that  these  benefits  are  listed  in 
Annex IIa (453). This entry is of a constitutive nature.

d.  The export of unemployment benefits

Article  4(2)(a)  of  Regulation  (EEC)  No  1408/71  is 
closely related to Article 10(a) of Regulation (EEC) 
No 1408/71 (454). The principle of exporting benefits, 
as  established  in  Article  42  EC  and  implemented 
in Article 10 of Regulation (EEC) No 1408/71 (455), is 
significantly restricted in the case of non-contribu-
tory cash benefits. These benefits are distinguished 
by the fact that, from the perspective of legislative 
motivation,  they  have  a  strong  connection  with 
the  respective  national  social  policy  of  the  time. 
Therefore  the  national  provisions  regularly  make 
the  place  of  residence  an  element  of  eligibility 

449

)  Of particular importance are the decisions of Case C-1/72 Frilli [1972] 
ECR I-475; Case C-24/74 Biason [1974] ECR 999; Case C-78/91 Hughes 
[1992]  ECR  I-4839;  Case  C-6/92  Acciardi  [1993]  ECR  I-4591;  Case 
C-20/96 Snares [1997] ECR I-6057; Case C-297/96 Partridge [1998] ECR 
I-3467; Case C-90/97 Swaddling [1999] ECR I-1075.

450

)  See Regulation (EEC) No 1247/92 of the instalment of 30 April 1992 
for the amendment to Regulation (EEC) No 1408/71 of 30 April 1992 
(OJ L 136, 19.5.1992).

451

)  See AblEG (OJ L 117, 4.5.2005).

452

)  Article 70 of Regulation (EC) No 883/2004 assumed this definition.

453

)  For  the  admission  of  this  feature,  the  regulator  feels  compelled 
on  the  basis  of  the  CJ  in  Case  C-215/99  Jauch  [2001]  ECR  I-1901, 
and  Case  C-43/99  Leclere  [2001]  ECR  I-4265.  See  also  No  3  of  the 
commencement clause Regulation (EC) No 647/2005.

for benefits. The jurisdiction of the CJ, which was 
forced to steer a middle course in the definition of 
traditional  social  security  benefits  (Article  4(1)  of 
Regulation (EEC) No 1408/71) and the systems of 
social  assistance  (Article  4(4)  of  Regulation  (EEC) 
No 1408/71), ultimately brought about the incor-
poration of non-contributory cash benefits in the 
coordination  of  social  legislation.  Nevertheless, 
EU  Member  States  did  not  wish  to  accept  this  so 
easily.  With  Regulation  (EEC)  No  1247/92 (456)  the 
European  legislator  decided  to  remove  this  type 
of cash benefit from the unrestricted coordination 
of  Article  10(1)  of  Regulation  (EEC)  No  1408/71. 
The exclusive jurisdiction of the Member State of 
residence of the benefit in question is established 
in  Article  10(a)  of  Regulation  (EEC)  No  1408/71, 
provided  that  the  benefit  is  listed  in  Annex  IIa. 
In  any  case,  in  terms  of  unemployment,  the  ben-
efits do not come under the general export order 
of Article 10 of Regulation (EEC) No 1408/71. The 
repeal  of  the  place  of  residence  clause  in  Article 
10  of  Regulation  (EEC)  No  1408/71  only  refers  to 
the benefits explicitly mentioned there. The non-
involvement of unemployment benefits is under-
stood against the background of the coordination 
provisions in Article 67 et seq. of Regulation (EEC) 
No 1408/71 (457). Article 69 of Regulation (EEC) No 
1408/71 makes it clear that the export of benefits 
should  only  be  possible  under  the  conditions 
stated there and on an extremely restricted scale. 
A  further  reason  for  transnational  provision  of 
unemployment benefits is described in Article 71 
of Regulation (EEC) No 1408/71.

On  account  of  this  distinct  legal  position,  it  was 
therefore  undisputed  legal  practice  that  unem-
ployment benefits were only transferred to anoth-
er  state  on  this  basis.  Nevertheless,  it  was  to  be 
expected  that  one  day  the  CJ  would  also  discov-
er  a  case  which  would  occasion  a  confrontation 
between existing coordination law and the regula-
tions  on  the  freedom  of  movement  (Article  18  et 

454

)  Prospective Article 70(4) of Regulation (EC) No 883/2004.

455

)  Prospective Article 7 of Regulation (EC) No 883/2004.

(

(

456

)  See C above.

457

)  Prospective Article 61 et seq. of Regulation (EC) No 883/2004.

(

(

(

(

(

(

(

98

Maximilian Fuchs

seq.  EC).  As  is  known,  the  CJ,  beginning  with  the 
Martinez  Sala  case (458),  also  instrumentalised  the 
Freedom of Movement Act from Article 18 for the 
field of social security (459).

Therefore it was not surprising that these principles 
would  one  day  also  influence  the  coordination  of 
unemployment benefits. This first took place in the 
abovementioned  De  Cuyper  case (460). The  claimant 
of  Belgian  nationality  was  refused  unemployment 
benefit  because  he  was  living  in  France.  Invoking 
previous  case-law,  the  CJ  established  that  such  a 
rule  only  put  citizens  at  a  disadvantage  because 
they have made use of their freedom to migrate to 
and stay in another Member State, and this consti-
tutes a restriction of the freedoms bestowed upon 
every citizen of the Union by Article 18 (461). Accord-
ing to Community legislation, such a restriction may 
only be justified if it is based on objective consid-
erations of the public interest, independent of the 
nationality of the person concerned, which reason-
ably adhere to objectives pursued in a lawful man-
ner in the national legislation (462). This set in motion 
the standard inspection scheme always used by the 
CJ  where  interference  with  basic  freedoms  is  con-
cerned.  At  the  level  of  justification  of  the  interfer-
ence, objective considerations of the public interest 
must be given, which are independent of the nation-
ality of the person involved, and the measure must 
be proportionate. The CJ confirms these precondi-
tions in a concrete case. It stresses that, in the case 
of control measures which are intended to examine 
the  domestic  situation  of  the  unemployed  person 
concerned  and  the  possible  existence  of  sources 
of  income  not  reported  by  the  person  concerned, 
the  effectiveness  by  and  large  depends  on  the 
inspection taking place unexpectedly and it being 

458(

)  Case C-85/96 Martínez Sala [1998] ECR I-2691.

459(

)  See  also  E.  Eichenhofer,  Sozialrecht  der  Europäischen  Union  [Social 
law of the European Union], Berlin, Erich Schmidt Publishers, 3. 2006 
edition, para. 334 et seq.

460(

)  See above under A.

461(

)  Case C-406/04 De Cuyper [2006] ECR I-6947, para. 39.

462(

)  Case C-406/04 De Cuyper [2006] ECR I-6947, para. 40.

possible to perform it on the spot as the responsi-
ble service must be able to examine the correlation 
between  the  unemployed  person’s  statement  and 
the actual physical conditions.  Also to be  noted is 
that the inspection to be performed in connection 
with unemployment benefits points out any anom-
aly which might justify the establishment  of more 
restrictive  mechanisms  than  those  for  the  inspec-
tion of other benefits.

While the result may be satisfactory, the reasoning 
certainly  is  not.  There  are  doubts  about  whether 
this decision is correct both in relation to the word-
ing  of  Article  18  EC  and  its  legislative  history  and 
in relation to the system of EC legislated principles 
of  coordinating  social  legislation.  These  doubts 
should  be  seen  against  the  following  backdrop. 
As  a  rule,  national  employment  promotion  legis-
lation provides for the granting of unemployment 
benefits only if the person concerned is resident or 
staying in the state providing the benefit (463). In the 
light of the rule in Article 42 EC, the territorial prin-
ciple (464)  expressed  therein  cannot  be  upheld.  In 
principle, this EU provision requires payment of the 
benefit regardless of domicile. However, Article 42  
EC requires no substantiation of the so-called export 
principle without restrictions. What are required are 
the measures necessary for the creation of freedom 
of movement. The European legislator decided on a 
differentiated structuring of the transnational pro-
vision of unemployment benefits (465). It ruled out a 
general application of benefit export through non-
take-up  of  unemployment  benefits  in  Article10. 
Exporting  benefits  should  only  be  possible  within 
the framework of Articles 69 and 71 of Regulation 
(EEC) No 1408/71. The current limitations and restric-
tions  on  free  movement  by  Article  69  have  been 

463(

)  See  also  F.  Warnecke,  Koordinierendes  Arbeitsförderungsrecht  und 
Freizügigkeit  [Coordinating  laws  promoting  work  and  freedom  of 
movement], Baden-Baden, Nomos, 1995, p. 25 et seq.

464(

)  On the importance of the territorial principle in international social 
law,  see  M.  Fuchs  and  U.  Preis,  Sozialversicherungsrecht  [Social 
security  law],  Cologne,  Otto  Schmidt  Publishers,  second  edition, 
2009, Section 61 II.

465(

)  See the differentiation between the export and integration principle, 
cf.  R.  Langer,  in  M.  Fuchs  (ed.),  Europäisches  Sozialrecht  [European 
social law], Baden-Baden, Nomos, fourth edition, 2005, Article 42 EC 
para. 20 et seq.

99

50 years of Social Security Coordination 

Past – Present – Future

frequently criticised (466). In particular, the extension 
of the three-month deadline is favoured (467). In the 
restructuring of coordination legislation by Regula-
tion (EC) No 883/2004, an extension has also been 
considered.  However,  the  proposals  have  received 
only  a  limited  hearing  with  the  legislative  regula-
tory authorities (468).

In this context, the question to be raised is whether 
the coordination provisions of Article 67 et seq. of 
Regulation (EEC) No 1408/71 satisfy the conditions 
of  the  provisions  on  the  freedom  of  movement  of 
workers  (Article  39  et  seq.  EC). With  justification  it 
is  repeatedly  shown  that  coordinating  European 
social legislation represents an annex institution for 
the  freedom  of  movement  of  workers.  A  German 
author  has  therefore  coined  the  phrase  of  free-
dom-of-movement  specific  social  legislation (469). 
And the fact that the basis for authorisation of the 
Community’s legal acts in the area of social security 
coordination  is  contained  in  Article  42  EC  shows 
the  systematic  link  with  the  legislation  of  the  free 
movement  of  workers. This  is  why  the  criticism  of 
the  existing  coordination  regulations  for  unem-
ployment benefits by the authors concerned is also 
presented from the perspective of a lack of respect 
for  freedom  of  movement.  This  criticism  is  not 
only  directed  against  Article  69,  but  also  against 
the  provisions  of  Article  67(3)  of  Regulation  (EEC)  
No 1408/71 (470). The CJ had already had to deal with 
such  arguments  at  an  early  stage.  An  indication 
of  the  CJ’s  position  is  provided  by  the  decision  in 

466(

)  See,  for  example,  the  contributions  to  the  discussion  from  E. 
Eichenhofer  and  A.  Gagel  in:  B.  Schulte  and  H.  Zacher  (eds), 
Wechselwirkungen zwischen dem Europäischen Sozialrecht und dem 
Sozialrecht  der  Bundesrepublik  Deutschland  [Correlations  between 
European  social  law  and  the  social  law  of  the  Federal  Republic  of 
Germany], Berlin, Duncker and Humblot, 1991, p. 189 et seq.

467(

‘Neuerungen 

)  The  proposal  was  also  submitted  by  the  Commission;  see. 
B.  Karl, 
in  der  Koordinierung  des  europäischen 
Arbeitslosenversicherungsrechts’  [Innovations  in  the  coordination 
of European unemployment insurance law], in: F. Marhold (ed.), Das 
neue Sozialrecht der EU [The new social law of the EU], Vienna, Linde, 
2005, p. 47.

468(

)  Cf. Article 64 of Regulation (EC) No 883/2004 (extension option to six 

months).

469(

)  Cf.  R.  Schuler,  Das  Internationale  Sozialrecht  der  Bundesrepublik 
Deutschland  [International  social  law  of  the  Federal  Republic  of 
Germany], Baden-Baden, Nomos, 1988, p. 277.

470(

)  E. Eichenhofer, ‘Freizügigkeit und Europäisches Arbeitsförderungsrecht’ 
[Freedom of movement and European laws promoting labour], ZIAS, 
1991, p. 161 et seq.

100

the  Testa  case (471).  The  CJ  points  out (472)  that  Arti-
cle 69 of Regulation (EEC) No 1408/71 describes  a 
regulation  promoting  the  freedom  of  movement 
partially  overcoming  the  territorial  arrangement 
of  national  legislation  relating  to  the  freedom  of 
movement (473).  The  basic  right  to  live  in  another 
Member State is conceded to the worker, in order to 
find  employment  there  and  still  retain  unemploy-
ment benefits. That Article 69(2) limits this right to 
freedom  of  movement  to  a  certain  period  of  time 
and makes it dependent on the fulfilment of certain 
conditions is acceptable. Article 42 EC does not pro-
hibit  the  Community  legislator  from  making  ben-
efits  conceded  for  the  realisation  of  the  freedom 
of movement of workers dependent on conditions 
and from establishing their limits. In later decisions, 
the  CJ  emphasised  this  legal  concept (474).  Rightly, 
therefore, the talk has been of established case-law 
on the part of the CJ, with which it has judged the 
compatibility  of  the  coordination  rules  of  unem-
ployment benefits (475).

Against this backdrop it appears incomprehensible 
how, despite this established case-law, the CJ could 
contemplate  a  violation  of  Article  18  EC  in  the  De 
Cuyper case. The methodical approach of the CJ is 
to  be  rejected  for  two  different  reasons. The  rules 
concerning  the  freedom  of  movement  of  workers 
(Article 39 et seq. EC) are lex specialis in comparison 
with  the  specific  EU  freedom  of  movement  regu-
lations.  It  has  been  emphasised  with  justification 
that the legally protected good of Article 18 is the 
freedom of the person as such, and not the mobility 
of production factors and economic funding agen-
cies. Therefore  the  right  of  Article18  EC  prevails  if 
the  citizen  of  the  Union  wishes  to  relocate  and 
establish him/herself without economic objectives 
within the EU. Insofar as this freedom of movement 

(

(

(

(

(

471

)  Case C-41/79 Testa [1980] ECR 1979.

472

)  As previously in Case C-139/78 Coccioli [1979] ECR 991.

473

)  Case C-41/79 Testa [1980] ECR 1979, para. 17 et seq.

474

)  See Case C-272/90 van Noorden [1991] ECR I-2543; Case C-62/71 Gray 

[1992] ECR I-2737; Case C-215/00 Rydergard [2002] ECR I-1817.

475

)  Cf. E. Eichenhofer, Sozialrecht der Europäischen Union [Social law in 
the European Union], Berlin, Erich Schmidt Publishers, third edition, 
2006, p. 161.

and  residence  is  exercised  for  economic  reasons, 
the provisions concerning the worker’s freedom of 
movement, establishment and entitlement to serv-
ices are relevant as special norms (476). Article 18 EC 
should  therefore  not  have  been  used  as  a  bench-
mark at all.

However, if one wishes to implement Article 18 EC, 
it  is  necessary  to  test  the  right  of  the  freedom  of 
movement established therein in a stricter applica-
tion  of  the  wording  of  Article  18.  Article  18(1)  EC 
puts the right to freedom of movement under the 
express  proviso  of  the  restrictions  and  conditions 
provided in this agreement and in the implementa-
tion rules. Indisputably, these include Article 42 EC  
and  Regulation  (EEC)  No  1408/71  enacted  on 
this  basis.  As  Regulation  (EEC)  No  1408/71  —  as 
emphasised  by  the  CJ  itself  —  expressly  regards 
the  coordination  legislation  of  unemployment 
benefits to be in harmony with EC legislation, it is 
unequivocally  clarified  that  a  citizen  of  the  Union 
is not entitled to a more far-reaching right arising 
from Article 18(1) EC.

This is not to say that the conditions that limit the 
freedom  of  movement,  be  they  national  laws  or 
Regulation (EEC) No 1408/71, would not have been 
amenable to examination according to the bench-
mark  of  Article  39  et  seq.  EC.  As  has  already  been 
demonstrated  several  times  in  this  paper,  the  law 
on  the  coordination  of  social  security  is  a  compo-
nent  of  the  law  on  the  freedom  of  movement  of 
workers of Article 39 et seq. EC. Accordingly it must 
also safeguard its inherent cohesion with this area 
of regulation. Therefore it is possible to ask whether 
Regulation  (EEC)  No  1408/71 (477)  has  made  appro-
priate use of the authorisation in Article 42 EC (478).

(

(

(

476

)  As  applicable:  A.  Hatje 

in  J.  Schwarze 

(ed.),  EU-Kommentar 
[Commentary],  second  edition,  2009,  Article  18  ECG,  para.  18; 
W.  Kluth  in  C.  Callies  and  M.  Ruffert,  EUV/EGV,  Munich,  C.H.  Beck 
Publishers,  third  edition,  2007,  Article  18  EC,  para.  16;  and  also  C. 
Becker, ‘Freizügigkeit  in  der  EU.  Auf  dem Weg  vom  Begleitrecht  zur 
Bürgerfreiheit’ EuR,1999, 522, 532.

477

)  Naturally the same applies to the draft Regulation (EC) No 883/2004.

478

)  One of the best-known examples of such an examination describes 
the  decision  of  the  CJ  in  the  case  of  Vougioukas:  Case  C-443/93 
Vougioukas [1995] ECR I-4033.

Maximilian Fuchs

In the Petersen case, the CJ did not test the law of 
coordination  of  unemployment  benefits,  as  it  is 
established in Regulation (EEC) No 1408/71, accord-
ing to the benchmark of Article 39, but the domicile 
clause of Austrian legislation. The CJ reasoning for 
this was as follows (479). It is established that Article 
10(1) of Regulation (EEC) No 1408/71 does not pro-
vide for the export of unemployment benefits. The 
conditions  for  the  export  of  benefits  according  to 
Article  69  and  71  of  Regulation  (EEC)  No  1408/71 
would not have existed. At this point the CJ aban-
dons the reasoning for legal coordination and turns 
to  the  examination  of  the  domicile  clause  accord-
ing to Austrian law. Regulation (EEC) No 1408/71 is 
said not to have created a common social security 
system but to have allowed individual national sys-
tems to exist and wanted to coordinate the national 
systems. In the absence of harmonisation at Com-
munity  level,  Member  States  therefore  continued 
to be responsible for the structuring of their social 
security  systems.  However,  at  the  same  time  they 
had to consider Community legislation and in par-
ticular the EC provisions on the freedom of move-
ment  of  workers.  The  objective  pursued  under 
Article 39 to 42 EC would not have been achieved 
if workers who have made use of their right to the 
freedom  of  movement  were  to  lose  social  secu-
rity  entitlements  guaranteed  to  them  by  the  legal 
provisions of a Member State, in particular if these 
entitlements  represent  payment  in  return  for  the 
contributions they have paid. Such a consequence 
could actually deter Community workers from mak-
ing use of their right to freedom of movement, and 
thus impair this freedom.

Thus  the  CJ  arrives  at  an  examination  of  the  resi-
dency  requirement  according  to  Austrian  law.  In 
this,  the  CJ  sees  a  veiled  form  of  discrimination 
within  the  meaning  of  Article  39(2)  EC,  in  which 
objective  justification  is  absent,  and  for  which  in 
particular  the  Austrian  government  cannot  pro-
vide  any  reasons  for  justification.  This  result  can 
be  accepted,  but  not  the  justification.  Firstly,  an 

479(

)  See the CJ chain of argument in Case C-228/07 Petersen [2008] ECR 

I-6989, para. 37 et seq.

101

50 years of Social Security Coordination 

Past – Present – Future

examination  would  have  been  necessary  to  see 
whether Article 69 also permitted payment of the 
claimant’s  benefit  in  Germany.  Under  the  precon-
ditions stated in Article 69(1), the applicant would 
also have been entitled to cash benefits in Germa-
ny for at least three months. The fact that the appli-
cant has not only resided in Germany, but has also 
taken up his place of residence, does not exclude 
the  implementation  of  Article  69  of  Regulation 
(EEC) No 1408/71 (480). As the applicant was already 
registered  as  a  job-seeker  with  the  employment 
service four weeks after the start of unemployment 
and had been available for work, the only remain-
ing issue could have been that of registration with 
the employment service in Germany. It can only be 
assumed that the applicant failed to do this. How-
ever,  under  Austrian  law,  it  was  not  a  question  of 
availability, willingness or readiness to work at all. 
But compliance with Article 69(1)(b) of Regulation 
(EEC)  No  1408/71  cannot  be  reasonably  required 
either. This result could have been obtained on the 
basis of a simple interpretation. Such an interpreta-
tion would certainly have been called for by virtue 
of  Article  39  EC.  EC  legal  provisions  must  also  be 
set  out  in  the  light  of  fundamental  freedoms.  In 
order to insist on the domicile requirement in this 
case would be an interpretation of Article 69 con-
trary  to  the  freedom  of  movement,  which  would 
be justified by nothing. Consequently, for the first 
three months in any case, the entitlement to ben-
efits in Germany would have had to be affirmed at 
the level of coordination legislation.

In relation to the time restriction of three months 
laid down in (c), the same reasoning must apply. 
As  long  as  the  benefit  from  the  pension  scheme 
is  not  paid,  payment  of  unemployment  benefit 
must continue.

One may argue against this solution that as a result 
it amounts to the same thing. The solution process 
favoured here relies on the consideration that it is 

(

480

)  As  applicable:  E.  Eichenhofer 

in  M.  Fuchs  (ed.),  Europäisches 
Sozialrecht [European social law], Baden-Baden, Nomos, 4. Vol. 2005, 
Article 69, para. 2.

not  acceptable  to  cancel  the  clear  criteria  of  the 
exportability  of  unemployment  benefits,  as  these 
are  expressed  in  Article  69  et  seq.  of  Regulation 
(EEC)  No  1408/71,  so  as  to  impose  different  solu-
tions  on  national  legislation  by  applying  the  free-
dom of movement regulation. 

III.  aCTIve labour markeT 

PolICIeS

In  the  second  half  of  the  1990s,  there  was  an  ini-
tially  theoretical  and  then  practical  reorientation 
of state intervention in the labour market. The new 
concepts  were  generally  grouped  together  under 
the name active labour market policies. These new 
labour  market  policy  concepts  also  forced  a  reo-
rientation  of  unemployment  benefits.  The  main 
ideas  behind  this  development  must  therefore  be 
outlined  below  and  its  impact  on  the  form  taken 
by unemployment benefits pointed out. In light of 
this, it will then also be possible to examine the rel-
evance of this for European coordination law.

Particularly in this regard, the first question must be 
what the old labour market policies looked like and 
what impact they had on the form taken by unem-
ployment benefits. The old way of thinking could be 
labelled  ‘passive  labour  market  policies’ (481).  Occa-
sionally,  the  term ‘passive  unemployment  benefits’ 
is  used (482).  The  old  approach  and  its  realisation  in 
the law in terms of the codification of the precondi-
tions  and  contents  of  unemployment  benefits  are 
characterised by limitation to situations where there 
is  no  employment  relationship  and  the  claimant  is 
available,  which  preconditions  mean  that  benefits 
in  kind  are  automatically  awarded  if  the  insurance 
requirements are met. This statement does not take 
account of the fact that, in the past, too, there were 
supplementary support measures in all the Member 

(

(

481

)  Cf. J. R. Shackleton, ‘Britain’s labor market under the Blair governments’, 

Journal of Labor Research, 2007, 445 (469).

482

)  Cf.,  for  example,  J.  Münder,  ‘Das  SGB  III.  Die  Grundsicherung  für 
Arbeitsuchende’  [The  German  Social  Security  Code  (SGB), Vol.  III  — 
basic social security for job-seekers], Neue Juristische Wochenschrift 
[periodical], 2004, 3209 (3210).

102

Maximilian Fuchs

States  of  the  EU,  albeit  at  differing  intensities,  to 
enable those affected to reintegrate into the labour 
market. There  were  two  decisive  developments  for 
this  change  of  course,  and  they  will  be  described 
below. They are the strategies for European employ-
ment  policy  and  the  formulation  of  a ‘New  Deal’  in 
the labour market in the United Kingdom. 

a.  European employment policy

In the mid-1990s, growing mass unemployment in 
Europe  gave  European  Heads  of  State  or  Govern-
ment cause to put employment policy right at the 
top  of  their  list  of  priorities (483).  These  efforts  cul-
minated in the new Title VIII on employment (Arti-
cles  125–130  EC)  in  the  Treaty  of  Amsterdam (484). 
The laying down of employment policy guidelines 
(Article 128 EC) is of particular significance when it 
comes to discussing this area. Even before the entry 
into  force  of  the  Treaty  of  Amsterdam,  the  Euro-
pean  Council  agreed  the  first  employment  policy 
guidelines in Luxembourg in 1997 (485). Employment 
policy  has  since  been  buttressed  by  four  pillars: 
improving employability, developing entrepreneur-
ship,  encouraging  adaptability  of  businesses  and 
their  employees,  and  strengthening  the  policies 
for  equal  opportunities.  In  2003  there  was  a  revi-
sion  and  rewriting  of  the  guidelines (486).  Guideline 
1 initially discusses active and preventive measures 
for  the  unemployed  and  inactive.  In  the  title,  the 
Member States are called upon to ensure that, at an 
early stage of their unemployment, all job-seekers 
benefit  from  an  early  identification  of  their  needs 
and from services such as advice and guidance, job-
search  assistance  and  personalised  action  plans. 
Based on the above identification, they must offer 
job-seekers  access  to  effective  and  efficient  meas-
ures to enhance their employability and chances of 
integration, with special attention given to people 

483(
) 

484(
) 

In  this  regard,  see  C.  Barnard,  EC  employment  law,  Oxford,  Oxford 
University Press, third edition, 2006, p. 105 et seq.

In this regard see E. Eichenhofer, Geschichte des Sozialstaats in Europa 
[History of the social state in Europe], Munich, C.H. Beck Publishers, 
2007, p. 90 et seq.

485(

)  See OJ C 30, 28.1.1998, p. 1.

486(

)  OJ L 197, 5.8.2003, p. 13.

facing  the  greatest  difficulties  on  the  labour  mar-
ket.  The  Member  States  are  to  ensure  that  every 
unemployed  person  is  offered  assistance  before 
reaching six months of unemployment in the case 
of young people and 12 months of unemployment 
in the case of adults in the form of training, retrain-
ing,  work  training,  a  job  or  other  employability 
measure, combined, where appropriate, with ongo-
ing job-search assistance. The original concept has 
been  updated  via  the  integrated  guidelines  for 
growth  and  employment  (2005–08) (487)  and  the 
new guidelines for the employment policies of the 
Member States.

b.  The new welfare approach in the 

United Kingdom

Following  its  change  of  government  in  1997,  the 
UK  launched  a  fundamentally  new  reform  con-
cept  in  social  policy,  which  was  given  the  title  of 
the New Deal, reminiscent of the reform era of US 
President Franklin D. Roosevelt (488). In the change-
over  to  the  new  policy,  the  striking  thing  is  the 
change  from  the  question  ‘What  money  can  we 
pay  you?’  to  the  question ‘How  can  we  help  you 
become more independent?’ (489).

This journey ‘from welfare to work’ focuses on attach-
ing responsibilities to rights (490). As far as the labour 
market policy component of this new socio-political 
direction is concerned, the main focus is on the active 
role  of  those  previously  provided  with  passive  ben-
efits. This is necessarily reflected in the shaping of the 
conditions for receiving unemployment benefit. This 
can be clearly seen in unemployment benefit that is 

487(

)  COM(2005) 141 final.

488(

)  See A new deal for welfare: Empowering people to work, 1998. For 
the theoretical basis of the new policy, see A. Giddens, The Third Way, 
Oxford, Blackwell Publishers, 1998, p. 99 et seq.

489(

)  A  new  contract  for  welfare:  Principles  into  practice,  DSS,  Cm  4101, 
1998,  p.  9.  Compare,  in  this  regard,  K.  Puttick,  ‘2020:  A  welfare 
odyssey.  A  commentary  on  principles  into  practice  and  the  Reform 
Programme’, Industrial Law Journal, 1999, p. 190 et seq.

490(

)  See A new deal for welfare: Empowering people to work, 1998, iv. ‘Our 
approach has been based on the principle that the best welfare policy 
of all is work and throughout this process of reform we have sought to 
match rights with responsibilities.’

103

50 years of Social Security Coordination 

Past – Present – Future

contribution-independent  and  income-based (491).  In 
comparison with the customary criteria for eligibility 
to draw unemployment benefits, there are now two 
new  crucial  elements:  claimants  must  actively  look 
for  work  and  they  must  have  signed  a ‘job-seeker’s 
agreement’ with the competent authority setting out 
what specific steps are to be taken to get back into 
employment. At the same time, the government set 
up a large number of programmes to accompany this 
process  with  education  and  training  measures  and 
job creation (492).

It  is  significant  that  the  UK  government  placed 
particular  emphasis  on  involving  the  disabled  in 
the  labour  market.  For  that  reason,  it  redesigned 
invalidity  benefit. The  background  to  this  must  be 
regarded  as  being,  above  all,  that  the  number  of 
people receiving this benefit had increased dramati-
cally (from 700 000 in 1970 to 2 700 000 in 1998). The 
most recent stage of development marks the intro-
duction of an ‘employment and support allowance’ 
(ESA)  in  2008 (493).  A  key  precondition  for  receiving 
this benefit is a health condition or disability on the 
part of the claimant that would make it unreason-
able to expect them to work at the time of the claim. 
A work capability assessment is carried out in order 
to determine the potential of the person in question 
to work — even if in a limited capacity. On the basis 
of  that  health  assessment,  a  detailed  interview  is 
held with the applicant in which his/her options are 
worked out. An action plan is then drawn up on the 
basis of the results. If an applicant refuses to partici-
pate in this process, the benefit is stopped. The plan 
is used to come up with different types of education, 
training or an occupation that are applicable. There 
are  two  types  of  ESA:  contributory  and  income-
related allowances, the latter of which is dependent 
on  the  claimant’s  financial  circum stances.  All  com-
parable existing benefits have been abolished (sub-
ject to transitional arrangements).

(

491
) 

Income-based  job-seekers’  allowance,  on  the  details: Wikeley,  Ogus 
and  Barendt’s, The  law  of  social  security,  London,  Butterworth,  fifth 
edition, 2002, p. 336 et seq.

(

(

492

)  On these activities, see Shackleton, ‘Britain’s labor market under the 

Blair governments’, Journal of Labor Research, 2007, 445 (469).

493

)  The Employment and Support Allowance Regulations 2008 (No 794).

C.  Active labour market policy benefits in 

Germany

The  impetus  generated  by  European  employment 
policy,  but  also  quite  fundamentally  by  the  New 
Deal policy launched in the UK, changed the land-
scape of labour market policy throughout Europe, 
albeit differently in different countries (494). The most 
recent  legislation  in  Germany  is  described  below. 
Germany  has  operated  a  consistent  active  labour 
market policy and formed its unemployment ben-
efits  entirely  in  line  with  the  ideas  set  out  above. 
Knowledge of this range of benefits, then, will help 
us formulate the questions and problems that occur, 
and  must  be  solved,  within  the  framework  of  the 
coordination  of  European  social  law. We  are  using 
the German regulations here merely as illustrative 
examples. Where there are comparable regulations 
in other countries, similar problems are faced, and 
the  answers  that  we  need  to  find  must  be  able  to 
be generalised.

Since  the  late  1990s,  Germany  has  been  following 
a clear course in terms of active labour market poli-
cies. The traditional concept of unemployment pro-
tection through transfer benefits was not abolished 
in  the  light  of  a  growing  shortage  of  public  funds 
and  limited  taxation  capacities,  but  it  was  clearly 
rolled  back.  The  ideas  from  the  UK,  referred  to  in 
Germany  as  the  activating  social  state (495),  were 
brought up more and more in the political debate 
and  then  found  their  way  into  the  legislation (496). 
The first visible sign was the reform of the jobs’ pro-
motion law in 1997. All the jobs’ promotion benefits 

(

(

(

494

)  On  the  different  strategies  and  contents  of  active  labour  market 
policies in European countries, see J. Kluwe et al., Active labor market 
policies in Europe. Performance and perspectives, Berlin Heidelberg, 
Springer,  2007;  W.  Eichhorst  and  O.  Kaufmann  (eds),  Bringing  the 
jobless into work? Experiences with activation schemes in Europe and 
the US, Berlin Heidelberg, Springer, 2008.

495

)  On the terminology, see M. Galuske and T. Rietzke, ‘Aktivierung und 
Ausgrenzung.  Aktivierender  Sozialstaat’  [Activation  and  exclusion. 
The  activating  social  state],  in:  R.  Anhorn,  F.  Bettinger  and  J.  Stehr 
(eds),  Sozialer  Ausschluss  und  Soziale  Arbeit  [Social  exclusion  and 
social  work],  Wiesbaden,  Verlag  für  Sozialwissenschaften,  second 
edition, 2008, p. 399.

496

)  See,  on  this  point,  W.  Spellbrink,  ‘Ist  die  Beitragspflicht  in  der 
gesetzlichen Arbeitslosenversicherung verfassungsrechtlich noch zu 
rechtfertigen?’ [Can the obligation to make contributions to statutory 
unemployment  insurance  still  be  justified?],  Juristenzeitung  [legal 
periodical] 2004, p. 538 et seq.

104

Maximilian Fuchs

are listed in Section 3(1) of the German Social Secu-
rity  Code  (SGB),  Volume  III (497).  The  act  specifically 
uses the term active jobs’ promotion benefits. These 
are all jobs’ promotion benefits with the exception 
of  unemployment  benefit,  partial  unemployment 
benefit and insolvency benefit (Section 3(4) of the 
SGB,  Volume  III).  Section  5  of  the  SGB,  Volume  III, 
regulates  active  jobs’  promotion.  Benefits  under 
active  jobs’  promotion  should  be  implemented  in 
such  a  way  that  benefits  that  would  otherwise  be 
necessary to replace wages or salaries in the event 
of  unemployment  are  avoided  on  a  more  than 
temporary  basis  and  the  occurrence  of  long-term 
unemployment can be prevented. With effect from 
1  January  2005,  a  second  jobs’  promotion  system 
has been provided for under German law, known as 
‘basic social security for job-seekers’ and incorporat-
ed in the SGB, Volume II (498). The basic social security 
for job-seekers comprises benefits designed to end 
or  reduce  dependence  on  benefits,  in  particular 
through integration:

•	
•	

into work, and
to protect people’s livelihoods.

Claims  to  these  benefits  are  regulated  under  Sec-
tion 7 of the SGB, Volume II. Claimants must be aged 
15–65 (499), fit for employment, without means and 
ordinarily resident in Germany. This means that the 
benefits  are  non-contributory,  but  their  award  is 
income-  and  means-dependent (500).  It  is  also  nec-
essary  to  fall  back  on  maintenance  claims  under 
certain conditions. The benefits under the SGB, Vol-
ume  II,  are  of  a  subsidiary  nature. Wherever  there 
are legal provisions relating to other social security 
institutions, these take priority. This principle does 
not apply, however — with exceptions — in relation 
to those benefits under the SGB, Volume III. Benefits 

under Volume III cannot, in principle, be granted to 
people as referred to in Volume II.

The  new  system  is  characterised  by  the  principle 
of requirement and promotion (Sections 2 and 14, 
SGB, Volume II). Any persons who are fit for employ-
ment and without means must play an active role in 
all the measures intended to reintegrate them into 
the workforce, and must, in particular, sign an inte-
gration agreement. They must take whatever work 
is offered them on the labour market. Failure to do 
this results in sanctions that extend as far as with-
drawal  of  the  benefit.  The  principle  of  promotion 
means  that  the  competent  social  security  institu-
tion must provide comprehensive assistance to the 
person  without  means  in  order  to  integrate  them 
into the workforce. For this purpose, the competent 
agency  for  work  must  nominate  a  personal  con-
tact  for  each  person  without  means  who  is  capa-
ble of work. The benefits aimed at integration into 
the  workforce  largely  correspond  to  the  measures 
provided  for  under  the  SGB,  Volume  III.  A  benefit 
known as ‘Unemployment benefit II’ is designed to 
act as a benefit in cash to protect a person’s liveli-
hood (501). For a single person, the provision is for a 
monthly payment of EUR 345. This amount can be 
increased, however, under a range of circumstanc-
es, and claimants’ reasonable accommodation costs 
(including heating) are also paid. If a person without 
means  who  is  capable  of  work  claims ‘Unemploy-
ment benefit II’ within two years of ceasing to claim 
unemployment  benefit (502),  he/she  will  receive  a 
monthly  supplement  to  the ‘Unemployment  ben-
efit II’ during this period (503).

It is evident from the description that a twin system 
of jobs’ promotion has arisen in Germany. In basic 
terms,  one  part  of  the  system  is  open  to  employ-
ees who have hitherto been in the labour market, 

(

(

(

(

497

)  Volume III of the German Social Security Code (SGB) is the volume of 

the SGB from which jobs’ promotion takes its basis.

498

)  On this point, see J. Münder, ‘Die Grundsicherung für Arbeitsuchende’ 
[Basic social security for job-seekers], Neue Juristische Wochenschrift 
[periodical], 2004, p. 3209 et seq.

499

)  The upper age limit will be raised along with the raising of the age 

limit for pension insurance.

501(

)  Section 19 of the German Social Security Code (SGB), Vol. II. The term 
‘unemployment  benefit  II’  is  to  be  seen  in  the  context  of  the  basic, 
contributory  unemployment  benefit  (‘unemployment  benefit  I’) 
under Vol. III of the SGB.

502(
) 

I.e. the benefit pursuant to German Social Security Code (SGB), Vol. III.

500

)  On the account to be taken of income and means, see Sections 11 et 

503(

)  For  the  details,  see  Section  24  of  the  German  Social  Security  Code 

seq. of German Social Security Code (SGB), Vol. II.

(SGB), Vol. II.

105

50 years of Social Security Coordination 

Past – Present – Future

and have therefore also paid their contributions to 
unemployment  insurance,  but  have  now  become 
unemployed. Those who do not meet this condition 
(i.e. have not paid enough social security contribu-
tions or have not been in work at all) are subject to 
an income- and means-dependent benefit system.

A differentiation of this nature within jobs’ promo-
tion law is also current in many other EU Member 
States (504).  The  consequences  of  such  differenti-
ated  active  jobs’  promotion  systems  for  the  law 
of European social law coordination will be exam-
ined below.

have been retained, but reinforced. For such areas, 
coordination  operates  in  the  established  ways. 
There are additional unemployment benefits, how-
ever,  that  represent  a  new  picture  in  comparison 
with traditional forms of protection when it comes 
to conditions. These, too, must be incorporated into 
the existing coordination system under Regulation 
(EEC)  No  1408/71,  as  the  old  standards  still  exist, 
while Regulation (EC) No 883/2004, too, has not led 
to any fundamental changes to the body of EU law. 
In  light  of  this,  it  may  make  sense,  below,  to  keep 
the  different  sets  of  benefit  separate  and  to  carry 
out an evaluation in relation to coordination law.

Section  8  of  the  SGB,  Volume  III,  defines  the  term 
‘ability  to  work’  by  saying  that  an  ability  to  work 
does exist, despite illness or disability, if the person 
in question is capable of working for at least three 
hours per day (505). The parallels with developments 
in the United Kingdom are unmistakable. Legislators 
have consciously chosen such a broad definition of 
ability to work in order to facilitate participation in 
integration  benefits  for  everyone  who  is  not  com-
pletely incapacitated, thereby also providing them 
with  the  possibility  of  integration  into  working 
life (506). The notion of labour market integration and 
the broadest possible tapping of working potential 
is thus the main aim of this regulation. 

Iv.  ConSequenCeS For 
CoordInaTIon law

The  revised  concepts  in  labour  market  policy,  the 
development  of  an  active  labour  market  policy, 
have,  as  shown  above,  influenced  unemployment 
benefits  law  quite  considerably.  That  certainly 
does not mean that we must assume a completely 
changed legal backdrop for benefit systems. Many 
structural elements in the national benefit systems 

(

504
) 

In this regard, see the contributions in I. Lødemel and H. Trickey (eds), 
An offer you can’t refuse, Bristol, The Policy Press, 2001.

(

(

505

)  This  time-limit  corresponds  to  that  used  for  the  definition  of  total 

incapacity in pensions’ insurance.

506

)  Cf.  the  explanatory  statement  to  the  Act  of  BT-Druck  [German 

a.  Contributory benefits in cash  

and in kind

This is the classical area, if you will, for unemploy-
ment  benefits.  Under  national  law,  an  entitlement 
is usually attained by being a member of, and thus 
paying  contributions  to,  an  unemployment  insur-
ance  scheme.  The  benefits  in  question,  primarily, 
are  income  replacement  benefits. This  is  the  basis 
of the CJ’s formula, according to which a benefit is 
assigned  to  the  risk  of  unemployment  within  the 
meaning  of  Article  4(1)(g)  of  Regulation  (EEC)  No 
1408/71 if it is designed to replace the pay lost as a 
result of unemployment and is thus meant to pro-
vide the livelihood of the unemployed worker.

The  same  applies  to  benefits  in  kind  and  services. 
This  applies  to  all  conceivable  offers  of  education 
and  training  designed  to  give  the  unemployed 
knowledge and skills to enable them to go back into 
the labour market. As this benefits’ area has expand-
ed considerably in the course of the development 
and acceleration of active labour market policies, it 
is also likely to grow in significance for coordination 
in future. Two problem areas could result from this. 
One  of  these  is  delineating  where  unemployment 
benefits  stop  and  invalidity  benefits (507)  start.  As 
these types of benefit are subject to different coor-
dination  rules  in  relation  to  exportability,  where 

Parliament Publications], 15/5235, p. 4.

(

507

)  Taken as a general term for all forms of incapacity.

106

Maximilian Fuchs

this  line  is  drawn  is  significant.  Since  the  Member 
States — not least having been encouraged to do 
so by the EU’s employment policy guidelines — are 
seeking  to  better  integrate  the  disabled  or  those 
with limited performance capability into the labour 
market, we can expect more benefits to be codified 
that exhibit elements of both invalidity and unem-
ployment  protection.  In  the  Petersen  case,  the  CJ 
provided  methodical  guidance  on  how  to  delimit 
these areas. The formula is as follows: social security 
benefits must be regarded, irrespective of the char-
acteristics  peculiar  to  different  national  legal  sys-
tems, as being of the same kind when their purpose 
and  object  as  well  as  the  basis  on  which  they  are 
calculated and the conditions for granting them are 
identical. On the other hand, characteristics which 
are purely formal must not be considered relevant 
criteria  for  the  classification  of  the  benefits (508).  In 
order to be able to apply these criteria, it must be 
possible — as shown above (509) — to assume a type 
of invalidity benefits for invalidity or unemployment, 
as  appropriate.  This  type  is  based  on  characteris-
tics  that  are  usually  independent  of  country-spe-
cific  peculiarities  in  the  legal  arrangements  in  the 
Member  States.  The  term  invalidity,  which  is  not 
defined  in  Regulation  (EEC)  No  1408/71,  needs  to 
be  determined  in  the  specific  context  of  employ-
ment. Invalidity benefits must thus have a relation 
to ability to work (510). Invalidity can be seen as the 
risk of a permanent or at least long-term reduction 
in, or ending of, the ability to work as a result of an 
impairment  of  physical  or  mental  health,  which  is 
routinely and typically associated with a reduction 
in income requiring compensation (511). Accordingly, 
it is possible to say that an invalidity benefit obtains 
where  the  benefit  in  question  is  a  benefit  in  cash 
that is supposed to compensate for a loss of income 
resulting  from  the  inability  of  the  person  in  ques-
tion  to  earn  income  due  to  his/her  ability  to  work 

(

508

)  Case C-228/07 Petersen [2008] ECR I-6989, para. 21.

(

509
) 

IIA.

(

(

510

)  Cf.  Case  14/72  Heinze  [1972]  1105;  Case  818/79  AOK  Mittelfranken 

[1980] 2729.

511

)  As  defined  by  R.  Schuler  in  M.  Fuchs  (ed.),  Europäisches  Sozialrecht 
[European  social  law],  Baden-Baden,  Nomos,  fourth  edition,  2005, 
preliminary note to Article 37, point 3.

being lost or had restricted, while the amount of the 
benefit is determined according to the usual bases 
of calculation for invalidity benefits. The same kind 
of formula can be applied to unemployment bene-
fits. The benefits in question must be ones that aim 
to  compensate  for  the  loss  of  income  essentially 
resulting from unemployment, in other words from 
the lack of a suitable job for the person in question, 
those that seek to cover the loss of livelihood and 
those benefits that exhibit the typical elements of 
unemployment benefit in terms of conditions and 
calculation.  The  fact  that  the  unemployment  may 
also  be  influenced  by  the  presence  of  a  physically 
or  mentally  restricted  ability  to  work  does  not  in 
itself mean that a benefit takes on the character of 
an unemployment benefit. The crucial thing is that 
the benefit aims to overcome unemployment. From 
the  point  of  view  of  coordination  law,  a  benefit  is 
regarded as an unemployment benefit if it not only 
seeks to compensate for a loss of income (the inva-
lidity  or  incapacity  benefits  also  do  this)  but  also 
pursues the objective of more or less comprehen-
sive  integration  into  the  labour  market.  In  light  of 
this, the objective of active labour market policies 
needs to also be implemented in coordination law. 
Active labour market policy benefits do not seek to 
ignore impairments to the ability to work but they 
do aim to avoid perpetuating such states of affairs 
through passive benefits. Rather, the aim is to fully 
exploit the working potential of the person in ques-
tion with the goal of putting that potential to use 
in the labour market or as part of a similar activity. 
This means that typical elements of the conditions 
for benefits such as availability can be toned down 
or even done without in individual cases, as is the 
case in many countries for the more mature unem-
ployed. The judgments in the De Cuyper and Petersen 
cases should be seen in this light. The crucial thing 
is  that  the  goal  of  labour  market  integration  has 
not  been  abandoned.  Since  active  labour  market 
policy  measures  emphasis  self-initiative  and  per-
sonal responsibility, and since they lay these down 
legally  in  the  form  of  integration  agreements,  the 
component of taking account of the labour market 
can certainly be easily shown.

107

50 years of Social Security Coordination 

Past – Present – Future

The  same  principles  must  apply  when  it  comes  to 
benefits  in  kind  and  services.  If  the  primary  focus 
of  a  measure  is  restoring  the  ability  to  work  by 
improving  the  state  of  health  (a  ‘rehabilitation 
measure’),  the  measure  is  then  regarded  as  an 
invalidity benefit (512). If, on the other hand, despite 
physical disabilities, a measure focuses on acquisi-
tion or improvement of the skills to perform a par-
ticular  activity,  with  the  aim  being  a  very  specific 
effort  relating  to  jobs,  the  measure  in  question  is 
regarded as an unemployment benefit.

There  are  particular  problems  when  it  comes  to 
guidelines relating to support measures (513). Let us 
imagine  that  a  provision  in  Member  State  A  pro-
vides a financial allowance where an affected per-
son  allows  a  suitability  test  to  be  carried  out  and 
successfully completes a training course. After the 
benefit has been granted, the claimant decides not 
to take that specific training course but instead to 
take  a  similar  training  course  in  Member  State  B. 
Should benefits in cash of this nature be subject to 
export  pursuant  to  Article  69  of  Regulation  (EEC) 
No  1408/71? What  happens  if  there  are  no  penal-
ties in place in Member State B in the event of the 
person failing to complete the course? A number of 
questions arise here, especially of an administrative 
nature. Can the Member States restrict award of the 
benefit to people following such courses within that 
state? It is not possible, in this article, to conclusively 
clear up the many questions in this area. However, 
coordination law, too, must take account of the con-
cerns and the particularities of active labour market 
policies. Active labour market policies aim to tie up 
(‘passive’) benefits in cash with the (‘active’) involve-
ment of benefit claimants. This linkage must not be 
put in question by benefit claimants being involved 
in  the  support  measures  of  another  EU  Member 
State whilst retaining the benefit in cash of the first 
state (by exporting the benefit). There is a need to 
ensure that the intentions of the country of origin 

512(
) 

In this regard, see R. Schuler in M. Fuchs (ed.), Europäisches Sozialrecht 
[European  social  law],  Baden-Baden,  Nomos,  fourth  edition,  2005, 
preliminary note to Article 37, point 7.

513(

)  On  this  problem,  see  also Y.  Jorens  and  J.  Hajdú, Tress  —  European 

Report 2007, p. 97 et seq.

and its penalty mechanisms relating to a given sup-
port measure are not rendered ineffective. Whether 
these problems can be solved on an administrative 
basis is uncertain. As long as these problems remain 
unsolved, however, the export of benefits in cash is 
not something that should be endorsed.

The second problem area results from the fact that 
active  labour  market  policies  —  as  demonstrated 
above  —  place  great  emphasis  on  preventative 
measures. This takes us into the problematic mine-
field highlighted by the CJ’s judgment in the Cam-
pana case. If the principles of the said judgment are 
applied,  it  is  determined  that  preventative  meas-
ures,  too,  fall  within  the  scope  of  Article  4(1)(g)  of 
Regulation  (EEC)  No  1408/71.  For  workers  still  in 
some  form  of  employment,  unemployment  ben-
efits can only be of issue where there is a tangible 
risk of becoming unemployed.

Since the Campana case related to a German case, 
German commentators have been particularly pre-
occupied with the issues involved here (514). A con-
siderable  number  of  authors  follow  the  line  taken 
in  the  reference  for  a  preliminary  ruling  from  the 
German  Federal  Social  Court  (BSG),  which  does 
not regard preventative benefits as unemployment 
benefits,  calling  on  the  background  to  the  crea-
tion  of  the  regulation  in  so  doing (515).  The  critical 
objection that what is at issue is a tricky-to-admin-
ister delimitation issue, likewise, should not be dis-
missed out of hand (516). Authors seeking to exclude 
preventative  measures  also  predominantly  bring 
up  the  fact  that  support  measures  of  this  nature 
should  be  regarded  as  an  expression  of  national 
labour  market  and  employment  policy.  In  view  of 
the  decision  of  the  CJ  in  the  Campana  case,  such 
views have no claim to legitimacy. The CJ’s decision 

(

(

(

514

)  U.  Rönsberg,  Die  gemeinschaftsrechtliche  Koordinierung  von 
Leistungen  bei  Arbeitslosigkeit.  Die Verordnung  (EWG)  No  1408/71 
und  ihre  Reformbedürftigkeit  [The  coordination  of  unemployment 
benefits under Community law. Regulation (EEC) No 1408/71 and the 
need for reform], Herbolzheim, Centaurus, 2006, p. 106 et seq. with 
many references to the literature.

515

)  See BSG, 15 October1985 — 11 b/7 RAr 95/84 SGB 1986, 214.

516

)  G. Haverkate and S. Huster, Europäisches Sozialrecht [European social 

law], Baden-Baden, Nomos, 1999, para. 292.

108

Maximilian Fuchs

to be geared towards the tangible risk of unemploy-
ment, however, gives rise to a dramatic reduction in 
the number of cases of application.

b.  Non-contributory benefits

The  most  recent  developments  in  active  labour 
market  policies,  which  have  been  demonstrated, 
for example, through the new forms of benefit and 
benefit  systems  in  the  United  Kingdom  and  Ger-
many, make clear that national labour market poli-
cies are now making greater efforts to cater for the 
large  number  of  unemployed  people  who  do  not 
fall  under  the  protective  umbrella  normally  pro-
vided as a result of being a member of a contribu-
tory unemployment insurance scheme. The simple 
fact  that  a  benefit  is  not  based  on  a  contributory 
payment  does  not,  at  present,  remove  it  from  the 
scope  of  Regulation  (EEC)  No  1408/71,  as  is  made 
plain by Article 4(2) of the said regulation. Since the 
abovementioned  examples  in  the  UK  and  Germa-
ny  are,  however,  simultaneously  benefits  that  are 
income- and means-dependent, there is the prob-
lem of delimitation from social assistance, to which 
the  regulation  does  not  apply,  pursuant  to  Article 
4(4) of Regulation (EEC) No 1408/71. In this regard, 
Article  2(2a)  of  Regulation  (EEC)  No  1408/71  must 
also be taken into consideration, which extends the 
scope to cover special non-contributory cash ben-
efits  provided  under  legislation  which,  because  of 
its personal scope, objectives and/or conditions for 
entitlement,  has  characteristics  both  of  the  social 
security  legislation  referred  to  in  para.  1  and  of 
social  assistance.  Under  para.  2a’s  legal  definition, 
they  must  meet  the  conditions  laid  down  therein, 
which  means  they  must  be  intended  to  provide 
either supplementary, substitute or ancillary cover 
against  the  risk  of  unemployment  and  guarantee 
the  persons  concerned  a  minimum  subsistence 
income or only specific protection for the disabled, 
while  the  financing  must  be  exclusively  derived 
from  compulsory  taxation  and  the  conditions  for 
providing  and  for  calculating  the  benefits  cannot 
be  dependent  on  any  contribution  in  respect  of 
the beneficiary. Furthermore, they must be listed in 

Annex IIa. A glance at Annex IIa gives the impression 
that  the  Member  States  have  tended  to  list  their 
benefits  in  cash  deriving  from  their  active  labour 
market policies (517). In so doing, the Member States 
in  question  have  bindingly  laid  down  that  these 
benefits  must  be  included  in  coordination,  even 
where,  in  individual  cases,  the  benefits  are  strictly 
speaking measures of social assistance (Article 4(4) 
of Regulation (EEC) No 1408/71).

However,  this  leaves  open  the  question  of  how  to 
proceed in respect of benefits in kind and services 
relating to active labour market policies. An example 
of this, once again, would be the support measures 
connected  with  the  basic  social  security  for  job-
seekers under Volume II of the SGB. These benefits 
are only granted if the applicant is a person without 
means,  in  other  words  his/her  income  and  means 
do not exceed a specific threshold and no mainte-
nance  claims  can  be  realised  against  family  mem-
bers. These benefits can therefore only be included 
in coordination if they fall within the scope of Arti-
cle  4(1)(g)  of  Regulation  (EEC)  No  1408/71.  At  this 
point,  we  have  to  fall  back  on  the  case-law  of  the 
CJ. The judgments in the Hoeckx and Acciardi cases 
referred to above are indicative. Taking account of 
other more recent judgments, in the Petersen case 
the  CJ  turned  to  the  settled  case-law  once  again 
and summed it up as follows: ‘according to settled 
case-law, a benefit may be regarded as a social secu-
rity benefit insofar as it is granted to the recipients, 
without  any  individual  and  discretionary  assess-
ment  of  personal  needs,  on  the  basis  of  a  legally 
defined  position  and  relates  to  one  of  the  risks 
expressly  listed  in  Article  4(1)  of  Regulation  (EEC) 
No 1408/71’ (518). The rationale behind the judgment 
in the Hoeckx case was explicitly expounded above. 
The  benefit  under  Belgian  law  in  question  in  that 
case required beneficiaries to prove that they were 
available  for  work. That  made  it  possible  to  affirm 
a  relationship  to  the  risk  of  unemployment.  Since, 

517(

)  On this point see the entries for the benefits in cash described above 

for Germany and the United Kingdom.

518(

)  Case C-228/07 Petersen [2008] ECR I-6989, para. 19, and the judgments 

listed there.

109

50 years of Social Security Coordination 

Past – Present – Future

however, the granting of the benefit was very much 
determined by criteria of need, the CJ rejected the 
argument  that  this  benefit  had  the  character  of  a 
social  assistance  benefit.  Where  the  granting  of  a 
benefit is dependent on an individual case assess-
ment of the personal need of the applicant, which 
is characteristic of social assistance, it does not fall 
within the scope of Article 4(1) of Regulation (EEC) 
No 1408/71 (519).

C.  Coordination exclusion under 

residence law?

Article 24(1) of Directive 2004/38/EC on the right 
of citizens of the Union and their family members 
to  move  and  reside  freely  within  the  territory  of 
Member  States  lays  down  the  principle  of  equal 
treatment,  according  to  which  all  Union  citizens 
residing  on  the  basis  of  the  directive  in  the  terri-
tory  of  the  host  Member  State  must  enjoy  equal 
treatment  with  the  nationals  of  that  Member 
State.  Article  24(2)  of  the  said  directive  provides 
an exception, however. The host Member State is 
not obliged to confer entitlement to social assist-
ance during the first three months of residence, or, 
where appropriate, the longer period provided for 
in Article 14(4)(b), to persons other than workers, 
self-employed  persons,  persons  who  retain  such 
status and their families.

Germany  made  use  of  this  option  when  it  came 
to  benefits  under  its  basic  social  security  for  job-
seekers  (SGB, Volume  II) (520).  Despite  meeting  the 
conditions in general, non-nationals and their fam-
ily members who are in their first three months of 
their  residence  and  non-nationals  whose  right  to 
reside derives solely from their aim of job-seeking 
and  their  family  members  are  excluded  from  the 
entitlement to benefits (521). Under the wording of 

the  legislation,  this  includes  citizens  of  other  EC 
Member States.

There  has  been  a  wide  variation  in  the  literature 
in  answering  the  question  of  whether  this  exclu-
sion  is  effective (522).  One  view  represented  is  that 
Article 24(2), read in conjunction with Article 14(4)  
of  Directive  2004/38/EC,  is  ineffective  due  to 
contravention  of  the  prohibition  on  discrimina-
tion  under  Article  12,  read  in  conjunction  with  
Article 18 EC (523). This argument is particularly based 
on the CJ’s judgment in the Collins case (524). In the 
said judgment the CJ stressed that, in view of the 
establishment of citizenship of the Union, it is no 
longer possible to exclude from the scope of Arti-
cle 39(2) of the Treaty — which expresses the fun-
damental principle of equal treatment, guaranteed 
by Article 6 of the Treaty — a benefit of a financial 
nature  intended  to  facilitate  access  to  employ-
ment in the labour market of a Member State (525). 
This question will certainly be decided by the CJ at 
some point. It should be noted that the Collins judg-
ment was based on the old Directive 68/360/EEC.  
Directive  2004/38/EC  strengthened  the  right  of 
residence of EC citizens considerably. In particular, 
it  severely  restricts  the  possibilities  for  expelling 
people  claiming  social  assistance.  On  the  other 
hand,  under  Article  24  of  Directive  2004/38/EC, 
the legitimate interests of the Member States are 
supposed to be met. On that basis, the restriction 
under Article 24(2) of that directive can be viewed 
as an objectively justified restriction of the right to 
the free movement of workers, as, on this basis, the 
Member States must be granted a legitimate right 
to maintain active labour market policy measures 
financed  from  taxation  income  in  a  financially 

(

522

)  On the differing views see Spellbrink in Eicher and Spellbrink (eds), 
SGB II. Grundsicherung für Arbeitssuchende [German Social Security 
Code  (SGB), Vol.  II  —  basic  social  security  for  job-seekers],  Munich, 
C.H. Beck Publishers, second edition, 2008, Section 7, para. 13 et seq.

(

519

)  Case C-78/91 Hughes [1992] ECR I-4839; Case C-66/92 Acciardi [1993] 

523(
) 

ECR 4567, para. 15.

(

520
) 

In  this  regard,  see  the  Act  implementing  the  European  Union’s 
directives  on  residence  and  asylum  law  of  19  August  2006  (Federal 
Law Gazette I, p. 1970) and the explanatory statement to the Act in 
BT-Druck [German Parliament Publications], 16/5065, p. 234.

(

521

)  See  Section  7(1)(2),  points  1  and  2  of  German  Social  Security  Code 

(SGB), Vol. II.

110

In  this  regard  see  F.  Schreiber,  ‘Die  Bedeutung  des  Gleichbehand-
lungsanspruchs  aus  Article  12  i.V.m.  Article  18  EGV  für  Grund-
sicherungsleistungen  (SGB  II  und  SGB  XII)’  [The  significance  of  the 
equal treatment requirement under Article 12, read in conjunction with 
Article  18,  of  the  EC Treaty  for  basic  social  security  benefits  (German 
Social Security Code (SGB) Vols II and XII)], ZESAR 2006, 423, 430.

(

(

524

)  Case C-138/02 Collins [2004] ECR I-2703.

525

)  Paragraph 63 of the judgment.

Maximilian Fuchs

transparent  and  feasible  framework.  Otherwise, 
such benefits could offer an incentive to move to 
countries with a relatively high level of benefits.

It should be clear, on the other hand, that national leg-
islation based on Article 24(2) of Directive 2004/38/
EC cannot override the rights under Regulation (EEC) 
No  1408/71.  Given  the  principles  of  precedence  in 
Community law, the latter rights must endure. Thus, 
insofar as the basic social security benefits are non-
contributory  cash  benefits  within  the  meaning  of 
Article  4(2a)  of  Regulation  (EEC)  No  1408/71,  they 
cannot be overridden by national legislation. 

v.   Summary

A change occurred in the second half of the 1990s 
in  labour  market  policies  from  a  passive  ben-
efits  strategy  to  an  approach  of  actively  pushing 

people back to work (work fare). These ideas were 
favoured  at  the  European  level  by  the  Europe-
an  Council  as  well  as  in  the  wake  of  the  change 
of  government  in  the  UK. The  old  model  mirrors 
unemployment  benefits  as  cash  benefits,  which 
are  awarded  in  order  to  replace  income  lost  and 
secure maintenance. It is small wonder that the CJ 
used both these elements to define the concept of 
benefits for unemployment within the meaning of 
Article  4  of  Regulation  (EEC)  No  1408/71.  Only  in 
the Campana case did it deal with a specific form 
of  active  labour  market  measure.  As  more  coun-
tries embarked on the road to active labour market 
policies, beside cash benefits benefits in kind grew 
in  importance.  And  very  often  cash  benefits  and 
benefits in kind are linked to each other. This new 
situation  poses  manifold  problems,  problems  of 
qualification of benefits, administrative problems 
and above all the problem of access of foreigners 
to these benefits and their export abroad.

111

50 years of Social Security Coordination 

Past – Present – Future

ThE imPACT OF ARTiCLES 12, 18, 39 ANd 43 
OF ThE  EC TREAT y ON ThE  COORdiNATiON   
OF SOCiAL  SECuRiT y Sy STEmS  (526)

Eleanor Spaventa
Durham University and Durham European Law Institute (UK) 

Dr  Eleanor  Spaventa  is  Reader  in  Law  at  Durham  University  and  Director  of 
the Durham European Law Institute. She previously held positions at Birming-
ham University (2004-06) and at the University of Cambridge (2000-2004). Dr 
Spaventa’s  main  research  interests,  on  which  she  has  published  extensively, 
are  in  free  movement  law;  Union  citizenship;  EC  and  EU  constitutional  law; 
counter-terrorism  in  the  EU;  and  the  third  pillar.  She  is  the  author  of  Free 
movement  of  workers:  Barriers  to  movement  in  their  constitutional  context 
(Kluwer 2007); she has co-edited with Michael Dougan EU and Social Welfare 
(Hart Publishing 2004); and is one of the co-authors of Wyatt and Dashwood’s 
EU law (Sweet and Maxwell 2006). In 2009/10 she will be Professor of Euro-
pean Law at the College of Europe in Natolin. 

I. 

InTroduCTIon 

In this contribution we are going to analyse the way 
the interpretation by the Court of Justice (CJ) of the 
citizenship provisions, and the CJ’s novel reinterpre-
tation  of  the  free  movement  rights,  have  affected 
social security systems, and in particular how they 
relate in a new way with the secondary legislation 
which  coordinates  national  provisions  concerning 
welfare benefits (527).

However,  before  critically  assessing  the  impact  of 
the free movement provisions on the coordination 
of social security systems, and on access of welfare 
benefits more generally, it is first necessary to recall 

(

526
) 

I  am  very  grateful  to Yves  Jorens  and  Michael  Couchier  for  having 
organised  such  a  stimulating  conference  and  to  the  participants  of 
the conference for a lively discussion.

(

527

)  There  is  an  extensive  body  of  literature  on  the  effect  of  Union 
citizenship on welfare provision; e.g. G. de Búrca (ed.) EU law and the 
welfare  state  (OUP,  2005);  M.  Dougan  and  E.  Spaventa  (eds)  Social 
welfare  and  EU  law  (Hart  Publishing,  2005);  A.  Somek  ‘Solidarity 
decomposed:  being  and  time  in  European  citizenship’  (2007), 
European Law Review 787.

the basic principles established by the case-law in 
relation to the free movement rights.

Since  the  1970s,  when  the  free  movement  provi-
sions  became  directly  effective,  the  CJ  has  elabo-
rated a bi-partite test to establish the compatibility 
with Community law of national rules which are not 
directly  discriminatory.  First,  a  national  rule  must 
fall  within  the  scope  of  the  relevant  Treaty  provi-
sion;  and  second,  it  must  be  justified (528).  In  order 
to be justified a rule must pursue a public interest 
compatible  with  Community  law  (and  unless  the 
rule  is  clearly  protectionist  this  will  always  be  the 
case); and it must be necessary and proportionate.

For  practical  purposes,  the  real  test  for  assessing 
compatibility  with  Community  law  once  a  rule  is 
found to fall within the scope of the free movement 
provisions is then the proportionality/necessity test. 
Whilst, in theory, it is for the national court to assess 

528(

)  Consistent case-law, see, for example, Case 33/74 C. H. M. Van Bisbergen v 
Bestuur van de Bedrijsvereniging voor de Metaalnijverheid [1974] ECR 1299. 

112

Eleanor Spaventa

proportionality, the CJ often engages in such exercise. 
Since the assessment of proportionality is a powerful 
tool,  in  that  it  allows  the  judiciary  to  scrutinise  the 
legitimacy of the way policy choices are pursued by 
the legislature, the CJ has been accused of pushing 
its own vision of the internal market at the expenses 
of (more legitimate) political choices exercised by the 
legislative institutions at national and European level. 
This criticism became stronger in the mid-1990s, fol-
lowing a considerable expansion of the definition of 
barrier to movement relevant to bring a factual situa-
tion within the scope of the Treaty (529). As the scope of 
the Treaty expanded, so did the fields in which the CJ 
could scrutinise the proportionality of national rules 
and therefore become the final arbiter as to the legiti-
macy of national regulatory practices which, far from 
being discriminatory, sometimes reflected true politi-
cal choices not only as to the level of regulation in the 
market,  but  also  about  the  way  public  expenditure 
should be organised (530).

The effects of the introduction of Union citizenship, 
which became apparent only in the late 1990s (531), 
determined a further expansion of the scope of the 
Treaty: this time, however, the rules under scrutiny 
were not market rules and indeed many rules con-
cerned access to welfare provision (532); furthermore, 
some of the rules which came under scrutiny were 
the result of the correct implementation of second-
ary Community legislation, and therefore of politi-
cal choices made at the highest level (533). As a result 

529(

)  The  move  towards  non-discriminatory  barrier  case-law  was  first  visible 
in Case C-76/90 M. Säger v Dennemeyer & Co. Ltd [1991] ECR I-4221, in 
relation  to  the  free  movement  of  services;  it  was  then  extended  to  the 
freedom of establishment in Case C-55/94 Gebhard v Consiglio dell’Ordine 
degli Avvocati e Procuratori di Milano [1995] ECR I-4165; and to the free 
movement of workers in Case C-415/93 Union Royal Belge des Sociétés de 
Football Association ASBL v Jean-Marc Bosman [1995] ECR I-4921. 

(

(

(

(

530

)  For example, the case-law on the possibility to claim reimbursement 
for healthcare received abroad, Case C-157/99 B. S. M. Geraets-Smits 
v  Stichting  Ziekenfonds  VGZ  and  Peerbooms  v  Stichting  CZ  Groep 
Zorgverzekeringen [2001] ECR I-5473, and see more detail below.

531

)  Starting from the ruling in Case C-85/96 M. M. Martínez Sala v Freistaat 

Bayern [1998] ECR I-2691.

532

)  For  example,  Case  C-85/96  M.  M.  Martínez  Sala  v  Freistaat  Bayern 
[1998] ECR I-2691; Case C-184/99 R. Grzelczyk v Centre public d’aide 
social d’Ottignies-Louvain-la-Neuve [2001] ECR I-6193.

533

)  For  example,  Case  C-413/99  Baumbast  and  R.  v  Secretary  of  State 
for  the  Home  Department  [2002]  ECR  I-7091,  in  relation  to  the 
requirements to be satisfied by economically inactive citizens in order 
to gain a right of residence; Case C-209/03 Bidar [2005] ECR I-2119, in 
relation to access to maintenance loans; see more detail below. 

of this case-law, the CJ was then accused of ‘welfare 
engineering’,  i.e.  of  attempting  to  create,  single-
handily and with little political backing, a transna-
tional  welfare  space  where  Union  citizens  would 
have to assume some responsibility for the fate of 
their fellow (non-national) Union citizens. This said, 
it  is  open  to  debate  whether  the  case-law  in  the 
last  decade  is  better  conceptualised  as  a  revolu-
tion or as simply an evolution which, even though 
it caught many by surprise, was consistent with the 
deeper  integration  necessary  for  encouraging,  if 
not  all  together  establishing,  an  ever  closer  union 
amongst the peoples of Europe (534).

In  this  contribution  I  am  going  to  look  at  the  rel-
evant  case-law  to  assess  the  impact  of  the  free 
movement and the citizenship provisions on social 
security  coordination  and  access  to  welfare  bene-
fits. In particular, I am going to focus on the tension 
between  the  primary  Treaty  provisions,  as  inter-
preted by the CJ, and secondary legislation (in par-
ticular  Regulation  (EEC)  No  1408/71  and  Directive 
2004/38/EC) (535). I will address these problems the-
matically  rather  than  historically  or  having  regard 
to  the  subject  matter.  Two  main  themes  emerge: 
the  expansion  of  the  scope  of  the Treaty  through 
a  ‘hermeneutic  trick’;  and  the  binary  approach 
adopted by the CJ to expand the rights of individu-
als  without  challenging  the  legality  of  Commu-
nity secondary legislation. Before addressing these 
issues,  it  is,  however,  worth  recalling  briefly  the 
consequences  of  Union  citizenship  insofar  as  the 
application  of  the  principle  of  non-discrimination 
on grounds of nationality is concerned.

534(

)  See preambles to the TEC and TEU. 

535(

)  Council  Regulation  (EEC)  No  1408/71  on  the  application  of  social 
security  schemes  to  employed  persons,  to  self-employed  persons 
ad  to  members  of  their  families  moving  within  the  Community,  as 
amended. Consolidated version [1997] (OJ L 28, 30.1.1997, p. 1;  
http://w w w.europa.e u.i nt /eur-l ex /en/consleg/pdf/1971/
en_1971R1408_do_001.pdf );  Regulation  (EEC)  No  1408/71  will  be 
repealed  once Regulation (EC)  No 883/2004  on  the coordination of 
social security systems [2004] (OJ L 166, 30.4.2004, p. 1), will enter into 
force; Directive 2004/38/EC on the right of citizens of the Union and 
their family members to move and reside freely within the territory 
of the Member States (2004) (OJ L 229, 29.6.2004, p. 35) (hereinafter 
Directive 2004/38/EC).

113

 
50 years of Social Security Coordination 

Past – Present – Future

II.  unIon CITIzenShIP and 
non-dISCrImInaTIon

I  have  recalled  above  that,  in  assessing  the  com-
patibility of national rules with the economic free 
movement  provisions,  the  CJ  adopts  a  bi-partite 
approach: first, analysis of the existence of a bar-
rier  that  brings  the  situation  within  the  scope  of 
the  Treaty;  and,  second,  assessment  of  the  exist-
ence of a public interest capable of justifying the 
rule,  which  includes  the  proportionality  assess-
ment.  Clearly,  the  broader  the  scope  of  the  defi-
nition  of  barrier  to  movement,  the  broader  the 
scope for the CJ’s assessment of the proportional-
ity of national rules. And yet, until the late 1990s, 
the claimant could bring herself within the scope 
of the free movement provisions only after having 
established an economic link (however weak) (536). 
With  the  introduction  of  Union  citizenship,  how-
ever, the economic link is no longer necessary and 
migration  alone  (if  even  needed) (537)  suffices  to 
bring the claimant within the scope of the Treaty 
by  virtue  of  Article  18  EC (538).  Furthermore,  once 
the claimant is within the scope of the Treaty, s/he 
can rely on the general prohibition of discrimina-
tion on grounds of nationality contained in Article 
12  EC (539).  And  the  prohibition  of  nationality  dis-
crimination is interpreted in a broad way so as to 
encompass not only direct discrimination but also 

(

536
) 

In  particular  the  CJ  weakened  the  necessary  economic  link  by 
allowing  service  recipients  (mainly  tourists)  to  rely  on  Article  12  EC 
in relation to anything connected to the reception of tourist services; 
see,  for  example,  Case  186/87  Cowan  v  le Trésor  Public  [1989]  ECR 
195;  Case  C-45/93  Commission  v  Spain  (museum  admission)  [1994] 
ECR I-911. 

537

(

)  See, for example, Case C-148/02 Garcia Avello [2003] ECR I-11613, 
where  the  mere  desire  to  move  in  the  future  was  enough  to 
bring the situation within the scope of the Treaty; Case C-212/06 
Government of the French Community and Walloon Government 
v  Flemish  Government  [2008]  ECR  I-1683,  where  the  notion  of 
potential  discouragement  was  used  in  a  case  which  would  have 
otherwise  been  purely  internal;  and  Case  C-403/03  Schempp 
[2005]  ECR  I-6421,  where  movement  of  the  former  wife  of  the 
claimant was enough to establish the intra-Community link. I have 
argued  elsewhere  in  favour  of  formally  departing  from  the  need 
to  establish  an  intra-Community  link  so  as  to  extend  the  scope 
of  the Treaty  to  cover  also  (some)  purely  internal  situations;  see 
E.  Spaventa ‘Seeing  the  woods  despite  the  trees?  On  the  scope 
of  Union  citizenship  and  its  constitutional  effects’,  (2008)  45, 
Common Market Law Review 13. 

(

(

538

)  For example, Case C-224/98 M. N. D’Hoop v Office national d’emploi 

[2002] ECR I-6191.

539

)  For  example,  Case  C-85/96  M.  M.  Martínez  Sala  v  Freistaat  Bayern 

[1998] ECR I-2691.

indirect discrimination, and in particular discrimi-
nation on grounds of residence or on grounds of 
length  of  residence (540),  as  well  as  discrimination 
on grounds of migration (541).

Clearly, since it is common for entitlement to wel-
fare  provision  to  be  restricted  to  those  residing 
and/or contributing through their economic activ-
ity, and to nationals who need not prove a link of 
‘belonging’ to their own state, the combination of 
Articles  18  and  12  EC  is  to  challenge  established 
requirements in relation to entitlement to welfare 
provision in the territory of another Member State. 
Furthermore,  since  the  prohibition  of  discrimina-
tion  on  grounds  of  nationality  and/or  the  right 
to  movement  have  been  consistently  interpreted 
so  as  to  encompass  the  right  not  to  be  discrimi-
nated on grounds of movement, Article 18 EC also 
strained, if not altogether challenged, the rules as 
to the non-exportability of certain benefits, and in 
particular of special non-contributory benefits (542). 
As we shall see in detail further below, this does not 
mean that Member States are now obliged to grant 
benefits or allow exportability to any Union citizen 
regardless of the circumstances of the case; rather, 
it  means  that  national  rules  providing  for  entitle-
ment requirements are now subject to the scrutiny 
of the Community or/and the national courts as to 
their necessity and proportionality. 

III.  The ProCeSS oF 

deConSTruCTIng and 
reConSTruCTIng The 
SCoPe oF The TreaTy

I  mentioned  above  that  one  of  the  effects  of  the 
introduction of Union citizenship is to sever the link 
between economic activity and entitlement to rights 
under Community law. This is particularly important 

(

(

(

540

)  For  example,  Case  C-192/05 Tas-Hagen  and Tas  [2006]  ECR  I-10451; 

Case C-209/03 Bidar [2005] ECR I-2119. 

541

)  For example, Case C-224/98 M. N. D’Hoop v Office national d’emploi 

[2002] ECR I-6191.

542

)  For example, Case C-192/05 Tas-Hagen and Tas [2006] ECR I-10451.

114

Eleanor Spaventa

in relation to welfare benefits, including benefits fall-
ing within the scope of Regulation (EEC) No 1408/71, 
which  before  were  reserved  to  economically  active 
migrants. The effect of the introduction of Article 18 
EC then is to open up new possibilities for those who 
were  previously  excluded  from  the  scope  of  Com-
munity law because they did not engage in work or 
did not provide or receive services. However, in the 
early stages of interpretation of Article 18 EC, it was 
unclear  what  this  actually  meant.  Thus,  the  Mem-
ber  States  had  a  legitimate  expectation  that  Union 
citizenship  would  simply  codify  the  status  quo  in 
primary Treaty law. In this respect, it should not be 
forgotten  that  prior  to  the  Maastricht  Treaty  three 
directives  were  adopted  granting  movement  and 
residency rights to economically inactive people (543). 
Those directives restricted the rights of residence to 
those  who  were  economically  independent,  who 
would  therefore  not  qualify  for  means-tested  ben-
efits, and who had health insurance in respect of all 
risks. Furthermore, the directives made clear that eco-
nomically independent migrants should not become 
an unreasonable burden on the welfare provision of 
the  host  state (544).  Article  18  EC  in  turn  referred  to 
the  limitations  and  conditions  imposed  by  second-
ary legislation therefore, in the mind of the drafters, 
ring-fencing potential claims on welfare provision in 
the host state. Thus, the provisions and requirements 
contained in the residence directives would consti-
tute the limitations referred to by Article 18 EC and 
therefore  economically  inactive  citizens  would  not 
have a claim on host welfare provision.

However, in Sala (545) the CJ took a different interpre-
tative path from that which could be expected and 
instead engaged in a process of deconstruction and 

(

(

543

)  Council  Directive  90/364/EEC  on  the  right  of  residence  (OJ  L  180, 
13.7.1990,  p.  26);  Council  Directive  90/365/EEC  on  the  right  of 
residence  for  employees  and  self-employed  persons  who  have 
ceased their occupational activity (OJ L 180, 13.9.1990, p. 28); Council 
Directive 93/96/EEC on the right of residence for students (OJ L 317, 
18.12.1993, p. 59).

544

)  Article 1 of Council Directive 90/364/EEC on the right of residence (OJ 
L 180, 13.7.1990, p. 26); Article 1 of Council Directive 90/365/EEC on 
the right of residence for employees and self-employed persons who 
have  ceased  their  occupational  activity  (OJ  L  180,  13.9.1990,  p.  28); 
Article 1 of Council Directive 93/96/EEC on the right of residence for 
students (OJ L 317, 18.12.1993, p. 59).

reconstruction of Community law (546). The case con-
cerned the rights of a Spanish citizen lawfully living 
in Germany by virtue of a bilateral treaty between 
Germany and Spain (i.e. not by virtue of Community 
law). Even though Mrs Sala could not be deported, 
she was not entitled to a residence permit; and pos-
session of a residence permit was a precondition to 
access  some  welfare  benefits,  including  the  child-
raising allowance that Mrs Sala was denied exactly 
because  she  did  not  possess  a  residence  permit. 
The allowance fell within the scope of both Regu-
lations (EEC) Nos 1408/71 (547) and 1612/68 (548); and 
the  residence  permit  requirement  was  discrimina-
tory  since  it  did  not  have  to  be  satisfied  by  Ger-
man  nationals.  Since  there  were  some  doubts  as 
to whether Mrs Sala could be considered a worker 
falling within the scope of either the regulations, or 
indeed of Article 39 EC, the question was whether 
the  situation  fell  nonetheless  within  the  scope  of 
the  Treaty  by  virtue  of  the  citizenship  provisions 
and if so whether Article 12 EC was applicable.

The  CJ  found  that  Mrs  Sala  fell  within  the  scope 
ratione  personae  of  the  Treaty  by  virtue  of  being 
a  Union  citizen;  it  then  found  that  the  benefit  in 
question  fell  within  the  scope  ratione  materiae  of 
the Treaty by virtue of it falling within the scope of 
Regulations (EEC) Nos 1408/71 and 1612/68. Since 
the benefit fell within the scope of Community law 
and since Mrs Sala fell within the personal scope of 
the Treaty, Article 12 EC applied and Mrs Sala was 
entitled to the benefit.

The  Sala  ruling  is  concise  and  therefore  difficult 
to understand: but what is interesting for our pur-
poses is the CJ’s reasoning in relation to what falls 
within  the  material  scope  of  the Treaty.  Such  rea-
soning might appear rather circular, if not altogeth-
er  perverse.  In  this  respect  consider  that  the  fact 
that  child-raising  benefits  fall  within  the  scope  of 

(

546

)  On  the  Sala  ruling  see  S.  O’Leary,  ‘Putting  flesh  on  the  bones  of 
European  Union  citizenship’  (1999),  24  European  Law  Review  68;  J. 
Shaw and S. Fries, ‘Citizenship of the Union: First steps in the European 
Court of Justice’ (1998), 4 EPL 533.

(

547

)  As it was a family benefit falling within Article 4(1)(h). 

545(

)  Case C-85/96 M. M. Martínez Sala v Freistaat Bayern [1998] ECR I-2691.

548(

)  As it was a social advantage falling within the meaning of Article 7(2).

115

50 years of Social Security Coordination 

Past – Present – Future

Community law is not a novelty; however, accord-
ing  to  Community  law  it  is  only  a  given  category 
of people defined in secondary legislation that can 
claim  equal  treatment  for  those  benefits.  In  other 
words,  it  seems  clear  that,  pre-Sala,  the  two  con-
ditions (falling within the personal scope of Regu-
lation  (EEC)  No  1408/71,  of  Regulation  (EEC)  No 
1612/68  or  of  Article  39,  and  within  their  material 
scope) had to be fulfilled simultaneously.

However,  in  Sala,  the  CJ  deconstructs  the  way 
material and personal scope have to be interpret-
ed: as a result, rather than having to meet the two 
conditions in relation to the same piece of legisla-
tion, the two can be separated so that falling with-
in  one  of  the  Treaty  provisions,  and  in  particular 
within  Article  18  EC,  allows  to  claim  equal  treat-
ment  in  relation  to  any  benefit  ever  mentioned 
by  the  Community  legislature,  even  when  the 
clear aim of the legislature is to limit the claimants 
entitled  to  a  given  benefit  and  therefore  exclude 
all  other  claimants  from  the  possibility  to  invoke 
equal treatment.

The  impact  of  Union  citizenship  on  social  securi-
ty  claims  is  then  dramatic  in  that  it  opens  up  the 
potential class of citizens entitled to rely on equal 
treatment in order to obtain welfare provision from 
the host state. And yet, reliance on Articles 18 and 
12 EC rather than on Regulation (EEC) No 1408/71 
is  conceptually  different  and  might  lead  to  differ-
ent  outcomes:  indirect  discrimination  can  be  jus-
tified,  and  therefore  the  rights  granted  through 
Articles 18 and 12 EC appear, at least theoretically, 
more limited than those provided for in Regulation 
(EEC) No 1408/71 where, once a claimant succeeds 
in  bringing  herself  within  both  the  personal  and 
the material scope of the regulation, she might be 
in a much stronger position than if she fell within 
Article 18 EC (549).

This process of deconstruction and reconstruction 
is  evident  in  other  fields  of  Community  law,  and 
most  notably  in  the  field  of  education.  It  might 
be  recalled  that  the  students  directive  excluded 
the migrant student’s entitlement to maintenance 
grants awarded by the host state (550); and that it, as 
the  other  residence  directives,  provides  that  stu-
dents  must  have  adequate  resources  so  as  not  to 
become  a  burden  on  the  social  assistance  of  the 
host state. In a line of case-law that started with the 
ruling in Grzelczyk (551), the CJ applied the Sala rea-
soning to students.

Mr Grzelczyk, a French student in Belgium, claimed 
the  minimex,  a  minimum  subsistence  allowance, 
in order to be able to focus on his studies during 
the last year of his university degree. Mr Grzelczyk 
was denied the benefit since he was not a ‘worker’ 
pursuant  to  Community  law  and  therefore  could 
not  rely  on  Article  7(2)  of  Regulation  (EEC)  No 
1612/68. The CJ found, however, that he fell within 
the scope of Community law by virtue of the citi-
zenship  provisions  and  that,  therefore,  pursuant 
to the Sala ruling, he could claim equal treatment 
in relation to welfare benefits, including the min-
imex.  In  order  to  avoid  the  constraints  imposed 
by  secondary  legislation,  the  CJ  held  that,  whilst 
Directive  93/96/EEC  expressly  excluded  foreign 
students from eligibility to maintenance grants, it 
did  not  exclude  them  explicitly  from  entitlement 
to other welfare benefits.

The ruling in Grzelczyk confirmed the Sala ruling in 
that it clarified that lawfully resident Union citizens 
might rely on Article 12 EC in order to claim wel-
fare benefits regardless of the constraints imposed 
by secondary Community law. However, in Grzelc-
zyk,  the  CJ  also  qualified  the  Sala  ruling,  since  it 
accepted that excessive reliance on the host wel-
fare  system  might  transform  the  citizen  into  an 

549(

)  This will depend very much on what is claimed as in certain instances 
indirect discrimination can be justified also in relation to Regulation 
(EEC) No 1408/71; however, in cases such as exportability of benefits 
or  the  possibility  to  seek  healthcare  abroad,  the  regulation  grants 
‘rights’ and Member States cannot depart from what is established by 
the regulation itself; see discussion below. 

(

(

550

)  Article 3 of Council Directive 93/96/EEC on the right of residence for 

students (OJ L 317, 18.12.1993, p. 59).

551

)  Case C-184/99 R. Grzelczyk v Centre public d’aide social d’Ottignies-

Louvain-la-Neuve [2001] ECR I-6193.

116

Eleanor Spaventa

‘unreasonable burden’ and, should that be the case, 
the Member State would be entitled to terminate 
the right of the Union citizen to reside in its terri-
tory (552). This concession to Member States’ preoc-
cupations  in  relation  to  excessive  claims  on  their 
welfare provision is, however, much more limited 
than  it  might  appear  at  first  sight:  first  of  all,  the 
CJ  does  not  clarify  when  a  citizen  would  become 
an ‘unreasonable burden’ and, given that the prin-
ciple  of  proportionality  always  applies  in  those 
cases,  it  is  clear  that  a  once-off  claim  would  not 
suffice to terminate the citizen’s right of residence 
and  therefore  their  right  to  welfare  provision (553). 
Second, this case-law significantly complicates the 
national administrative framework for eligibility to 
welfare  benefits:  lawfully  resident  Union  citizens 
can  no  longer  be  denied  welfare  benefits  on  the 
sole grounds that they are economically inactive. 
Rather, and as clarified by subsequent case-law (554), 
the  administrative  authorities  must  investigate 
the  claim  to  assess  whether  the  burden  imposed 
on  the  national  welfare  system  is ‘reasonable’  or 
‘unreasonable’, which is to say that the administra-
tive authorities will have to conduct an assessment 
having  regard  to  the  particular  circumstances  of 
the claimant at issue. Finally, the CJ fails to specify 
whether the idea of ‘reasonableness’ in relation to 
the  burden  imposed  on  the  public  purse  is  to  be 
assessed  in  relation  to  the  single  claim,  in  which 
case  it  would  hardly  ever  be  satisfied,  or  in  rela-
tion to the potential cumulative effect of claims by 
several citizens.

The expansive effect of the Union citizenship pro-
visions  is  confirmed  in  subsequent  case-law.  In 
the  case  of  Bidar (555),  a  French  national  who  was 

undergoing  his  university  education  in  the  UK 
claimed a maintenance loan, which was denied on 
the grounds that he was not ‘settled’ in the UK for the 
purposes  of  the  relevant  legislation (556).  It  should 
be  recalled  that  pursuant  to  Directive  93/96/EEC 
foreign  students  are  not  entitled  to  maintenance 
grants  or  maintenance  loans  from  the  host  state. 
However, the CJ found that, since Mr Bidar had resid-
ed in the UK before becoming a university student, 
his right of residence derived not from the students 
directive  but  rather  from  Directive  90/364/EEC,  
the  general  residence  directive. The  latter  did  not 
explicitly  exclude  maintenance  grants.  Further-
more,  the  CJ  found  that  maintenance  grants  fell 
within the scope of Community law following the 
adoption  of  Directive  2004/38/EC  (even  though 
the directive was not in force at the time of the rul-
ing). However, it should be noted that the directive 
excludes  the  right  to  equal  treatment  in  relation 
to  maintenance  grants  for  economically  inactive 
migrants until they have acquired the right to per-
manent  residence (557).  Nonetheless  the  CJ  found 
that  since  such  maintenance  grants  are  available 
for workers and their family members, as well as for 
permanent  residents,  those  grants  fall  within  the 
scope of Community law and therefore, following 
the Sala ruling, Article 12 EC applies.

The  Bidar  ruling  might  have  been  recently  at  least 
partially  overruled (558).  However,  for  our  purposes 
what is interesting is the reasoning underlying it: the 
process of deconstruction and reconstruction is not 
dissimilar  from  that  adopted  in  Sala:  the  exclusion 
of someone from a benefit which is granted only to 
‘some’ citizens does not affect their rights under the 
primary Treaty  provisions.  Furthermore,  a  compari-
son between Grzelczyk and Bidar might be useful to 

(

(

(

(

552

)  Case C-184/99 R. Grzelczyk v Centre public d’aide social d’Ottignies-

Louvain-la-Neuve [2001] ECR I-6193, para. 42.

553

)  This  principle  has  now  been  codified  in  Article  14(3)  of  Directive 

2004/38/EC. 

554

)  For example, see Case C-413/99 Baumbast and R. v Secretary of State 
for  the  Home  Department  [2002]  ECR  I-7091,  although  this  case 
concerned  the  right  to  reside  rather  than  access  to  benefits;  Case 
C-209/03 Bidar [2005] ECR I-2119.

555

)  Case  C-209/03  Bidar  [2005]  ECR  I-2119;  noted  by  C.  Barnard  (2005) 
Common Market Law Review 1465; see also M. Dougan ‘Fees, grants 
and dole cheques: who covers the cost of migrant education within 
the EU?’ (2005), 42 Common Market Law Review 943.

556(

)  According  to  the  English  rules  at  issue,  in  order  to  qualify  for  the 
maintenance loans a person needed to have resided in England for 
at least three years and the residence should not be wholly or in part 
for the purpose of receiving full-time education. Mr Bidar had resided 
in England for three years but he was attending school and therefore 
did not qualify for the loan.

557(

)  Article 24(2) of Directive 2004/38/EC; economically inactive migrants 
gain  full  equal  treatment  rights  after  five  years  of  lawful  residence 
(right to permanent residence). 

558(

)  Case  C-158/07  Förster,  judgment  of  18  November  2008,  not  yet 

published, discussed below.

117

50 years of Social Security Coordination 

Past – Present – Future

fully  appreciate  the  CJ’s  desire  to  use  hermeneutic 
tools in a teleological way, where the telos is the inte-
gration of the citizen not only in the host state but 
also in the host welfare community. Thus, note how 
effectively the CJ plays with secondary legislation to 
achieve  the  desired  result:  Mr  Grzelczyk  is  entitled 
to the minimex because the students directive does 
not explicitly exclude it; and Mr Bidar, also a student, 
can instead rely on the general residence directive to 
avoid the explicit exclusion of entitlement to mainte-
nance grants provided for in the students directive.

The  same  expansive  approach  can  be  found  also 
in  the  case  of  Collins (559).  Mr  Collins  was  an  Irish 
national  who  moved  to  the  UK  to  seek  employ-
ment;  within  a  week  of  his  arrival  he  applied  for  a 
job-seeker’s  allowance. The  allowance  was  refused 
on  the  grounds  that  Mr  Collins  was  not  ‘habitu-
ally  resident’  in  the  UK.  According  to  pre-existent 
case-law,  job-seekers  only  had  a  semi-status  in 
Community  law,  so  that  they  were  not  entitled  to 
rely  on  Article  39(2)  EC  in  relation  to  unemploy-
ment  bene fits (560).  However,  the  CJ  held  that  fol-
lowing the introduction of Union citizenship it was 
no  longer  possible  to  exclude  from  the  scope  of  
Article  39(2)  EC  a  benefit  of  a  financial  nature 
intended to facilitate access to employment in the 
host  state.  Since  the  habitual  residence  require-
ment was indirectly discriminatory, in that it could 
be more easily satisfied by own nationals, it needed 
to  be  justified. The  CJ  acknowledged  that  the  resi-
dence  requirement  pursued  the  legitimate  aim  of 
ensuring that the claimant had established a genu-
ine link with the host employment market. However, 
the principle of proportionality demanded that the 
period  of  residence  necessary  to  establish  such  a 
connection did not exceed what was necessary for 
the authorities to satisfy themselves of the fact that 
the  person  concerned  is  genuinely  seeking  work. 
Once  again  then,  the  CJ  then  requires  Member 
States to have due regard to the particular circum-
stances of the claimant. Furthermore, the CJ’s ruling 

559(

)  Case C-138/02 Collins [2004] ECR I-2703.

560(

)  Case 316/85 Lebon [1987] ECR 2811.

118

is,  again,  at  odds  with  the  provisions  of  second-
ary  legislation.  In  particular,  Directive  2004/38/EC,  
which  had  been  adopted  at  the  time  of  the  ruling 
although  was  not  yet  in  force,  provides  that  job-
seekers are excluded from the equal treatment obli-
gation in relation to welfare provision (561).

The  Union  citizenship  case-law  then  has  a  consid-
erable  impact  on  entitlement  to  welfare  provision 
beyond  what  is  provided  for  in  secondary  legisla-
tion.  And  what  is  particularly  interesting  for  our 
purposes  is  this  process  of  deconstruction  and 
reconstruction  of  the  scope  of  Community  law  so 
as to give effect to the citizenship provisions. As a 
result,  the  care  that  the  legislature  might  take  in 
limiting the class of potential claimants to welfare 
provision is of little consequence, if not altogether 
counter-productive,  to  the  rights  that  citizens  will 
derive from Community law (562). 

Iv.  The bInary aPProaCh

We have seen above that following the introduction 
of Union citizenship the CJ has engaged in a proc-
ess  of  deconstruction  and  reconstruction  of  the 
scope of Community law which has deeply affected 
the obligations that Member States bear in relation 
to  migrant  Union  citizens. We  have  seen  also  that 
this  process  of  reconstruction  takes  as  its  starting 
point both Treaty provisions and secondary legisla-
tion which as a result relate in a novel way so as to 
stretch, if not altogether explode, the requirements 
to be satisfied by Union citizens before being eligi-
ble for welfare provision.

There is, however, another strand of case-law which is 
relevant in analysing the impact of the primary Trea-
ty provisions on the welfare systems of the Member 

(

(

561

)  On  the  issues  raised  by  the  ruling  in  Collins,  see  Advocate  General 
Ruiz-Jarabo  Colomer’s  opinion  in  Joined  Cases  C-22/08  and  23/08 
Vatsouras, opinion delivered 12 March 2009, case still pending at the 
time of writing.

562

)  See  also  M.  Dougan  ‘Expanding  the  frontiers  of  European  Union 
citizenship by dismantling the territorial boundaries of the national 
Member  States?’  in  C.  Barnard  and  O.  Odudu,  The  outer  limits  of 
European Union law (Hart Publishing, 2008), 119. 

Eleanor Spaventa

administered  by  an  institution  in  a  Member  State 
other than that with which the patient was affiliated. 
The  question  did  not  concern  the  prior  authorisa-
tion, which had been granted ex post, but rather the 
level of reimbursement. According to the provisions 
of Regulation (EEC) No 1408/71 the migrant patient 
has a right to receive healthcare in another Member 
State has if she were insured with the latter’s system. 
In the case at issue, reimbursement according to the 
rules  of  the  host  state  was  less  advantageous  than 
reimbursement according to the rules of the Mem-
ber  State  of  provenance.  The  CJ  held  that  Article 
49 EC grants a right to be reimbursed according to 
the  rules  of  the  state  of  provenance:  in  the  case  in 
which a patient falls within both the scope of Reg-
ulation  (EEC)  No  1408/71  and  of  Article  49  EC,  she 
can choose to be reimbursed according to the most 
favourable rules. In the case in which, however, the 
patient  falls  only  within  the  scope  of  Article  49  EC 
since she does not meet the condition provided for 
in the regulation, reimbursement will always be lim-
ited to the tariffs established by the home Member 
State (565). Further, in Peerbooms (566), the CJ held that 
the prior authorisation required by national law to be 
eligible for reimbursement of expenses for medical 
treatment incurred abroad was a barrier falling with-
in the scope of Article 49 EC and needed therefore 
to be justified, even though the prior authorisation 
requirement  is  provided  for  in  Regulation  (EEC)  No 
1408/71. In Müller Fauré (567), the CJ went further and 
held that in the case of non-hospital treatment the 
prior authorisation requirement is incompatible with 
Article 49 EC, even though again the prior authorisa-
tion requirement is provided for in Regulation (EEC) 
No 1408/71; and in Watts the CJ made clear that the 
existence of waiting lists is not a sufficient reason to 
deny authorisation to seek treatment abroad (568).

565(

)  See 

also  Case  C-385/99  Müller 

v  Onderlinge 
Waarborgmaatschappij  OZ  Zorgverzekeringen  UA,  and  van  Riet  v 
Onderlinge  Waarborgmaatschappi  ZAO  Zorgverzekeringen  [2003] 
ECR I-4509.

Fauré 

566(

)  Case  C-157/99  B.  S.  M.  Garaets-Smits  v  Stichting  Ziekenfonds  VGZ 
and Peerbooms v Stichting CZ Groep Zorgverzekeringen [2001] ECR 
I-5473.

567(

)  Case  C-385/99  Müller  Fauré  v  Onderlinge  Waarborgmaatschappij 
OZ  Zorgverzekeringen  UA,  and  van  Riet  v  Onderlinge 
Waarborgmaatschappi ZAO Zorgverzekeringen [2003] ECR I-4509.

States: these are cases in which national rules which 
correctly implemented provisions of secondary legis-
lation were nonetheless found to be incompatible with 
the  primary Treaty  provisions,  at  least  insofar  as  the 
specific case was concerned. Those cases concerned 
access to healthcare provision in a state different from 
the one with which the claimant was insured.

It  might  be  recalled  that  Article  22  of  Regulation 
(EEC)  No  1408/71  provides,  inter  alia,  that  those 
ensured  in  a  Member  State  are  entitled,  prior 
authorisation  of  the  competent  Member  State, 
to  go  to  another  Member  State  to  there  receive 
healthcare  provision.  According  to  the  regulation, 
the  authorisation  might  not  be  refused  when  the 
treatment  is  among  the  benefits  provided  for  by 
the competent Member State; and where the claim-
ant cannot be given such treatment within the time 
normally  necessary  for  obtaining  the  treatment  in 
question having regard to the person’s current state 
of health and the probable course of the disease.

In  a  series  of  cases (563),  the  regime  provided  by  the 
regulation  came  under  strain  as  the  CJ  found  that, 
even  though  the  claimants  did  not  fulfil  the  condi-
tions provided for by national rules correctly giving 
effect  to  Regulation  (EEC)  No  1408/71,  they  were 
still eligible for support under Article 49 EC. In Van-
braekel (564),  the  issue  related  to  hospital  treatment 

563(

)  The healthcare cases have given rise to a lively academic debate; see, 
for example, P. Cabral, ‘Cross-border medical care in Europe: Bringing 
down a first wall’ (1999) 24 European Law Review 387; A. P. Van der Mei, 
‘Cross-border access to medical care in the European Union — Some 
reflections  on  the  judgments  in  Decker  and  Kohll’  (1998),  5  MJ  277; 
M.  Fuchs ‘Free  movement  of  services  and  social  services:  Quo  vadis?’ 
(2002),  8  European  Law  Journal  536;  E.  Steyger ‘National  health  care 
systems under fire (but not too heavily)’ (1999) 29 LIEI 97; A. P. Van der 
Mei. ‘Cross-border  access  to  medical  care  in  the  European  Union  — 
Some  reflections  on  Garaets-Smits  and  Peerbooms  and  Vanbraekel’ 
(2002), 9 MJ 189; G. Davies ‘Welfare as a service’ (2002), 29 LIEI 27; and 
V.  Hatzopoulos  ‘Killing  the  national  health  systems  but  healing  the 
patients? The  European  market  for  healthcare  after  the  judgment  of 
the ECJ in Vanbraekel and Peerbooms’ (2002), 39 Common Market Law 
Review 683; E. Spaventa ‘Public services and European law: Looking for 
boundaries’ (2002–03), 5 CYELS 271; T. Hervey ‘Mapping the contours 
of European Union health law and policy’ (2002), 8 EPL 69; A. Dawes 
‘Bonjour Herr Doctor: National healthcare systems, the internal market 
and cross-border medical care within the European Union’ (2006), 33 
LIEI  167;  G.  Davies ‘Competition,  free  movement  and  consumers  of 
public  services’  (2006),  17  EBL  Rev.  95;  C.  Newdick ‘Citizenship,  free 
movement and health care: Cementing individual rights by corroding 
social solidarity’ (2006), 43 Common Market Law Review 1645. 

(

564

)  Case C-368/98 Abdon Vanbreakel and Others v Alliance nationale des 

mutualités chrétiennes [2001] ECR I-5363.

568(

)  Case C-372/04 Watts [2006] ECR I-4325.

119

50 years of Social Security Coordination 

Past – Present – Future

abroad  pursuant  to  Regulation  (EEC)  No  1408/71 
(and probably in relation to many if not all of the 
rights granted by the regulation): if the patient is 
granted  prior  authorisation,  or  s/he  satisfies  the 
requirements  for  prior  authorisation,  then  s/he 
has a right to travel to another Member State and 
receive benefits in kind as if s/he were insured in 
that Member State. However, if the citizen fails to 
satisfy  the  black-letter  requirements  imposed  by 
Community  secondary  legislation,  be  that  Direc-
tive  2004/38/EC  or  Regulation  (EEC)  No  1408/71, 
then s/he might have a right in primary legislation 
which is at the same time more limited and more 
extensive than that granted by secondary legisla-
tion.  It  is  more  extensive  because  it  clearly  goes 
beyond  what  is  provided  in  secondary  law;  but 
it  is  also  more  limited  since  it  will  depend  on  an 
appraisal of the factual circumstances at stake and 
on whether denial of the right is a justified and pro-
portionate response by the Member State. The fact 
that now we have to see secondary legislation and 
primary Treaty provisions as constituting, respec-
tively, the floor and the ceiling of the rights grant-
ed in Community law was indirectly confirmed by 
the  abovementioned  ruling  in  Vanbrekael,  where 
the CJ held that, when the patient falls within the 
scope  of  Regulation  (EEC)  No  1408/71,  she  can 
choose between the level of reimbursement pro-
vided by the latter (i.e. that provided by the host 
state) and that provided by Article 49 EC (i.e. that 
provided by the state of origin).

The binary approach established through the case-
law,  however  shocking  for  the  Member  States, 
unwilling to see new obligations imposed on pub-
lic finances, especially when those result from what 
could  be  perceived  as  the  bypassing  of  carefully 
reached political compromises, can be considered 
a  development  of  established  principles  in  rela-
tion to the free movement of persons. Here, since 
the  1970s,  the  CJ  has  made  clear  that  rights  that 

In all those cases, the CJ did not question the fact 
that  those  national  rules  were  compatible  with 
the  regime  established  by  Regulation  (EEC)  No 
1408/71;  nor  did  it  question  the  regime  estab-
lished  by  the  regulation  itself;  and  yet,  it  found 
the national rules at issue to be incompatible with 
Article 49 EC. The question is then how to reconcile 
the compatibility of the regime introduced by the 
regulation,  which  provides  for  the  prior  authori-
sation  requirement,  with  the  case-law  of  the  CJ. 
After  all,  if  the  prior  authorisation  requirement 
is  a  hindrance  to  movement  which  is  caught  by 
Article 49 EC and needs to be justified, and which 
is  in  certain  cases  incompatible  with  Community 
law,  then  Article  22(1)(c)  of  Regulation  (EEC)  No 
1408/71,  which  provides  for  said  prior  authorisa-
tion,  should  also  be  deemed  incompatible  with 
the primary Treaty provisions (569).

This  discrepancy,  which  arises  in  a  similar  way  in 
relation to the requirements to be satisfied in order 
to  be  eligible  for  residency  rights  in  the  citizen-
ship context, is therefore difficult to explain. In the 
wake of the Baumbast ruling (570), Michael Dougan 
and  I  argued  that  the  CJ  has  introduced  a  cleav-
age approach to the interpretation of the relation-
ship between primary and secondary legislation in 
relation  to  Union  citizenship (571). Thus,  the  black-
letter rights provided by the then three residence 
directives, and now by Directive 2004/38/EC, con-
stitute the floor of rights granted to Union citizens. 
If the citizen satisfies those requirements then she 
is  automatically  entitled  to  the  right  to  reside. 
That is true also in relation to healthcare provision 

(

569

)  The Commission has put forward a proposal for a directive codifying 
the case-law on healthcare provision; see proposal for a directive on 
the application of patients’ rights (2008) (COM(414) final); the proposal 
was  approved  with  amendments  by  the  European  Parliament  on 
23 April 2009.

(

570

)  See Case C-413/99 Baumbast and R. v Secretary of State for the Home 

Department [2002] ECR I-7091.

571(

)  M.  Dougan  and  E.  Spaventa,  ‘Educating  Rudy  and  the  (non-)English 
patient:  A  double-bill  on  residency  rights  under  Article18  EC’  (2003), 
28  European  Law  Review  699;  see  also  M.  Dougan ‘The  constitutional 
dimension to the case-law on Union citizenship’ (2006), 31 European Law 
Review 613; and E. Spaventa, Free movement of persons in the European 
Union — Barriers to movement in their constitutional context (Kluwer 
Law International 2007), especially Chapters 6 and 7; and E. Spaventa, 
‘Seeing the woods despite the trees? On the scope of Union citizenship 
and its constitutional effects’ (2008), 45 Common Market Law Review 13.

120

Eleanor Spaventa

derive  directly  from  the Treaty  can  be  clarified  by 
secondary  law,  but  are  not  per  se ‘established’  by 
such  case-law (572).  Seen  in  this  light,  the  case-law 
might  appear  less  surprising:  after  all,  the  CJ  has 
always  considered  that  limits  imposed  in  second-
ary legislation are not necessarily conclusive: they 
might  be  legitimate  per  se,  since  they  would  sat-
isfy  what  is  perceived  to  be  a  legitimate  public 
interest  by  the  political  institutions,  and  yet  they 
cannot  impinge  on  the  interpretation  given  by 
the  CJ  to  the  primary Treaty  provisions  (although 
they might well drive it). It is for the latter alone to 
decide the boundaries of the rights granted by the 
Treaty:  secondary  legislation  simply  gives  effect 
to  those  rights.  And  naturally,  the  content  of  the 
Treaty provisions, like that of constitutional rights, 
evolve with time, whilst black-letter provisions are 
less  dynamic  in  nature. The  binary  approach  thus 
makes perfect constitutional sense albeit it might 
ruffle some political feathers. 

v.  The exPorTabIlITy 

oF beneFITS beyond 
regulaTIon (eeC) no 
1408/71

The binary approach adopted in relation to second-
ary  legislation  on  the  one  hand,  and Treaty  rights 
on  the  other,  has  important  repercussions  in  rela-
tion to the right to export benefits beyond the pro-
visions  of  Regulation  (EEC)  No  1408/71.  Here,  the 
combination of the right to free movement granted 
by  Article  18  EC  and  the  interpretation  technique 
adopted by the CJ (both the binary approach and 
the  Sala  approach)  challenge  residence  require-
ments  in  relation  to  benefits  covered  by  Regula-
tion  (EEC)  No  1408/71  even  when  such  residence 
requirements  would  in  themselves  be  compatible 
with the regulation. Thus, once again, the fact that 
a restriction is consistent with the regime provided 

for by secondary legislation is not conclusive as to 
its compatibility with Community law.

In  De  Cuyper  the  issue  related  to  a  residence 
requirement  in  relation  to  an  unemployment 
allowance (573). Mr De Cuyper received such a ben-
efit  from  Belgium,  and  because  he  was  above  50 
years of age he was exempted from the obligation 
to submit to the local control procedures. Howev-
er, the benefit was still conditional upon residence 
in  the  Belgian  territory:  following  an  inspection, 
the  authorities  found  that  Mr  De  Cuyper  was  liv-
ing  in  France  and  therefore  terminated  the  ben-
efit and asked for repayment of the sums that had 
been granted whilst Mr De Cuyper was resident in 
France.  Mr  De  Cuyper  argued  that  the  residence 
requirement was a restriction on his right to move 
and reside anywhere in the EU granted by Article 
18 EC. The CJ found that the benefit in question was 
indeed an unemployment benefit which according 
to  the  provisions  of  Regulation  (EEC)  No  1408/71 
could be made conditional upon residence in the 
territory  of  the  state  awarding  the  benefit (574). 
However, the CJ also found that since a residence 
requirement was a restriction to the rights granted 
to European citizens to move and reside anywhere 
in the Union, it fell within the scope of Article 18 EC  
even  though  it  was  allowed  under  Regulation 
(EEC) No 1408/71. For this reason, the requirement 
needed  to  be  justified,  i.e.  pursue  a  legitimate 
interest  and  be  proportionate  and  necessary  for 
its achievement. In the case at issue, the residence 
requirement  was  justified  since  the  authorities 
needed to be able to monitor compliance with the 
legal requirements upon which the granting of the 
benefit was conditional (575).

573(

)  Case  C-406/04  De  Cuyper  [2006]  ECR  I-6947;  see  also  M.  Cousins 
‘Citizenship,  residence  and  social  security’  (2007),  European  Law 
Review 386.

574(

)  See the conditions contained in Article 69(1) of Regulation (EEC) No 

1408/71. 

(

572

)  For example, interpretation of the public policy derogation; or the fact 
that documents required by secondary legislation are mere evidence 
of the right at issue and are not constitutive of them; see, for example, 
Case  C-459/99  Mouvement  contre  le  racisme,  l’antisémitisme  et  la 
xénophobie (MRAX) ASBL v Belgium [2002] ECR I-6591. 

575(

)  See also Case C-228/07 Petersen [2008] ECR I-6989, where the CJ held 
that a residence requirement in relation to an unemployment benefit 
was a restriction to the free movement of workers (as it was applied 
to a migrant worker who transferred his residence back to his home 
state) and, in the case at issue, was not justified. 

121

50 years of Social Security Coordination 

Past – Present – Future

The fact that the residence requirement was justi-
fied in this case should not detract attention from 
the significance of the ruling. As seen already in the 
healthcare cases, as well as in the other citizenship 
cases,  the  fact  that  secondary  legislation  author-
ises  a  conduct  on  the  part  of  the  Member  State 
no longer shelters the national rules from further 
scrutiny: thus, whether the residence requirement 
in relation to non-contributory benefits is going to 
be justified will depend very much on the facts of 
the case at issue. Furthermore, this case-law is not 
without its practical problems: authorities dealing 
with social security claims have already a consid-
erable job in checking eligibility for the benefits at 
issue, as well as policing against the risk of benefit 
fraud. The case-law of the CJ introduces a new lev-
el of complexity since the rules now not only have 
to be proportionate in the abstract, they also have 
to be proportionate having regard to the specific 
facts of the case at issue. This is well illustrated by 
the case of Hendrix (576). There the issue related to 
a  benefit  for  disabled  young  people. The  benefit 
supplemented  the  income  that  the  disabled  per-
son would obtain from working at a reduced rate 
under  a  Dutch  government  scheme.  Mr  Hendrix 
received the benefit until he moved his residence 
from the Netherlands to Belgium when, as a result 
of the change of place of residence, he was denied 
the benefit.

For the purposes of Regulation (EEC) No 1408/71, 
the  CJ  classified  the  benefit  as  a  special  non-
contributory  benefit  which  could  therefore  be 
legitimately  reserved  to  those  resident  in  the 
national  territory (577). The  CJ,  however,  also  found 
that  Mr  Hendrix  should  be  classified  as  a  migrant 
worker falling within the scope of Regulation (EEC)  
No 1612/68 and Article 39 EC. Further, the CJ held 
that  the  benefit  in  question  could  be  qualified  as 
a  ‘social  advantage’;  it  then  acknowledged  that 

Regulation  (EEC)  No  1612/68  explicitly  provides 
that  it  does  not  affect  rules  adopted  pursuant  to  
Article 42, including Regulation (EEC) No 1408/71. 
However, the CJ also stated that Article 7(2) of Regu-
lation (EEC) No 1612/68 is the specific expression of 
the principle of equality contained in Article 39(2) EC,  
and should therefore be given the same meaning. 
As a result, the residence requirement needed to be 
justified,  and  be  proportionate  to  the  attainment 
of the aim sought. The CJ then found that, whilst a 
residence requirement would be in principle justi-
fied, its proportionality in the case at issue needed 
to  be  assessed  by  the  national  court.  Thus,  since 
according to Dutch law the residence requirement 
could  be  waived  if  it  would  give  rise  to  an ‘unac-
ceptable  degree  of  unfairness’,  the  CJ  instructed 
the national court to interpret the legislation in the 
light  of  Community  law,  and  in  particular  having 
regard to the fact that Mr Hendrix had exercised his 
Article 39 EC rights, and that he had retained a link 
with the Netherlands (578).

The  binary  approach  according  to  which  the 
regime established in secondary legislation is not 
conclusive even when such a regime is compatible 
with the Treaty deeply affects the non-exportabil-
ity  of  benefits. Thus,  if  a  benefit  can  be  exported 
according to the regime established by Regulation 
(EEC) No 1408/71, exportability will be a matter of 
right. However, in those instances where the bene-
fit is not one for which exportability is provided for 
in  secondary  legislation,  the  claimant  falls  in  any 
case within the scope of Community law and it is 
for the Member State to justify the restriction. Fur-
thermore, and whilst in relation to those benefits 
which require the authorities to be ale to carry out 
checks,  the  residence  requirement  will  be  more 
easily justified, and the authorities might have to 
take into consideration the factual circumstances 
pertinent to the claimant. 

(

(

576

)  Case C-287/05 Hendrix [2007] ECR I-6909.

577

)  Cf. Article 10(a)1 of Regulation (EEC) No 1408/71, and para. 38 of 

the ruling.

578

(

)  On  the  notion  of  real  link  see  C.  O’Brien,  ‘Real  links,  abstract 
rights and false alarms: The relationship between the ECJ’s “real 
links”  case-law  and  national  solidarity’  (2008),  33  European  Law 
Review 643. 

122

Eleanor Spaventa

vI. 

ImPaCT oF unIon 
CITIzenShIP on beneFITS 
PrevIouSly exCluded 
From CommunITy law

The introduction of Union citizenship has also had 
a  pervasive  effect  in  relation  to  the  possibility  to 
export  benefits  which  previously  fell  altogether 
outside  the  scope  of  Community  law,  such  as,  for 
instance, pensions connected to war which accord-
ing  to  consistent  case-law  fell,  pre-citizenship (579), 
altogether outside the scope of the Treaty.

Here, one should take care to properly understand 
the  reasoning  behind  the  case-law:  it  is  not  that 
those  benefits  now  fall  within  the  scope  of  Com-
munity law per se; rather it is that any restriction 
on  the  freedom  to  move  and  reside  in  another 
Member  State  falls  within  the  scope  of  Article  18 
EC. This distinction is of paramount importance in 
relation to the application of the principle of equal 
treatment:  since  such  benefits  do  not  fall  within 
the scope of Community law per se, a non-national 
would not be able to claim such benefits. However, 
a  beneficiary  who  is  entitled,  under  national  law, 
to claim, for instance, a pension for civilian victims 
of  war,  or  a  war  pension  of  sorts,  might  have  the 
right to transfer her residence to another Member 
State without for this reason losing the right to the 
benefit in question. Otherwise, the right to move 
would  be  severely  affected:  if  the  pension  or  the 
benefit constitutes the main source of income for 
the claimant, s/he would be unable to exercise her 
right to move in Community law for fear of losing 
that benefit.

Thus, for instance, in Nerkowska (580), Ms  Nerkows-
ka  was  a  Polish  citizen  who  during  the  war  had 
been deported to Russia and, as well as losing her 
parents,  suffered  from  lasting  health  problem  as 

a  result  of  her  deportation.  Under  Polish  law  she 
was therefore entitled to a pension; however, such 
a  benefit  was  conditional  upon  her  residing  in 
Poland, whilst Ms Nerkowska resided in Germany. 
The CJ found that the residence requirement was 
a disproportionate interference with Ms Nerkows-
ka’s  right  to  move.  On  the  one  hand,  if  the  resi-
dence requirement was aimed at ensuring that the 
claimant had sufficient connection with the terri-
tory of the state awarding the benefit, then it was 
disproportionate since Ms Nerkowska was a Polish 
national  who  had  resided  and  worked  in  Poland 
for 20 years and therefore had established a suffi-
cient connection with Polish society. On the other 
hand, if the national authorities needed to subject 
her to some health or administrative checks they 
could simply demand that she return to Poland on 
an  ad  hoc  basis.  The  residence  requirement  was 
therefore disproportionate.

As  mentioned  above  the  effect  of  this  case-law 
is  not  to  broaden  the  scope  of  Community  law 
to  incorporate  benefits  which  were  previously 
excluded: rather it is to limit the extent to which 
the  Member  States  can  indirectly  restrict  move-
ment  by  demanding  that  the  beneficiary  reside 
within  the  national  territory.  The  distinction  is 
important since, if the benefit were to fall within 
the  material  scope  of  the  Treaty,  then  Member 
States  would  have  to  justify  denial  of  benefits, 
which  are  clearly  linked  to  nationality,  to  non-
nationals.  This  was  confirmed  by  the  CJ  in  the 
case  of  Baldinger (581),  where  the  CJ  held  that 
a  war-related  benefit  fell  outside  the  scope  of 
Community  law  (in  that  case  Regulation  (EEC) 
No 1612/68 and Article 39(2)). However, any resi-
dence  requirement  imposed  by  a  Member  State 
as a condition for eligibility for benefits now falls 
within the scope of Article 18 EC and needs there-
fore to be justified. 

(

579

)  For  example,  Case  207/78  Even  [1979]  ECR  2019;  Case  C-315/94  de 

Vos [1996] ECR I-1417.

580(

)  Case C-499/06 Nerkowska [2008] ECR I-3993; see also Case C-192/05 Tas-
Hagen and Tas [2006] ECR I-10451; and Case C-221/07 Krystyna Zablocka-
Weyhermüller, judgment of 12 December 2008, not yet published.

581(

)  Case C-386/02 Baldinger [2004] ECR I-8411.

123

50 years of Social Security Coordination 

Past – Present – Future

vII.  The rulIng In FöRStER and 
The ImPaCT oF dIreCTIve 
2004/38/eC

A  more  general  question,  which  can  be  answered 
only  in  a  speculative  way,  is  whether  Directive 
2004/38/EC will have any impact on the case-law of 
the CJ. On the one hand, the directive codifies most 
of  the  case-law  on  citizenship  and  the  free  move-
ment of persons existing at the time of its drafting. In 
this respect, the directive clearly incorporates both 
the principle of proportionality and the incremen-
tal  approach  to  rights  in  respect  of  welfare  provi-
sions (582). Thus, whilst the requirements of sufficient 
resources and comprehensive health insurance for 
economically  inactive  citizens  residing  in  the  host 
state beyond three moths have been confirmed (583), 
the directive also makes clear that recourse to the 
social assistance of the host state cannot automati-
cally  determine  the  expulsion  of  the  citizen (584). 
Furthermore,  the  directive  provides  for  a  right  to 
permanent  residency  which  is  acquired  after  five 
years of lawful residency in the host state (585). Once 
a citizen has become a permanent resident, s/he is 
entitled to equal treatment regardless of economic 
activity.  The  directive  thus  somehow  codifies  the 
idea  of  a ‘real  link’  by  establishing  that  such  a  link 
will be presumed after the citizen has resided in the 
host country for five years.

On  the  other  hand,  the  provisions  of  the  directive 
appear more restrictive than the case-law analysed 
above.  In  particular,  pursuant  to  Article  24(2)  eco-
nomically inactive citizens, as well as job-seekers, do 
not have a right to social assistance in the first three 
months  of  residence  or  longer  if  the  job-seeker 
stays beyond three months. And economically inac-
tive citizens are not entitled to maintenance aids for 
students, including maintenance loans, until when 

(

(

(

(

582

)  See  also  Barnard, ‘Annotation  on  Bidar’  (2005),  42  Common  Market 
Law Review 1465, who talks about a ‘quantitative approach’ to equal 
treatment  (at  p.  1468);  and  by  the  same  author, ‘EU  citizenship  and 
the principle of solidarity’ in M. Dougan and E. Spaventa (eds), Social 
welfare and EU law (Hart Publishing, 2005), Chapter 8.

583

)  See Article 7(1)(b) of Directive 2004/38/EC.

584

)  See Article 14(3) of Directive 2004/38/EC.

585

)  See Article 16 of Directive 2004/38/EC.

124

they  acquire  permanent  residency.  As  mentioned 
above,  these  provisions  appear  inconsistent  with 
the CJ’s approach in both Collins and Bidar. It might 
be  recalled  that  in  Collins  the  CJ  held  that,  whilst 
a  residence  requirement  for  entitlement  to  a  job-
seeker’s  allowance  is  justified,  it  must  be  limited 
to a length of time sufficient for the authorities to 
ascertain that the job-seeker has a real connection 
with the host employment market (586). Article 24(2), 
however, excludes any entitlement to social assist-
ance for those who are looking for a job. Similarly, 
in  Bidar  the  CJ  held  that  a  student  might  be  eligi-
ble  for  a  maintenance  loan  if  s/he  has  established 
a  genuine  link  with  the  host  state (587).  In  the  case 
at  issue,  Mr  Bidar  had  resided  in  the  United  King-
dom for three years, well short of the five years now 
required  by  Directive  2004/38/EC. The  question  is 
therefore  whether  the  CJ  will  be  willing  to  revisit 
its previous case-law; or whether it will continue to 
adopt  a  binary  approach  to  secondary  legislation 
so that if a citizen satisfies the conditions contained 
in  Directive  2004/38/EC  s/he  will  be  automatically 
entitled to the rights therein granted; whilst if s/he 
does not the proportionality principle applies and 
entitlement will depend very much on the facts of 
the case at issue.

In  the  writer’s  opinion  the  answer  is  mixed  and  in 
trying to foresee how the case-law might develop 
we should recall not only the constitutional princi-
ples  developed  by  the  CJ,  but  the  reason  for  their 
development.  In  other  words,  we  should  distin-
guish between the constitutional principles ‘proper’ 
elaborated by the CJ in relation to Union citizenship, 
which should continue to apply, and those cases in 
which the end result was very much driven by the 
particular  circumstances  of  the  case,  and  that  are 
unlikely to be of more general application. Starting 
from the latter, a useful, if confused, indication as to 

(

(

586

)  Case C-138/02 Collins [2004] ECR I-2703.

587

)  Case C-209/03 Bidar [2005] ECR I-2119.

Eleanor Spaventa

the  possible  future  developments  of  the  case-law 
comes from the recent ruling in Förster (588).

There,  Ms  Förster,  a  German  citizen,  went  to  the 
Netherlands in order to study and train as a teacher. 
During the course of her studies she was engaged 
in  various  jobs  and  received  a  maintenance  grant 
as a worker. However, following an inspection, the 
awarding body found that she had not been work-
ing  for  a  period  of  about  six  months  and  claimed 
repayment of the maintenance grant for the period 
in which she was not economically active. Accord-
ing  to  Dutch  rules,  economically  inactive  citizens 
qualified  for  maintenance  grants  only  after  five 
years  of  residence  whilst  at  the  time  in  which  she 
was not employed Ms Förster had been residing in 
the Netherlands for little over three years. Ms Förster 
claimed that the Bidar ruling applied to her and that 
she should be entitled to equal treatment since she 
had  demonstrated  a  sufficient  link  with  the  host 
country. It should also be noted that, after comple-
tion  of  her  degree,  Ms  Förster  found  employment 
and therefore remained in the Netherlands.

The  CJ  found  that  the  five-year  residence  require-
ment  was  justified  and  that  it  did  not  go  beyond 
what is necessary to ensure that the Union citizen 
is integrated in the society of the host state. The CJ 
distinguished  the  case  at  issue  from  the  ruling  in 
Bidar, by relying on the fact that the British rules in 
the  latter  made  it  impossible  for  students  to  ever 
qualify  for  maintenance  grants,  since  periods  of 
residence  for  study  purposes  were  not  taken  into 
consideration  to  establish  length  of  residence.  On 
the other hand, in Förster the reason why someone 
had resided in the Netherlands was immaterial for 
establishing the required length of residence.

The  significance  of  the  ruling  in  Förster  might  go 
well  beyond  the  case  of  maintenance  grants  and 
raises  questions  as  to  how  much  of  the  case-law 
on  citizenship,  and  possibly  also  on  healthcare 
services, will survive. In this respect, in the writer’s 

opinion,  the  most  important  shift  consists  in  the 
return to an abstract analysis of the rules at issue, 
rather  than  the  assessment  of  the  proportional-
ity of the application of the rules to the facts of a 
particular  case.  The  case-law  before  Förster  was 
heavily centred on the individual claimant, with all 
the problems that this might create for the admin-
istrative  authorities,  but  with  a  real  attention  for 
the  proportionality  of  the  state’s  response  to  that 
individual  case. Thus,  the  notion  of ‘real  link’  that 
justified  claims  on  the  host  welfare  society  was 
assessed having regard to the individual case and 
seemed aimed at distinguishing ‘good claimants’ — 
those  in  temporary  difficulties  (Grzelczyk),  those 
who  were  truly  in  exceptional  circumstances  and 
were not trying to unduly exploit the generosity of 
the host society (Bidar), those who were bona fide 
claimants (Sala, Collins) — from ‘bad claimants’, i.e. 
benefit tourists. On the other hand, in Förster the CJ 
wholly disregards the situation of Ms Förster, who 
was clearly a bona fide claimant — someone who 
had engaged in paid work, who was there to stay 
and  who  found  paid  employment  in  the  Nether-
lands — to return to an abstract assessment of the 
rules at issue. Furthermore, the CJ also disregards 
the  legitimate  expectation  that  its  own  case-law 
might have created, to reach a result — the repay-
ment of the grant received — that was as surpris-
ing as unfair on the claimant.

In the writer’s opinion Förster is a clear sign of the 
CJ’s willingness to accept legislative choices insofar 
as those are generally justified. In other words, the 
ruling  in  Förster  might  signal  the  CJ’s  acceptance 
of  the  legitimacy  to  restrict  support  for  students 
to  those  who  have  an  economic  link  (because 
they  themselves  were  economically  active (589);  or 
because  they  are  the  children  of  an  economically 
active citizen); and to those who have established 
a genuine link with the host society through a very 
prolonged  residence.  Furthermore,  the  ruling  in 
Förster should also be seen in the context of recent 
case-law  where  the  CJ  is  exploring  the  potential 

(

588

)  Case  C-158/07  Förster,  judgment  of  18  November  2008,  not  yet 

published.

(

589

)  See, for example, Case C-413/01 Ninni-Orasche [2003] ECR I-13187.

125

50 years of Social Security Coordination 

Past – Present – Future

of  the  citizenship  provisions  for  the  exportability 
of student support awarded by the country of ori-
gin (590). In the writer’s opinion the case-law is more 
likely to develop in relation to own state support so 
that less and less will the Member State be allowed 
to hinder the movement of students by confining 
support  to  those  who  enrol  in  universities  within 
their  own  territory.  Here  we  could  see  a  develop-
ment similar to what has happened in the health-
care services, where Member States might be under 
an  obligation  to  allow  the  student  to  transfer  to 
another Member State the support that s/he would 
have received at home. Furthermore, the return to 
a  more  abstract  assessment  of  the  legitimacy  of 
the rules at issue might signal the development of 
a more mature case-law.

And  yet,  Förster  is  a  very  confusing  case  and 
leaves  open  the  question  as  to  how  much  of  the 
citizenship  case-law  is  still  good  law.  It  might  be 
that  the  ruling  is  confined  to  students’  support, 
possibly  because  this  is  an  area  where  mobility 
is  higher  and  not  uniform  across  Member  States, 
and  where  therefore  the  economic  impact  of  a 
generous  interpretation  of  the  Treaty  provisions 
might be felt more heavily. Thus it could be that, 
in other cases, the impact of the political choices 
made in Directive 2004/38/EC on the CJ’s case-law 
might be more limited. It has been recalled above 
that  the  CJ  in  Collins  indicated  that  the  Member 
State  might  refuse  a  job-seekers’  allowance  to  a 
migrant job-seeker only to the extent to which the 
latter has not yet established a genuine link with 
the employment market of the host state.  On the 
other  hand,  Article  24(2)  of  Directive  2004/38/EC  
provides  that  Member  States  are  not  obliged  to 
confer  entitlement  to  social  assistance  to  job-
seekers.  And  Article  14  of  Directive  2004/38/EC 
provides  that  recourse  to  social  assistance  shall 
not  determine  the  automatic  expulsion  of  the 
Union citizen (including the job-seeker); and that 

(

590

)  See  Joined  Cases  C-11  and  12/06  Morgan  and  Bucher  [2007]  ECR 
I-9161; and Case C-76/05 Schwarz and Gootjes -Schwarz [2007] ECR 
I-6849, noted by M. Dougan, ‘Cross-border educational mobility and 
the exportation of students’ financial assistance’ (2008), 33 European 
Law Review 723. 

the job-seeker is entitled to stay beyond the first 
three  months  without  having  to  satisfy  any  fur-
ther condition if s/he can demonstrate a genuine 
chance of finding employment. Now it is possible 
that, despite the explicit wording of the directive, 
the  job-seeker  who  has  demonstrated  a  genuine 
chance of finding employment, i.e. who is staying 
beyond three months, might have also established 
a real link with the host employment market and 
therefore might be entitled to claim a job-seekers’ 
allowance (591).  More  generally,  and  bar  a  legisla-
tive choice of absolute clarity, the principle of pro-
portionality has become a constitutional principle 
which cannot be disregarded by the legislature. 

vIII. ConCluSIonS

In  analysing  the  impact  of  the  Treaty  free  move-
ment  and  citizenship  provisions  on  social  security 
coordination we have focused on the ‘constitution-
al’  effects  of  the  case-law,  which  is  to  say  on  that 
case-law that might have future implications for eli-
gibility  to  welfare  provision  regardless  of  regimes 
established by secondary legislation. This case-law 
is  characterised  by  an  expansionist  approach  as 
well  as  by  the  development  of  new  hermeneutic 
techniques to enhance the rights of Union citizens 
whilst,  at  the  same  time,  not  interfering  with  the 
validity  of  secondary  legislation  adopted  before 
the creation of Union citizenship. Whilst the impli-
cations  of  this  case-law  from  a  constitutional  per-
spective are of great significance, the implications 
on  welfare  provision  from  a  practical  perspective 
might be more limited.

In  particular,  the  extent  to  which  a  Union  citizen 
might  claim  welfare  provision  in  the  host  state 
beyond  what  allowed  by  secondary  legislation 
is  constrained  by  the  possibility  for  the  Member 
States  to  justify  imposing  residence  criteria  to 

(

591

)  On  this  point  see  also  Advocate  General  Ruiz-Jarabo  Colomer’s 
opinion in Joined Cases C-22 and 23/08 Vatsouras, opinion delivered 
12 March 2009, case still pending at the time of writing.

126

Eleanor Spaventa

ensure that claimants have established a real, and 
not merely transient, link with the host communi-
ty. In this respect, from a practical perspective, the 
case-law has limited effects for economically inac-
tive claimants: on the one hand, before Unions cit-
izen can qualify for a right of residence beyond the 
first three months, they must meet the conditions 
of  economic  independence  and  comprehensive 
(or  almost  comprehensive) (592)  health  insurance. 
If  those  conditions  are  not  satisfied  it  is  open  to 
the Member State to refuse the right to reside and 
therefore eliminate the risk of welfare exploitation. 
And it is very unlikely that an economically inactive 
citizen  who  has  resided  in  the  host  state  for  just 
three  months  would  have  established  a ‘real  link’ 
with  the  host  society  so  as  to  demand  an  excep-
tion to the resources/insurance rule. On the other 
hand,  whilst  a  one-off  demand  on  the  host  wel-
fare society, a temporary difficulty, is not enough 
to  terminate  the  right  to  reside,  repeated  claims 
might  well  place  the  citizen  in  the ‘unreasonable 
burden’  category.  The  grey  area,  in  this  respect, 
will emerge in relation to those citizens that have 
resided  in  the  host  country  long  enough  to  have 
established  a  ‘real  link’,  say  four  years,  but  who 
are  not  yet  permanent  residents.  In  this  respect, 
it is likely that, as noted by Barnard (593), length of 
residence might be relevant in assessing when the 
citizen  turns  from  a ‘reasonable’  to  an  unreason-
able burden. This said, it cannot be excluded that 
the CJ will now adhere to the provisions of Direc-
tive 2004/38/EC and shift from a constitutional to 
a black-letter approach to welfare entitlement, as 
it did in the case of Förster.

On  the  other  hand,  the  impact  of  the  citizenship 
provisions  might  be  felt  more  heavily  in  relation 
to the reinterpretation of the economic free move-
ment  rules,  and  in  relation  to  eligibility  to  welfare 
provision  within  the  scope  of  Regulations  (EEC) 

Nos  1408/71  or  1612/68.  Here,  the  CJ  has  used 
the  developments  which  have  occurred  since  the 
Maastricht Treaty as a tool to open up the potenti-
ality inherent in both primary and secondary legis-
lation. Thus,  for  instance,  in  Gaumain-Cerri (594),  the 
CJ made  clear that there  is no longer  any need to 
closely  investigate  whether  a  claimant  falls  within 
the personal scope of Regulation (EEC) No 1408/71 
since the combined effect of Union citizenship and 
the  non-discrimination  provision  might  lead  to 
the  same  result  as  that  which  would  be  achieved 
should the regulation apply. And, as we have seen 
in detail above, the reinterpretation of Article 39(2) 
might well allow job-seekers to seek at least some 
support from the host state (595).

In  relation  to  claims  against  the  home  state,  the 
citizenship  provisions  challenge  the  limits  to  the 
exportability  of  benefits,  including  non-contribu-
tory  benefits.  Here,  in  relation  to  those  situations 
where  the  risk  of  benefit  fraud  is  real,  the  CJ  has 
been willing to accept, at least in theory, that a resi-
dence  requirement  might  be  necessary.  And  yet, 
and  as  demonstrated  by  rulings  such  as  Hendrix 
and Nerkowska, the burden of demonstrating that a 
residence requirement is truly necessary falls upon 
the  Member  States.  And,  after  all,  the  case-law  on 
exportability  seems  entirely  consistent  with  the 
creation  of  a  borderless  space  where  citizens  can 
move freely.

Finally, the case-law examined in this contribution 
clearly  shows  the  inherent  limits  that  constrain 
political  choices  at  Community  level.  Secondary 
legislation  might  regulate  the  exercise  of  Treaty 
rights, but it cannot exhaust the potential of those 
rights. This  is  demonstrated  in  the  case-law  con-
cerning  healthcare  provision,  in  the  case-law  on 
exportability,  and  in  the  case-law  that  departs 
from the limits set by the residence directives (and 

(

(

592

)  See Case C-413/99 Baumbast and R. v Secretary of State for the Home 

Department [2002] ECR I-7091. 

593

)  Barnard, ‘Annotation on Bidar’ (2005), 42 Common Market Law Review 
1465; and ‘EU citizenship and the principle of solidarity’ in M. Dougan 
and  E.  Spaventa  (eds),  Social  welfare  and  EU  law  (Hart  Publishing, 
2005), Chapter 8.

594(
) 

Joined Cases C-502/01 and C-31/02 Gaumain Cerri and Barth [2004] 
ECR I-6483.

595(

)  Case  C-138/02  Collins  [2004]  ECR  I-2703;  see  also  Case  C-228/07 

Petersen [2008] ECR I-6989.

127

50 years of Social Security Coordination 

Past – Present – Future

now by the citizenship directive) to find that citi-
zens  can  claim,  in  primary  law,  rights  which  had 
not  been  granted  in  secondary  legislation.  From 
a  constitutional  perspective  this  case-law  is  fully 
defensible; from a political viewpoint this case-law 
might be more problematic in that it might be per-
ceived as an undue interference of the CJ in an area 
which should be left to political negotiation. And 
yet it should not be forgotten that similar criticisms 
were  raised  against  the  expansionist  case-law  on 
the  free  movement  of  persons  and  goods  in  the 

1970s.  History  tells  us  that  without  that  case-law 
the  internal  market  would  have  remained  a  chi-
mera  and  that  the  political  institutions  accepted, 
and in some cases codified, the CJ’s approach (596). 
Similarly,  the  citizenship  directive  signals  the 
acceptance of the main constitutional framework 
relating to citizenship elaborated by the CJ. Maybe 
then the fact that as the area of influence of Com-
munity law grows the citizen is entitled to expect 
a correspondent increase in her rights is far from 
being a heresy.

128

(

596

)  See,  for  example,  Directive  2006/123/EC  on  services  in  the  internal 

market (OJ L 376, 27.12.2006, p. 36).

Jean-Philippe Lhernould

COORdiNATiON  iN  ThE  CONTEx T  
OF iNTERNAL  mARkET  RuLES  
OR hO w TO RESOLvE  ThE  midLiFE  CRiSiS

Jean-Philippe Lhernould
University of Poitiers (France) 

Jean-Philippe Lhernould, PhD, is a professor of law at the University of Poitiers 
in Poitiers, France, where he is also Vice President in charge of Human Resourc-
es.  His  area  of  expertise  is  European  labour  and  social  security  law,  including 
subjects such as the status of mobile employees, discrimination and European 
Works  Councils.  In  addition  to  three  books,  he  has  published  more  than  200 
articles  in  French  and  international  law  journals  and  is  a  frequent  lecturer  at 
international conferences. He is an expert for the European Commission and for 
the TRESS network funded by this institution. He is also active as a consultant to 
law firms and as a legal advisor to international groups, and provides training 
in French labor and social security law to practicing lawyers, private companies 
and public institutions (*).

Fifty  years  on,  when  it  comes  to  conducting  a 
review of the action undertaken, the coordination 
rules are reflected in the magnifying mirror of Com-
munity  construction:  regularly  lambasted  for  their 
shortcomings  and  weaknesses,  their  complexity 
and their inability to evolve, there is scant acknowl-
edgement of their essential contribution to the free 
circulation  of  citizens  and  to  the  internal  market 
within  what  is  a  highly  challenging  institutional 
context due to the weight of the unanimity require-
ment within the Council. In order to appreciate the 
added value of the coordination rules, it is sufficient 
to  consider  what  would  happen  in  their  absence: 
imbroglios  on  the  legislation  applicable,  absence 
of welfare cover, double contributions, loss of enti-
tlement,  etc. What  is  more,  many  of  the  criticisms 
emanating from the field are not the result of any 
inadequacy in the coordination rules but rather of 
incomplete and inadequate national social security 
legislation,  as  well  as  a  deficit  of  information  and 
communication,  the  responsibility  for  which  rests 
primarily with the Member States.

That said, the criticisms do invite a process of ques-
tioning. After all, do the coordination rules not need 
to evolve, given that the areas of legal progress (597) 
obtained  through  painstaking  diplomacy  in  rela-
tion to Regulation (EC) No 883/2004 are not funda-
mental but at best a modernisation, little more than 
a makeover or peripheral adjustments?

The fact is that, despite all its strong points, coordi-
nation is in the throes of a midlife crisis: its territory 
is under threat while, at the same time, its method 
is  being  disputed  and  its  bases  undermined.  Legal 
sources  which  are  supplementary  or  contradic-
tory  to  the  coordination  regulations  are  becoming 
increasingly  visible,  sowing  confusion  among  the 
stakeholders  (the  relevant  top-level  administra-
tions and institutions) and seemingly drowning out 
the  coordination  message.  Who  can  say  with  cer-
tainty today, in the wake of the Bosmann judgment 
inspired directly by the Treaty (Article 42), what the 
scope of the applicable legislation’s principle of unic-
ity is (598), despite this being one of the pillars of the 

597(

)  Because the added value of the new regulation appears to lie in the 

dematerialisation of data exchange.

*( ) 

This contribution was translated from the original French version.

598(

)  Case C-352/06 Bosmann [2008] ECR I-3827.

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50 years of Social Security Coordination 

Past – Present – Future

coordination  system?  Or  to  give  another  example, 
what  the  value  is  of  the  exclusion  from  coordina-
tion (599) of benefits for victims of war, resulting from 
a judgment of the Court of Justice (CJ) according to 
which ‘Article  18(1)  EC  must  be  interpreted  as  pre-
cluding legislation of a Member State under which 
it  refuses  to  grant  to  one  of  its  nationals  a  benefit 
for  civilian  war  victims  solely  on  the  ground  that, 
at  the  time  at  which  the  application  was  submit-
ted, the person concerned was resident, not in the 
territory  of  that  Member  State,  but  in  the  territory 
of  another  Member  State’ (600)? What  future  is  there 
for the regionalisation of employment services, fre-
quently disparaged and, in spite of everything, con-
firmed by Regulation (EC) No 883/2004, whereas the 
status of migrant worker laid down by Article 39 of 
the EC Treaty and the detailed analysis surrounding 
the  principle  of  proportionality  are  fracturing  this 
territorial partitioning (601)? What value has the prin-
ciple of the non-export of special non-contributory 
benefits  whereas  Article  39  of  the  EC  Treaty  also 
makes the legality of the residence clause depend-
ent  upon  an  individual  evaluation  based  around  a 
testing of necessity and of proportionality (602)? The 
same  goes  for  family  benefits,  recipients  of  which 
are  excluded  from  export  by  Regulation  (EEC)  
No 1408/71, but who benefit from the lifting of the 
residence clauses by means of Article 7(2) of Regula-
tion (EEC) No 1612/68 (603). What value is there in the 
condition of advance authorisation for the delivery 
of cross-border healthcare in the face of the require-
ments for the free provision of services? And this is 
not all: there are crucial responses to come on the 
manner  in  which  the  coordination  regulations  will 
be  structured,  regarding  inactive  mobile  citizens, 
with Directive 2004/38/EC of 29 April 2004 concern-
ing  the  right  of  EU  citizens  and  members  of  their 
families to circulate and stay freely on the territory 
of the Member States. Soon we might even witness 

(

(

(

(

(

599

)  Article  3(5)  of  Regulation  (EC)  No  883/2004.  See  also  Case  C-79/76 

Fossi [1977] ECR I-667.

600

)  Case C-192/05 Tas-Hagen [2006] ECR I-10451. See also Case C-221/07 

Krystyna Zablocka-Weyhermüller [2008], not yet published. 

601

)  Case C-228/07 Petersen [2008] ECR I-6989.

602

)  Case C-287/05 Hendrix [2007] ECR I-6909.

603

)  Case C-212/05 Gertraud Hartmann [2007] ECR I-6303.

attempts at secession, i.e. the emergence of sectoral 
coordination systems outside the coordination rules, 
with  such  professional  activity  calling  for  ad  hoc 
regulation to free itself from the ‘coordination mon-
ster’. This secessionist phenomenon is not unknown, 
since separate ‘coordination’ already exists: for addi-
tional pension schemes.

Should  Community 
judges  be  reproached  for 
adapting and escaping the confines of rigid cycles 
and overly restrictive material limits set by the coor-
dination  regulations?  Is  it  not  too  easy  to  accuse 
them of giving in to the easy option of making rul-
ings  on  the  basis  of  sources  external  to  coordina-
tion rather than on that of the complex but ad hoc 
rules, if they perceive coordination to be a technical 
jumble, an abstract ensemble resulting from subtle 
institutional  negotiations,  whereas  each  situation 
of transnational mobility corresponds to a personal, 
unique and sometimes dramatic case?

Although ‘the  rot  has  set  in’,  it  could,  paradoxical-
ly,  help  the  fruit  to  regain  shape,  colour  and  con-
sistency  as  by  concentrating  on  the  principles  of 
the  internal  market,  even  though  they  are  often 
opposed  to  social  security,  consideration  can  be 
given  to  whether  they  could  help  revitalise  coor-
dination,  restore  its  meaning,  give  it  the  central 
role  it  deserves  in  Community  construction  and 
restore confidence among the stakeholders (Mem-
ber States, social security institutions, citizens, busi-
nesses and judges).

Community construction is a unique project which 
relies  on  the  creation  of  indivisible  links  between 
political  stability  and  economic  integration,  the 
former  needing  to  be  the  means  of  preserving 
the  latter.  In  these  days  of  great  instability,  it  is 
apposite  to  recall  this  fact  because  the  tempta-
tion of hostilities is never as far away as we like to 
believe.  This  is  how  the  European  Community  is 
built: even if it is only a tool for working towards a 
noble aim (peace), it is pegged to text that is fun-
damentally economic in essence, constructed upon 
a  liberal  or  neo-liberal  market  ideology.  Article 

130

Jean-Philippe Lhernould

3(c)  of  the  EC  Treaty  formalises  the  framework  of 
what  was  originally  called  the  ‘common  market’, 
before  being  transformed  into  the  ‘internal  mar-
ket’:  the  action  of  the  Community  consists  of ‘an 
internal  market  characterised  by  the  abolition,  as 
between  Member  States,  of  obstacles  to  the  free 
movement  of  goods,  persons,  services  and  capi-
tal’. Even more precisely, ‘The internal market shall 
comprise  an  area  without  internal  frontiers  in 
which the free movement of goods, persons, serv-
ices and capital is ensured in accordance with the 
provisions  of  this  Treaty’  (Article14(2),  EC  Treaty).  
The  CJ  ensures  the  transmission  of  this  ideology: 
‘The  concept  of  a  common  market  as  defined  by 
the Court in a consistent line of decisions involves 
the elimination of all obstacles to intra-Community 
trade in order to merge the national markets into a 
single market bringing about conditions as close as 
possible to those of a genuine internal market’ (604).

Despite  being  presentable  as  antitheses  in  super-
ficial  analyses,  coordination  of  the  national  social 
security regimes and the internal market are evolv-
ing on intersecting planes, although their relations 
are  marked  by  particularities,  some  of  which  are 
worthy of highlighting.

The first particularity concerns the manner in which 
coordination contributes to the internal market. In 
this regard, it in fact occupies a twofold accessory 
role since coordination contributes to the achieve-
ment  of  the  free  movement  of  workers  which  is 
itself a cornerstone of the internal market. It is then 
easy to comprehend the ‘Russian doll’ structure of 
Section 1 (‘The workers’) from Title 3 of the EC Trea-
ty  (‘Free  movement  of  persons,  services  and  capi-
tal’).  Starting  from  the  assertion  made  by  Article 
39(1) of the EC Treaty according to which ‘Freedom 
of  movement  for  workers  shall  be  secured  within 
the Community’, the founding text adds, in Article 
42 of the EC Treaty, a vade-mecum for social secu-
rity coordination, in the form of minimalist content: 
‘The  Council  shall,  acting  in  accordance  with  the 

604(

)  Case 15/81 Gaston Schul Douane Expediteur BV [1982] ECR 1409.

procedure  referred  to  in  Article  251,  adopt  such 
measures in the field of social security as are neces-
sary to provide freedom of movement for workers; 
to this end, it shall make arrangements to secure for 
migrant  workers  and  their  dependants:  (a)  aggre-
gation, for the purpose of acquiring and retaining 
the right to benefit and of calculating the amount 
of benefit, of all periods taken into account under 
the  laws  of  the  several  countries;  (b)  payment  of 
benefits  to  persons  resident  in  the  territories  of 
Member States.’

The second particularity consists, for coordination, 
of  envisaging  the  accomplishment  of  the  internal 
market from the perspective of individuals, with per-
sonal considerations taking precedence over those 
of businesses. It is symptomatic that the preamble 
of Regulation (EEC) No 1408/71 makes no allusion to 
undertakings: ‘Whereas the provisions for coordina-
tion of national social security legislations fall within 
the framework of freedom of movement for work-
ers who are nationals of Member States and should, 
to this end, contribute towards the improvement of 
their standard of living and conditions of employ-
ment’  (preamble,  Section  1).  The  text  is  repeated 
word for word in Recital 1 from the preamble to Reg-
ulation (EC) No 883/2004. Looking at the regulatory 
system  as  a  whole,  it  can  be  observed  that  a  very 
marginal section concerns social security contribu-
tions,  whereas  they  are  a  key  element  of  the  cost 
of  employment  and  consequently  of  a  company’s 
competitiveness.  Apart  from  secondment  and  the 
provisions concerning freelance workers, the regu-
lation is focused on private individuals. The study of 
social security in the context of the internal market 
might  have  prompted  questioning  of  the  role  of 
companies in coordination and on the opportunity 
for a rebalancing of the interpretations between the 
different  stakeholders.  Does  not  Article  16  of  the  
Charter  of  Fundamental  Rights  of  the  European 
Union  stipulate  that  ‘The  freedom  to  conduct  a 
business  in  accordance  with  Community  law  and 
national laws and practices is recognised’? Whether 
it  is  a  case  of  relations  between  small  businesses 
and  the  coordination  rules,  or  relations  between 

131

50 years of Social Security Coordination 

Past – Present – Future

large companies and the coordination rules, there 
is justification for carrying out in-depth work on the 
effectiveness of entrepreneurial freedom within the 
coordination rules. However, that is not the chosen 
theme of this study.

The  third  particularity  lies  in  the  fact  that  coor-
dination is only one of the Community ‘inputs’ of 
social security. On the basis of provisions that are 
both  explicit  and  implicit,  the  internal  market  is 
concerned  with  social  security  from  a  variety  of 
angles:  professional  equality  between  men  and 
women,  wages,  supplementary  pensions,  insur-
ance market, etc. But above all, social security has 
been  hit  by  economic  freedoms  and  their  inte-
grative  aim,  which  contrasts  with  the  reserved 
and  supervised  approach  of  coordination:  the 
law on agreements and dominant positions have 
led the CJ to fashion a concept of social security, 
while freedom of service provision and establish-
ment  have  turned  the  system  for  the  delivery 
of  cross-border  healthcare  upside  down  in  the 
sense  that  it  can  be  regarded  overall  as  favour-
able  to  national  insurance  scheme  contributors. 
The  analysis  of  social  security  through  business 
law contrasts sharply with the prudent approach 
of coordination, which is content to touch lightly 
upon the notion of social security using objective 
indices to define the scope for the application of 
the  rules.  The  CJ  regularly  recalls  the  origin  of 
this  caution,  ‘the  regulations  on  social  security 
for  migrant  workers  did  not  set  up  a  common 
scheme  of  social  security,  but  allowed  different 
schemes to exist, creating different claims on dif-
ferent  institutions’ (605),  specifying  that  ‘Commu-
nity law does not detract from the powers of the 
Member  States  to  organise  their  social  security 
systems’ (606).

These  links  between  coordination  and  the  inter-
nal  market  prompt  the  following  question:  can 
the  coordination  rules  be  reconstructed  upon 

(

(

605

)  Case 807/79 Gravina [1980] ECR I-2205.

606

)  For example, Case C-159/91 Poucet [1980] ECR I-637.

132

an  ambitious  notion  of  social  security,  in  order  to 
renew the identity, credibility, effectiveness, influ-
ence and lustre that they have lost? In other words, 
the aim of this study is to see whether it is possible 
to rethink the aim of the coordination regulations, 
drawing  inspiration  from  the  internal  market.  In 
this  regard,  the  contrast  is  striking  between  the 
formalist  approach  to  social  security  in  the  coor-
dination regulations (I) and the notional approach 
inspired by the tools of the internal market (II). Con-
sequently, if a transplant was attempted, could the 
coordination rules be organised around the notion 
of solidarity (III)? 

I.  a FormalIST aPProaCh 
To SoCIal SeCurIT y 
wIThIn The CoordInaTIon 
regulaTIonS

In  the  coordination  regulations,  social  security  is 
defined by a scope of action (A). The policy of male–
female  equality  with  regard  to  social  security  also 
places  social  security  within  a  fixed  scope,  even  if 
this is not exactly identical (B).

a.  A formalist approach in the 
coordination regulations

The  preamble  to  Regulation  (EC)  No  883/2004, 
which  mirrors  the  preamble  to  Regulation  (EEC) 
No  1408/71,  contains  no  reference  to  the  notion 
of social security. Is this absence linked to the pru-
dent mandate granted to the coordination rules, a 
mandate  recalled  in  the  preamble  and  according 
to which: ‘… it is necessary to respect the special 
characteristics  of  national  social  security  legisla-
tions and to draw up only a system of coordination’  
(Recital  4)?  Echoing  this,  Article  1  of  Regulation 
(EC)  No  883/2004  provides  a  long  list  of  defini-
tions and key concepts for the comprehension and 
implementation  of  the  coordination  rules  which, 
despite going right through the alphabet, fails to 
include that of ‘social security’. Is this because it is 
a pointless exercise in view of the aims pursued, or 

Jean-Philippe Lhernould

because it is too tricky to undertake? Whichever is 
the case, the very objective of coordination is not 
defined.

The choice made was to adopt a formalist approach 
to social security by demarcating its scope as objec-
tively as possible. This choice can be justified both 
by a concern for efficiency and by the spirit of coor-
dination, as it is not a question of either harmoni-
sation  or  convergence,  but  simply  of  coordination 
of national systems, a method permitting the Mem-
ber States to retain their sovereignty with regard to 
social security. It is this approach which led to the 
favouring of a formal and utilitarian logic for social 
security: admittedly with Convention No 102 of the 
ILO for reference, it was simply a question of agree-
ing  between  Member  States  on  the  schemes  and 
services to be coordinated, chosen less on the basis 
of  any  conceptual  unity  than  on  that  of  practical 
criteria,  or  even  elements  of  a  financial  nature.  In 
other words, the social security schemes and provi-
sions  have  been  brought  together  not  by  an  idea 
but by contingencies.

Instead of a notion of social security, Regulation (EC) 
No  883/2004,  like  its  predecessors,  sets  a  physical 
scope for its application. It is Article 3 which marks 
out this area of action: ‘1. This regulation shall apply 
to all legislation concerning the following branches 
of social security:

(a) sickness benefits; (b) maternity and equivalent 
paternity  benefits;  (c)  invalidity  benefits;  (d)  old-
age  benefits;  (e)  survivors’  benefits;  (f )  benefits 
in  respect  of  accidents  at  work  and  occupational 
diseases; (g) death grants; (h) unemployment ben-
efits;  (i)  pre-retirement  benefits;  (j)  family  ben-
efits. 2. Unless otherwise provided for in Annex XI, 
this  regulation  shall  apply  to  general  and  special 
social  security  schemes,  whether  contributory  or 
non-contributory,  and  to  schemes  relating  to  the 
obligations  of  an  employer  or  shipowner.  3.  This 
regulation  shall  also  apply  to  the  special  non-
contributory cash benefits covered by Article 70.4. 
The  provisions  of  Title  III  of  this  regulation  shall 

not,  however,  affect  the  legislative  provisions  of 
any Member State concerning a shipowner’s obli-
gations. 5. This regulation shall not apply to social 
and  medical  assistance  or  to  benefit  schemes  for 
victims of war or its consequences’.

The  criteria  selected  come  down  to  a  triple  fron-
tier within which social security evolves within the 
meaning of the coordination regulations.

In  terms  of  the  first  frontier,  social  security  cor-
responds  to  certain  social  risks.  Whether  general 
or  specific,  schemes  come  under  social  security 
provided that they cover one of the risks listed by 
the  regulation,  the  list  of  risks  having  also  been 
extended  by  Article  3(1)  of  Regulation  (EC)  No 
883/2004, since it now includes paternity and pre-
retirement benefits (607), but not dependency ben-
efits (which remain covered by the regulation, like 
sickness  benefits,  through  interpretation  of  the 
CJ (608).  The  CJ  has  often  opted  for  a  broad  inter-
pretation of each of the risks (609). Nonetheless, the 
criterion of the risk retains an essential usefulness, 
not only to define the system of a particular ben-
efit (610),  but  also  to  determine  the  framework  for 
the application of the regulation. For example, the 
Belgian  minimex, ‘being  a  general  social  benefit, 
cannot be classified under one of the branches of 
social  security  listed  in  Article  4(1)  of  Regulation 
(EEC)  No  1408/71  and  therefore  does  not  consti-
tute  a  social  security  benefit  within  the  specific 
meaning of the regulation’ (611).

607(

)  Full  list  of  the  risks:  sickness  benefits;  maternity  and  equivalent 
paternity  benefits;  invalidity  benefits;  old-age  benefits;  survivors’ 
benefits;  benefits  in  respect  of  accidents  at  work  and  occupational 
diseases;  death  grants;  unemployment  benefits;  pre-retirement 
benefits; family benefits.

608(

)  See, for example, Case C-215/99 Jauch [2001] ECR I-1901.

609(

)  For example, advances of maintenance payments by the state, as they 
are intended to relieve the financial burden borne by the parent who 
is entrusted with the care of the children, constitute a family benefit 
(Case C-85/99 Offermanns [2001] ECR I-2261). It should be noted that 
Article 1(z) of Regulation (EC) No 883/2004 runs counter to this case-
law by stating that ‘the term “family benefit” means all benefits in kind 
or  in  cash  intended  to  meet  family  expenses,  excluding  advances 
of  maintenance  payments  and  special  childbirth  and  adoption 
allowances mentioned in Annex I’. 

610(

)  A benefit classed as sickness benefit would not in fact come under the 

same system as a benefit classed as old-age benefit.

611(

)  Case 249/83 Hoeckx [1985] ECR I-973.

133

50 years of Social Security Coordination 

Past – Present – Future

The second frontier is that social security is distin-
guished from social assistance (612), as the regulation 
does not apply to social assistance (613). It is known, 
however, that the CJ has shaped a different reality 
by creating the category sui generis of mixed bene-
fits, which limits social assistance, within the mean-
ing  of  the  coordination  regulations,  to  a  reduced 
area, through application of the theory referred to 
as the ‘attraction effect of social security’. According 
to a well-known formula of the CJ, ‘although it may 
seem  desirable,  from  the  point  of  view  of  apply-
ing  the  regulation,  to  establish  a  clear  distinction 
between  legislative  schemes  which  come  within 
social security and those which come within assist-
ance, it is possible that certain laws, because of the 
classes of persons to which they apply, their objec-
tives,  and  the  detailed  rules  for  their  application, 
may simultaneously contain elements belonging to 
both  the  categories  mentioned  and  thus  defy  any 
general classification’. Nevertheless, such a benefit 
‘approximates to social security because it does not 
prescribe  consideration  of  each  individual  case, 
which is a characteristic of assistance, and confers 
on recipients a legally defined position’ (614). It mat-
ters  little  that  the  benefit  or  award  is  classified  by 
internal  law  under  the  category  of  social  assist-
ance (615).  Consequently,  the  area  of  social  assist-
ance  is  residual,  covering  benefits  granted  under 
discretionary  conditions  and  those  which  are  not 
connected to any of the social security risks within 
the  meaning  of  Article  3(1)  of  Regulation  (EC)  No 
883/2004. As regards ‘mixed benefits’, Article 70 of 
this  regulation  incorporates  Community  case-law 
by laying down as a principle that it ‘shall apply to 
special  non-contributory  cash  benefits  which  are 
provided  under  legislation  which,  because  of  its 
personal  scope,  objectives  and/or  conditions  for 
entitlement,  has  characteristics  both  of  the  social 
security legislation referred to in Article 3(1) and of 
social assistance’.

612(

)  Benefits for victims of war are not included in the regulation, which 
does not prevent the CJ from coordinating them on the basis of other 
Community provisions. See above.

613(

)  See also Case C-25/95 Otte [1996] ECR I-3745.

614(

)  Case 1/72 Frilli [1972] ECR I-457.

In  terms  of  the  third  frontier,  social  security  is 
restricted  to  statutory  schemes,  as  contractual 
schemes  do  not  fall  within  its  scope.  In  support 
of  Article  3(1)  of  Regulation  (EC)  No  883/2004,  
Article 1(l) of the regulation clarifies the concept of 
‘legislation’, which ‘means, in respect of each Mem-
ber  State,  laws,  regulations  and  other  statutory 
provisions  and  all  other  implementing  measures 
relating  to  the  social  security  branches  covered 
by  Article  3(1)’.  Contractual  schemes  are  not  cast 
aside  totally,  however,  as  coordination  includes 
contractual schemes ‘which serve to implement an 
insurance obligation arising from the laws and reg-
ulations referred to in the preceding subparagraph 
or which have been the subject of a decision by the 
public  authorities  which  makes  them  obligatory 
or extends their scope, provided that the Member 
State concerned makes a declaration to that effect’ 
(Article1(l)). France offers two illustrations of these 
exceptions: the unemployment insurance scheme, 
of  a  contractual  but  compulsory  nature,  comes 
under the coordination regulations because it takes 
the place of a statutory scheme: the ARRCO-AGIRC 
compulsory  supplementary  retirement  scheme 
came in there as a result of a unilateral declaration 
by  the  French  authorities (616).  Are  the  contractual 
schemes concerned social security schemes within 
the meaning of the regulation? The regulation does 
not  say  so (617).  However,  it  is  clearly  apparent  that 
insurance  contracts  concluded  between  an  insur-
ance company and a private individual do not come 
under the scope of the regulation and are therefore 
not social security, even if they do relate to a social 
security risk (618).

Finally, the overview of the scope of social security 
within the meaning of the coordination regulations, 

(

(

616

)  Declaration  of  29  March  1999,  from  which  there  resulted  an 
amendment  to  Regulation  (EEC)  No  1408/71  (Regulation  (EC)  No 
138/2001 of 5 June 2001). 

617

)  See also Recital 6: ‘The close link between social security legislation 
and those contractual provisions which complement or replace such 
legislation  and  which  have  been  the  subject  of  a  decision  by  the 
public  authorities  rendering  them  compulsory  or  extending  their 
scope may call for similar protection with regard to the application of 
those provisions to that afforded by this regulation. As a first step, the 
experience of Member States who have notified such schemes might 
be evaluated’.

615(

)  Cases 379 to 381/85 Giletti et al. [1987] ECR I-955.

(

618

)  Case 313/82 NV Tiel-Utrecht [1984] ECR I-1389.

134

Jean-Philippe Lhernould

despite having evolved somewhat over the years to 
take account of fundamental trends in the national 
systems (619),  is  as  follows:  schemes  of  a  statutory 
origin, exceptionally contractual in nature, covering 
benefits relating to an exhaustive list of social risks, 
but encroaching upon social assistance.

b.  A formalist approach in the context of 

male–female equality

Male–female  equality  lies  at  the  heart  of  Commu-
nity social policy. Article 119 of the Treaty of Rome 
declares  that ‘each  Member  State  shall  during  the 
first  stage  ensure  and  subsequently  maintain  the 
application  of  the  principle  that  men  and  women 
should receive equal pay for equal work’. This policy 
has  been  developed  and  ramified  in  derived  legal 
texts,  certain  of  which  relate  to  social  protection. 
Directive 79/7/EEC for statutory schemes and Direc-
tive  86/378/EEC  for  occupational  schemes  have 
implemented the principle of equality of treatment 
in the field of social security. Directive 2006/54/EC 
of  the  European  Parliament  and  of  the  Council  of 
5 July 2006 on the implementation of the principle 
of equal opportunities and equal treatment of men 
and women in matters of employment and occupa-
tion has absorbed the latter, while Directive 79/7/EEC  
continues on its path independently. Our focus will 
be  primarily  on  the  latter  and  on  the  expansion-
ist  case-law  of  the  CJ,  based  on  Article  141  of  the 
EC  Treaty.  It  will  become  clear  that  the  formalist 
path  taken  leads  to  the  definition  of  social  secu-
rity according to two frontiers: in relation to social  
aid (1), and in relation to occupational schemes (2).

1.  Social security and social assistance

Directive 79/7/EEC of 19 December 1978 on the pro-
gressive  implementation  of  the  principle  of  equal 
treatment for men and women in matters of social 
security, which has the aim of ‘implementing in the 

first place in the statutory schemes which provide 
protection  against  the  risks  of  sickness,  invalidity, 
old  age,  accidents  at  work,  occupational  diseases 
and  unemployment,  and  in  social  assistance  inso-
far  as  it  is  intended  to  supplement  or  replace  the 
abovementioned  schemes’  (preamble,  Recital  1), 
offers  an  interesting  view  of  the  manner  in  which 
statutory schemes and social aid are structured.

There  is  a  first  significant  difference  in  terms  of 
vocabulary:  whereas  the  expression  ‘social  assist-
ance’  is  used  in  the  coordination  regulations,  it  is 
the  term ‘social  aid’  that  is  opted  for  in  relation  to 
equality between the sexes. While this terminologi-
cal variation might not appear to have any concrete 
implication,  one  might  regret  the  lack  of  rigour  in 
the terms, which results at the very least in a com-
partmentalised  view  of  the  concepts  connected 
with social protection in Community law. The other 
difference lies in the inclusion, within the physical 
scope of Directive 79/7/EEC, of provisions concern-
ing  social  aid,  provided  that ‘it  is  intended  to sup-
plement  or  replace  the  schemes  referred  to  in  (a)’. 
But contrary to what the title of the directive might 
suggest, social aid is not related to social security, 
as  Article  1  of  the  directive  indicates  that  its  pur-
pose is ‘the progressive implementation, in the field 
of social security and other elements of social protec-
tion provided for in Article 3, of the principle of equal 
treatment for men and women in matters of social 
security’.  The  directive  thus  makes  a  distinction 
between social security and social protection.

Points  of  rapprochement  can  also  be  observed. 
Just  as  for  the  coordination  regulations  and  in 
the  same  spirit  of  useful  effect,  the  CJ  opts  for  a 
broad interpretation of the scope of the statutory 
schemes to the detriment of social aid, even if the 
legal  risks  covered  are  not  exactly  the  same (620). 
For  example,  a  UK  old-age  winter  fuel  payment, 
because  its  source  is  in  the  law  and  it  relates  to  the 

619(

)  Extension  of  the  scope  of  coordinated  benefits,  from  the  worker  to 
the person covered by national health insurance and then to the EU 
citizen, etc.

620(

)  According to Article 3(1)(a), it covers the risks of sickness, invalidity, 
old  age,  accidents  at  work  and  occupational  diseases,  and 
unemployment.

135

50 years of Social Security Coordination 

Past – Present – Future

old-age  risk,  comes  under  Directive  79/7/EEC (621). 
The  statutory  social  security  schemes  even  go  as 
far  as  to  cover  benefits  that,  in  organic  terms,  have 
nothing  to  do  with  social  security:  ‘a  system  such 
as  that  established  by  Regulation  No  6(1)  of  the 
1989  regulations,  which  exempts  certain  catego-
ries  of  persons,  in  particular  certain  old  people, 
from prescription charges falls within the scope of 
the directive’ because ‘in view of the fundamental 
importance of the principle of equal treatment and 
the  aim  of  Directive  79/7/EEC,  which  is  the  pro-
gressive implementation of that principle in mat-
ters of social security, a system of benefits cannot 
be excluded from the scope of the directive simply 
because  it  does  not  strictly  form  part  of  national 
social security rules’ (622). On the other hand, as in the 
coordination regulations, general social aid benefits 
are excluded from the scope of the directive, with the 
reference to ‘other elements of social protection pro-
vided for in Article 3’ of Directive 79/7/EEC effectively 
only interpretable as referring to the provisions con-
cerning  social  aid,  which  generally  remain  outside 
the  field  of  social  security (623).  Overall,  however,  as 
within the context of the coordination regulations, 
the scope of social aid is residual.

2.  Social security and occupational schemes

One of the summa divisio of the coordination regu-
lations relates to the distinction between statutory 
schemes  and  supplementary  schemes  since,  with-
out  exception,  only  the  first  are  covered  by  their 
prescriptions,  with  the  second  category  coming 
under (624)  Directive  98/49/EC  on  ‘portability’.  The 
issue is similar for male–female equality in matters 
of social security, as it is appropriate to disassociate 
‘statutory  social  security  schemes’,  which  are  sub-
ject to the stipulations of Directive 79/7/EEC, from 
‘occupational social security schemes’, which come 

under Directive 86/378/EEC and which correspond 
to  supplementary  pension  schemes (625).  It  is  also 
worth asking why, in the title of the directive, this 
last expression was not preferred to ‘supplementary 
pension’, which is more opaque and out of step with 
that of Directive 98/49/EC.

What  observations  can  be  made?  First  of  all,  the 
complementarity  between  the  two  texts  is  for-
malised,  since  Article  2  of  Directive  86/378/EEC 
specifies that ‘Occupational social security schemes 
means  schemes  not  governed  by  Directive  79/7/
EEC’.  The  initiative  is  identical  for  coordination, 
with  any  overlapping  being  avoided  by  Directive 
98/49/EC, ‘Whereas  no  pension  or  benefit  should 
be  subject  to  both  the  provisions  of  this  directive 
and  those  of  Regulations  (EEC)  No  1408/71  and 
(EEC)  No  574/72,  and  therefore  any  supplementa-
ry pension scheme which comes within the scope 
of those regulations, because a Member State has 
made a declaration to that effect under Article 1(j) 
of Regulation (EEC) No 1408/71, cannot be subject 
to  the  provisions  of  this  directive’  (Recital  5).  Even 
more  clearly,  the  preamble  to  Directive  98/49/EC 
recalls  that  the  coordination  regulations  ‘are  not 
appropriate  to  supplementary  pension  schemes, 
except for schemes which are covered by the term 
“legislation”  as  defined  by  the  first  subparagraph 
of Article 1(j) of Regulation (EEC) No 1408/71 or in 
respect of which a Member State makes a declara-
tion under that article’ (Recital 4). As the preamble 
to  a  directive  is  devoid  of  imperative  legal  value, 
it  is  Article  1  of  Directive  98/49/EC  that  establish-
es  the  structuring  in  respect  of  the  coordination 
rules: the protection offered by the directive ‘refers 
to  pension  rights  under  both  voluntary  and  com-
pulsory supplementary pension schemes, with the 
exception of schemes covered by Regulation (EEC) 
No 1408/71’.

(

(

(

621

)  Case C-382/98 Taylor [1999] ECR I-8955.

622

)  Case C-137/94 Richardson [1995] ECR I-3407.

623

)  Case  C-228/94  Atkins  [1996]  ECR  I-3633  (equal  treatment  for  men 
and  women  —  concessionary  fares  on  public  passenger  transport 
services). See also Cases C-63 and 64/91 Jackson and Cresswell [1992] 
ECR I-4737 (British benefit providing minimal resources).

(

624

)  Excluding  exceptions:  see  in  particular  the  ARRCO-AGIRC  French 

supplementary schemes.

(

625

)  See  Articles  1  and  2  of  the  directive.  By  ‘supplementary  pension 
scheme’, Article 3(b) means ‘pension scheme means any occupational 
pension  scheme  established  in  conformity  with  national  legislation 
and  practice  such  as  a  group  insurance  contract  or  pay-as-you-go 
scheme agreed by one or more branches or sectors, funded scheme 
or  pension  promise  backed  by  book  reserves,  or  any  collective  or 
other comparable arrangement intended to provide a supplementary 
pension for employed or self-employed persons’.

136

Jean-Philippe Lhernould

But  while  the  development  of  the  relationship 
between  the  coordination  regulations  and  Direc-
tive 98/49/EC goes no further, Directive 86/378/EEC 
provides elements that help to define what comes 
under  the  statutory  and  occupational  schemes 
respectively; ‘Occupational social security schemes 
means  schemes  not  governed  by  Directive  79/7/
EEC whose purpose is to provide workers, whether 
employees  or  self-employed,  in  an  undertaking 
or  group  of  undertakings,  area  of  economic  activ-
ity or occupational sector or group of such sectors 
with  benefits  intended  to  supplement  the  ben-
efits provided by statutory social security schemes 
or  to  replace  them,  whether  membership  of  such 
schemes is compulsory or optional’ (Article2(1)).

The breakdown between statutory schemes on the 
one  hand  and  occupational  schemes  on  the  other 
is an important issue for the implementation of the 
policy of equal treatment for men and women, par-
ticularly  because  Article  7(1)  of  Directive  79/7/EEC 
authorises Member States not to apply equal treat-
ment to certain key questions (626). In practice, Direc-
tive  86/378/EEC  has  had  a  secondary  effect  on  the 
breakdown of statutory/occupational schemes: it is 
Article 141 of the EC Treaty that has played a key role 
through  the  concept  of ‘pay’ (627). This  provision  has 
also displaced the lines between statutory and occu-
pational schemes, within the meaning of a marginali-
sation of the former. As an indirect consequence, the 
concepts of ‘occupational scheme’ within the mean-
ing of Directive 86/378/EEC and within the meaning 
of Article 141 of the EC Treaty do not match up…

626(
) 

‘This  directive  shall  be  without  prejudice  to  the  right  of  Member 
States to exclude from its scope: (a) the determination of personable 
age for the purposes of granting old-age and retirement pensions and 
the possible consequences thereof for other benefits; (b) advantages 
in  respect  of  old-age  pension  schemes  granted  to  persons  who 
have  brought  up  children;  the  acquisition  of  benefit  entitlements 
following periods of interruption of employment due to the bringing 
up  of  children;  (c)  the  granting  of  old-age  or  invalidity  benefit 
entitlements by virtue of the derived entitlements of a wife; (d) the 
granting  of  increases  of  long-term  invalidity,  old-age,  accidents  at 
work and occupational disease benefits for a dependent wife; (e) the 
consequences of the exercise, before the adoption of this directive, 
of a right of option not to acquire rights or incur obligations under a 
statutory scheme’.

Admittedly, it is unsurprising that an occupational 
pension scheme ‘does not constitute a social secu-
rity scheme governed directly by statute and thus 
outside the scope of Article 119, and that benefits 
paid  to  employees  under  the  scheme  therefore 
constitute  consideration  received  by  the  worker 
from  the  employer  in  respect  of  his  employment, 
as  referred  to  in  the  second  paragraph  of  Article 
119’ (628). Similarly, occupational pension schemes 
resulting either from a consultation between social 
partners  or  from  a  unilateral  decision  on  the  part 
of the employer, the funding of which is provided 
entirely by the employer or by both the latter and 
the employees, without any contribution from the 
public authorities, are occupational schemes result-
ing in remuneration (629).

The CJ has nonetheless gone far beyond the natural 
framework  of  occupational  schemes  by  construct-
ing,  through  abundant  case-law,  a  profile  of  the 
schemes  coming  under  Directive  79/7/EEC  and  of 
occupational  schemes  resulting  in  remuneration 
within the meaning of Article 141 of the EC Treaty. 
The  statutory  schemes  are  effectively  limited  to 
schemes ‘directly  governed  by  legislation  without 
any  element  of  agreement  within  the  undertak-
ing  or  the  occupational  branch  concerned,  which 
are obligatorily applicable to general categories of 
workers’,  as ‘these  schemes  assure  for  the  workers 
the benefit of a statutory scheme, the financing of 
which workers, employers and possibly the public 
authorities  contribute  in  a  measure  determined 
less  by  the  employment  relationship  between  the 
employer and the worker than by considerations of 
social policy’ (630). In contrast, all schemes that do 
not  meet  the  cumulative  criteria  are  occupational 
schemes or ‘can be assimilated to a private occupa-
tional  scheme’ (631),  and  there  are  many  of  them 
too, covering millions of workers. For example, the 
(French)  ARRCO-AGIRC  supplementary  retirement 
scheme  is  an  occupational  scheme  that  results  in 

627(

)  The  CJ  has  rarely  interpreted  Directive  86/378/EEC,  despite  the 
prejudicial questions which have been put to it in this sense: as long 
as the questions are answered by Article 141 of the Treaty, it adjudges 
it unnecessary to respond on the basis of Directive 86/378/EEC (see, 
for example, Case C-19/02 Hlosek [2004] ECR I-11491).

628(

)  Case 170/84 Bilka-Kaufhaus [2004] ECR I-1607.

629(

)  Case C-262/88 Barber [1990] ECR I-1889.

630(

)  Case 80/70 Defrenne [1971] ECR I-445.

631(

)  See Case C-7/93 Beune [1994] ECR I-4471.

137

50 years of Social Security Coordination 

Past – Present – Future

remuneration  within  the  meaning  of  Article  141 
of  the Treaty  because ‘the  criterion  relating  to  the 
arrangements  for  funding  and  managing  a  pen-
sion  scheme  does  not  make  it  possible  to  deter-
mine whether such a scheme falls within the scope 
of Article 119 of the Treaty’, so long as it ‘does not 
involve  social  security  schemes  designed  for  the 
whole population or all workers’ and that ‘the ben-
efits  granted  are  related  to  the  last  salary’ (632). 
However, we are in the presence here of a scheme 
that  is  quasi-statutory,  compulsory,  run  according 
to the pay-as-you-go mechanism (633), paying ben-
efits  in  many  cases  superior  to  those  of  the  basic 
scheme  and  also  coming  under  Regulation  (EEC) 
No  1408/71.  Another  example,  a  scheme  for  civil 
servants  such  as  that  of  the  ABPW  (Netherlands), 
directly  fixed  by  law,  which  is  not  solely  supple-
mentary  since  it  can  partially  take  the  place  of 
another  statutory  scheme  that  is  part-financed  by 
the government, results in ‘pay’ within the meaning 
of Article 141 of the Treaty because ‘the pension is 
paid  to  the  worker  by  reason  of  the  employment 
relationship between him and his former employer, 
that is to say the criterion of employment based on 
the wording of Article 119 itself’. For the CJ, ‘consid-
erations  of  social  policy,  of  state  organisation,  or 
of ethics or even budgetary preoccupations which 
influenced,  or  may  have  influenced,  the  establish-
ment by the national legislature of a scheme such 
as  the  scheme  at  issue  cannot  prevail  if  the  pen-
sion  concerns  only  a  particular  category  of  work-
ers,  if  it  is  directly  related  to  the  period  of  service 
and if its amount is calculated by reference to the 
civil  servant’s  last  salary. The  pension  paid  by  the 
public  employer  is  therefore  entirely  comparable 
to  that  paid  by  a  private  employer  to  his  former 
employees’ (634). As a last example, a French pub-
lic servant-based scheme organised by law and run 
on a pay-as-you-go basis amounts to remuneration 
because ‘public servants who benefit from it must 
be regarded as constituting a particular category of 

(

632

)  Case C-50/99 Podesta [2000] ECR I-4039.

(

633
) 

In the Evrenopoulos judgment (Case C-147/95 Evrenopoulos [2000] 
ECR  I-2057),  the  CJ  had  already  ruled  that  a  pay-as-you-go  scheme 
could come under Article 141 of the Treaty.

(

634

)  Case C-7/93 Beune [1994] ECR I-4471.

workers’, as the pension is ‘granted in remuneration 
for  the  services  which  they  performed  until  their 
retirement from the service and that the amount of 
the pension takes account of the level, duration and 
nature of the services’, with the CJ adding that ‘the 
criterion derived from the supplementary nature of 
a  pension  in  relation  to  a  basic  pension  provided 
by a statutory social security scheme nor the crite-
rion  relating  to  the  arrangements  for  funding  and 
managing  a  pension  scheme  is  conclusive  for  the 
purpose  of  determining  whether  the  scheme  in 
question falls within the scope of Article 119 of the 
Treaty’ (635).

This  rapidly  presented  case-law  on  Article  141  of 
the EC Treaty shows that the formal criteria which 
constitute  the  source  of  the  scheme  (statutory  or 
contractual origin) and its position within the archi-
tecture  of  social  protection  (basic  or  supplemen-
tary  scheme)  do  not  constitute  decisive  elements. 
The  criteria  of  management  method  (by  pay-as-
you-go or by capitalisation, compulsory or optional 
participation)  and  funding  method  (autonomous 
or  with  public  authority  intervention)  are  also 
irrelevant,  as  is  any  submission  of  the  scheme  to 
the  coordination  regulations.  The  result  is  that  a 
scheme  can  be  adjudged  occupational  within  the 
meaning  of  male–female  equality  and  statutory 
within  the  meaning  of  the  coordination  rules. The 
approach of the CJ is therefore entirely instrumen-
tal, leaving to one side any reflection on the notion 
of social security, which leads to the favouring of a 
variable geometry approach: social security is mal-
leable; its contours fluctuate according to the ques-
tions being dealt with. It can also be observed that 
statutory social security schemes are defined, from 
the  perspective  of  Article  141  of  the  EC Treaty,  by 
default: they cover schemes that do not constitute 
remuneration within the meaning of the CJ’s crite-
ria. Priority is therefore given to ‘occupational social 
security’, even if that means broadening its scope.

(

635

)  Case  C-366/99 Griesmar  [2001] ECR I-9383. It  should  be noted that, 
in this judgment, the CJ does not describe the pension scheme as an 
‘occupational scheme’. 

138

Jean-Philippe Lhernould

Incidentally,  it  appears  that  Directive  2008/94/EC 
of  the  European  Parliament  and  of  the  Council  of 
22 October 2008 on the protection of employees in 
the event of the insolvency of their employer, which 
codifies  Directive  80/987/EEC  and  the  subsequent 
directives making certain amendments to it, is con-
cerned with ‘social security’. The Member States may 
thus  make  provision  that  Articles  3,  4  and  5  of  the 
directive ‘shall not apply to contributions due under 
national statutory social security schemes or under 
supplementary  occupational  or  inter-occupational 
pension  schemes  outside  the  national  statutory 
social  security  schemes’.  For  the  CJ,  referred  to  in 
respect  of  UK  retirement  schemes  financed  by  the 
employer  in  the  form  of  pension  funds,  in  a  case 
where  the  assets  of  the  company  in  difficulty  were 
not sufficient to cover all of the benefits owed to all 
of  the  contributors,  there  is  ‘no  obligation  for  the 
Member States to guarantee entitlement to old-age 
benefits in full’. However, a minimum level of protec-
tion required by the directive must be respected and 
it must be held ‘that provisions of domestic law that 
may,  in  certain  cases,  lead  to  a  guarantee  of  ben-
efits limited to 20 or 49 % of the benefits to which 
an employee was entitled, that is to say, of less than 
half of that entitlement, cannot be considered to fall 
within  the  definition  of  the  word “protect”  used  in 
Article 8 of the directive’ (636).

This first part permits the assertion that social security 
is devoid of identity in Community social law, whether 
for coordination or equality between the sexes: it is 
only an area of variable geometry, merely the instru-
ment of policies which overhang and eclipse it. Should 
we be surprised therefore that the judges go beyond 
the  coordination  regulations  and,  according  to  the 
circumstances, draw upon alternative solutions from 
external sources? In reaction to this negative obser-
vation, which presents a destructured vision of social 
security  within  Community  social  law,  ideas  can  be 
drawn from the manner in which the internal market 
links social security and solidarity. 

II.  a noTIonal aPProaCh To 
SoCIal SeCurIT y InSPIred 
by The ToolS oF The 
InTernal markeT?

Beyond  the  coordination  regulations,  social  secu-
rity is dealt with, in a direct or indirect manner, by 
multiple  sources  of  primary  law  and  derived  law. 
Analysis  of  the  texts  and  of  the  relevant  case-law 
enables the emphasis to be placed on a very differ-
ent approach to social security, where reasoning no 
longer takes place according to an area but accord-
ing to a notion.

What is a notion? The notion of ‘notion’ comes down 
to the idea of classification. Identifying the notion 
of a given subject means finding constants, identi-
ties, behind a changing and heterogeneous social 
reality.  Work  on  notion  is  inherent  in  legal  activ-
ity (637).  The  individualisation  of  a  notion  involves 
counting  its  constituent  elements,  its  interac-
tions  and  expressing  its  distinctive  elements.  But 
‘notion’  does  not  mean ‘definition’:  the  notion  is 
not necessarily connected to the positive law, but 
aids understanding of the reality and is ‘the result 
of  an  intellectual  procedure  which  consists  of  a 
passage from the sensible reality to the represen-
tation  of  this  reality  through  the  idea  which  one 
has  of  reality’ (638).  The  notion  is  the  general  idea 
proposed in the work of the mind, or ‘the result of 
an  effort  of  the  mind,  with  a  view  to  grasping,  in 
a predominant representation, the logical essence 
of things.’ (639) In this respect, notion is not differen-
tiated from concept.

In methodological terms, the discovery of a notion 
presumes  a  double  movement:  a  movement  of 
abstraction,  of  generalisation  of  the  real,  followed 
by  a  process  of  returning  to  the  real.  Let  us  take 
an example borrowed from Charles Jarrosson (see 
above): if one knows iron, lead, gold and copper, the 

(

636

)  Case  C-278/05  Robins  [2007]  ECR  I-1053.  According  to  the  CJ,  the 
responsibility  of  the  Member  State  concerned  is  contingent  on  a 
finding of manifest and grave disregard by that state for the limits set 
on its discretion.

637(

)  F.  P.  Benoît,  Notions,  concepts,  instruments  de  la  connaissance 

juridique, PU Grenoble, 1995. 

638(

)  C. Jarrosson, La notion d’arbitrage, LGDJ, Paris, 1987.

639(

)  C. Jarrosson, see above

139

50 years of Social Security Coordination 

Past – Present – Future

mind requires this double procedure of generalisa-
tion and abstraction to grasp the concept of metal. 
Once  this  stage  is  reached,  it  will  be  all  the  easier 
to  recognise  this  or  that  metal  which  was  previ-
ously unknown. In the field of law, the search for a 
notion is carried out through an analysis designed 
to bring together, among the elements of the real, 
those which lend themselves to classification under 
a common description. The notion will be the result 
of data as diverse as the history, the social and eco-
nomic concept and the compared law. This process 
allows the notion to influence the legal reality, since 
it  encourages  the  law  to  be  placed  in  accord  with 
the notion. There would then be two categories of 
notions, those which are ‘conceptual’, which would 
exist  independently  of  what  they  are  being  used 
for (640),  and  ‘functional’  notions  characterised  by 
the role that they play. In our opinion, the notion of 
social security should borrow simultaneously from 
the two approaches.

It is precisely through the instruments of the inter-
nal  market  that  social  security’s  identity  has  been 
isolated in Community law: what is inherent in social 
security is solidarity. This is strikingly apparent from 
the case history of the CJ (A) and from the legisla-
tive works (B).

a.  Solidarity and social security in CJ 

case-law

The very nature of social security was discerned by 
the  CJ  over  25  years  ago,  within  the  context  of  a 
conflict  involving  the  application  of  the  principles 
of free movement of goods (641). The dispute centred 
on ascertaining whether the prohibition of measures 
having  an  effect  equivalent  to  quantitative  restric-
tions  on  imports  and  exports  applies  to  measures 
whereby  a  Member  State  (the  Netherlands),  with  a 
view to achieving economies regarding compulsory 
healthcare  insurance,  prevents  specifically  named 
medicinal  preparations  and  dressings  from  being 

(

(

640

)  G. Vedel, JCP 1948, I, No 682.

641

)  Case 238/82 Duphar [1984] ECR I-523.

140

supplied to persons insured under the scheme. It was 
found that 80 % of  the  medicinal  preparations  con-
sumed  in  the  Netherlands  were  imported, and that 
it followed that, where reimbursement by the insur-
ance authority is excluded in respect of a medicinal 
preparation,  purchases  of  that  preparation  fall  and 
consequently  there  is  a  risk  that  the  preparation  in 
question will be totally eliminated from the national 
market.  The  CJ’s  response  was  based  on  the  original-
ity of the compulsory sickness insurance sector, ‘In view 
of the special nature, in that respect, of the trade in 
pharmaceutical products, namely the fact that social 
security  institutions  are  substituted  for  consumers 
as regards responsibility for the payment of medical 
expenses, legislation of the type in question cannot 
in itself be regarded as constituting a restriction on 
the  freedom  to  import  guaranteed  by  Article  30  of 
the Treaty if certain conditions are satisfied’ (642). And 
what  is  the  nature  of  this  ‘special  nature’?  The  CJ  did 
not elaborate, but the impression given was that once 
defined, it would serve to singularise social security and 
to justify separate treatment with regard to the rules of 
competition law.

It was 10 years later that the CJ had the opportunity 
to specify its analysis. In the famous Poucet and Pis-
tre (643) cases, two freelance workers challenged not 
the  obligation  to  contribute  to  sickness  and  old-
age risks, but not being able to choose their insurer 
freely, as this was imposed on them by the statutory 
social security schemes to which it was compulsory 
for  them  to  contribute.  The  two  insured  persons 
took the view that the body responsible for manag-
ing the social security scheme should be regarded 
as  constituting  an  undertaking  in  the  meaning  of 
Articles  85  and  86  of  the  Treaty,  as  the  dominant 
position granted by the law to this body was incom-
patible  with  the  common  market.  The  CJ  did  not 

(

642

)  The CJ concluded that, for such legislation to be in conformity with 
the Treaty, the choice of the medicinal preparations to be excluded 
must  be  free  of  any  discrimination  to  the  detriment  of  imported 
medicinal  preparations. To  that  end,  the  exclusionary  lists  must  be 
drawn up in accordance with objective criteria, without reference to 
the origin of the products, and must be verifiable by any importer.

(

643
) 

Joined  Cases  C-159/91  and  C-160/91  Christian  Poucet  v  Assurances 
Générales de France and Caisse Mutuelle Régionale du Languedoc-
Roussillon [1993] ECR I-637 and 647.

Jean-Philippe Lhernould

follow  this  line  of  argument,  ruling  that ‘Sickness 
funds, and the organisations involved in the man-
agement of the public social security system, fulfil 
an exclusively social function. That activity is based 
on the principle of national solidarity and is entirely 
non-profit-making. The benefits paid are statutory 
benefits  bearing  no  relation  to  the  amount  of  the 
contributions.  Accordingly,  that  activity  is  not  an 
economic activity and, therefore, the organisations 
to which it is entrusted are not undertakings within 
the meaning of Articles 85 and 96 of the Treaty’.

What  is  solidarity?  For  the  Poucet  and  Pistre  judg-
ments, it means providing cover for all the persons 
to whom it applies, against the risks of sickness, old 
age, death and invalidity, regardless of their finan-
cial  status  and  their  state  of  health  at  the  time  of 
affiliation.  In  the  sickness  and  maternity  scheme, 
continues  the  CJ,  solidarity  is  embodied  in  the  fact 
that  the  scheme  is  financed  by  contributions  pro-
portional to the income from occupation and to the 
retirement  pensions  of  the  persons  making  them; 
only recipients of an invalidity pension and retired 
insured  members  with  very  modest  resources  are 
exempted  from  the  payment  of  contributions, 
whereas the benefits are identical for all those who 
receive them. Furthermore, persons no longer cov-
ered by the scheme retain their entitlement to ben-
efits for a year, free of charge. Solidarity entails the 
redistribution  of  income  between  those  who  are 
better off and those who, in view of their resources 
and state of health, would be deprived of the neces-
sary social cover. In the old-age insurance scheme, 
solidarity is embodied in the fact that the contribu-
tions  paid  by  active  workers  serve  to  finance  the 
pensions  of  retired  workers.  It  is  also  reflected  by 
the grant of pension rights where no contributions 
have been made and of pension rights that are not 
proportional to the contributions paid.

Solidarity  is  therefore  both  an  end  and  a  means  for 
social security. Consequently, the approach differs radi-
cally from that followed in the coordination regulations, 
as  the  formal  criteria  of  the  latter  take  a  back  seat  in 
relation to the functional criteria of the internal market.

The  CJ’s  reasoning  was  transposed  to  a  dispute 
concerning the refusal of a craftsman to pay social 
security  contributions  to  the  Italian  workers’  com-
pensation authority in respect of accidents at work, 
a  refusal  justified  by  the  fact  that  this  authority 
would be the holder of a monopoly constituting an 
abuse of dominant position. The CJ adopts a similar 
position to that of the Poucet and Pistre judgments, 
adapted  to  the  context  of  the  risk  of  accident  at 
work: ‘The  concept  of  an  undertaking,  within  the 
meaning of Articles 85 and 86 of the EC Treaty (now 
Articles  81  EC  and  82  EC),  does  not  cover  a  body 
which is entrusted by law with the management of 
a scheme providing compulsory insurance against 
accidents at work and occupational diseases, such 
as the Istituto nazionale per l’assicurazione contro 
gli  infortuni  sul  lavoro  (INAIL)’.  On  the  one  hand, 
‘the covering of risks of accidents at work and occu-
pational diseases has for a long time  been  part of 
the  social  protection  which  Member  States  afford 
to all or part of their population’. On the other, the 
Italian  scheme  providing  insurance  against  acci-
dents at work and occupational diseases, ‘insofar as 
it provides for compulsory social protection for all 
non-salaried workers in the non-agricultural profes-
sions  who  carry  out  an  activity  classified  as  a  risk 
activity by the law, pursues a social objective’. This 
is because ‘Such a scheme is intended to provide all 
the persons protected with cover against the risks 
of accidents at work and occupational diseases, irre-
spective of any fault which may have been commit-
ted by the victim, or by the employer, and therefore 
without any need for civil liability to be incurred by 
the  person  drawing  benefits  in  respect  of  the  risk 
activity’.  Moreover, ‘Furthermore,  the  social  aim  of 
that  insurance  scheme  is  highlighted  by  the  fact 
that benefits are paid even when the contributions 
due have not been paid, which obviously contrib-
utes to the protection of all insured workers against 
the  economic  consequences  of  accidents  at  work 
or  occupational  diseases’.  The  CJ  then  highlights 
several  elements  which  establish  that  the  scheme 
is guided by the principle of solidarity: it is ‘financed 
by  contributions  the  rate  of  which  is  not  system-
atically proportionate to the risk insured’, with the 

141

50 years of Social Security Coordination 

Past – Present – Future

amount of benefits paid being ‘not necessarily pro-
portionate  to  the  insured  person’s  earnings’.  The 
absence  of  any  direct  link  between  the  contribu-
tions  paid  and  the  benefits  granted  ‘thus  entails 
solidarity  between  better  paid  workers  and  those 
who,  given  their  low  earnings,  would  be  deprived 
of proper social cover if such a link existed’ (644).

How would the CJ react in relation to supplementary 
schemes? In the FFSA (645) case, it chose, on the basis 
of  the  same  elements  of  reasoning,  an  opposite 
solution regarding a French supplementary old-age 
insurance scheme for non-salaried persons from the 
agricultural professions. The decree establishing this 
scheme  envisaged  that  it  would  be  managed  by  the 
Caisse nationale d’assurance vieillesse mutuelle agri-
cole, a monopoly situation contested by the federation 
representing private insurance companies. For the CJ, 
‘A non-profit-making organisation which manages 
an  old-age  insurance  scheme  intended  to  supple-
ment  a  basic  compulsory  scheme,  established  by 
law  as  an  optional  scheme  and  operating  accord-
ing to the principle of capitalisation in keeping with 
the rules laid down by the authorities in particular 
with  regard  to  conditions  for  membership,  contri-
butions and benefits, is an undertaking for the pur-
poses of Article 85 et seq. of the Treaty’. This resulted 
in an opposite response to that of the Poucet and Pis-
tre judgments: that it is not the supplementary nature 
of the scheme, but the fact that it operates according 
to the mechanism of capitalisation, with participation 
also  being  optional,  that  is  enough  to  render  insuffi-
cient the elements of solidarity on the basis of which 
the  French  authorities  were  attempting  to  justify  the 
monopolistic position.

Then  came  the  turn  of  three  judgments  from 
21  September  1999 (646)  relating  to  Dutch  supple-
mentary pension schemes (second pillar) organised 

(

(

(

644

)  Case C-218/00 Cisal di Battistello Venanzio & C. Sas et INAIL [2002] ECR 

I-691.

645

)  Case  C-244/94  Fédération  Française  des  Sociétés  d’Assurance, 
Société Paternelle-Vie, Union des Assurances de Paris-Vie and Caisse 
d’Assurance et de Prévoyance Mutuelle des Agriculteurs v Ministère 
de l’Agriculture et de la Pêche [1995] ECR I-4013.

646

)  Cases  C-115  to  117/97  Brentjen’s  [1999]  ECR  I-6025;  Case  C-219/97 
Bokken BV [1999] ECR I-6121; Case C-67/96 Albany [1999] ECR I-5751.

in a sectoral manner through agreement between 
social  partners. Was  the  obligation,  sanctioned  by 
the public authorities, for companies from the sec-
tor  to  affiliate  their  employees  to  the  designated 
fund compatible with Community competition law? 
In its response, the CJ attaches great importance to 
the fact that the retirement fund was set up by the 
social partners, stating that such a scheme seeking 
to guarantee a certain level of pension for all workers 
in that sector and therefore contributing directly to 
improving one of their working conditions, namely 
their pay, does not fall within the scope of Article 85 
of the Treaty. That said, because the scheme operates 
according to the system of capitalisation, the CJ con-
siders that the fund which manages it is an undertak-
ing  within  the  meaning  of  Articles  85  and  following 
of the Treaty. The monopolistic situation is not, how-
ever,  in  dispute  since  ‘the  supplementary  pension 
scheme managed exclusively by the fund displays a 
high level of solidarity resulting, in particular, from 
the  fact  that  contributions  do  not  reflect  the  risk 
from the obligation to accept all workers without a 
prior  medical  examination,  the  continuing  accrual 
of pension rights despite exemption from the pay-
ment of contributions in the event of incapacity for 
work, the discharge by the fund of arrears of contri-
butions due from an employer in the event of insol-
vency and the indexing of the amount of pensions 
in order to maintain their value’. Consequently, ‘the 
removal of the exclusive right conferred on the fund 
might make it impossible for it to perform the tasks 
of general economic interest entrusted to it under 
economically  acceptable  conditions  and  threaten 
its  financial  equilibrium’.  In  the  context  of  another 
Dutch sectoral supplementary retirement fund made 
compulsory  by  the  decision  of  the  public  authorities 
for all specialist doctors, the CJ also ruled that such a 
pension  fund,  ‘which  itself  determines  the  amount 
of the contributions and benefits and operates on 
the  basis  of  the  principle  of  capitalisation,  which 
has been made responsible for managing a supple-
mentary  pension  scheme  set  up  by  a  profession’s 
representative body and membership of which has 
been made compulsory by the public authorities for 
all  members  of  that  profession,  is  an  undertaking 

142

Jean-Philippe Lhernould

within the meaning of Articles 85, 86 and 90 of the 
Treaty’. However, ‘Articles 86 and 90 of the Treaty do 
not preclude the public authorities from conferring 
on a pension fund the exclusive right to manage a 
supplementary  pension  scheme  for  the  members 
of a profession’ (647).

The  identity  of  social  security  has  also  been  rein-
forced  by  analysis  of  the  case-law  on  ‘insurance’ 
directives. The  question  posed  was,  in  substance, 
whether the monopoly of the social security bod-
ies  responsible  for  managing  sickness  and  mater-
nity  insurance  for  freelance  workers  in  France  is 
compatible  with  Article  2(2)  of  Directive  92/49  of 
18  June  1992  on  the  coordination  of  laws,  regu-
lations  and  administrative  provisions  relating  to 
direct  insurance  other  than  life  assurance,  which 
excludes  from  its  scope  of  application  insurance 
as  part  of  a  statutory  social  security  scheme. The 
CJ’s response was negative, stipulating that ‘secu-
rity  schemes  such  as  those  at  issue  in  the  main 
proceedings,  which  are  based  on  the  principle 
of  solidarity,  require  compulsory  contributions 
in  order  to  ensure  that  the  principle  of  solidarity 
is  applied  and  that  their  financial  equilibrium  is 
maintained. If Article 2 of Directive 92/49/EEC were 
to be interpreted in the manner contemplated by 
the national tribunal, the obligation to contribute 
would  be  removed  and  the  schemes  in  question 
would thus be unable to survive’ (648).

Conversely,  ‘insurance  undertakings  covering  the 
risk of accidents at work remain within the scope of 
Directive 92/49, even in the context of a statutory 
scheme  of  social  security,  where  those  undertak-
ings operate at their own risk with a view to profit, 
which  is  true  of  insurance  in  relation  to  accidents 
at  work  in  Belgium’ (649).  The  ‘insurance’  directive 
can therefore cover social security schemes which 
also come under the scope of Regulation (EEC) No 
1408/71.

The reasoning of the CJ, based on the principle of 
solidarity,  extends  to  the  law  on  agreements.  The 
question was also put to it of whether, in order to 
control  the  increase  in  the  cost  of  expenditure  on 
the statutory sickness insurance scheme, a law could 
require  the  sickness  insurance  fund  federations  of 
the country in question (Germany) to fix maximum 
amounts  for  their  contribution  towards  the  cost 
of  medication  and  healthcare  materials.  In  other 
words, does this situation amount to an agreement 
once the sickness insurance funds, although statu-
tory public bodies, are in a situation of competition 
as regards the rate of contributions for the purpose 
of  attracting  the  compulsory  members  as  well  as 
the  voluntary  members,  since  German  law  states 
that the members are free to choose their sickness 
fund? According to the CJ, ‘like the bodies at issue 
in Poucet and Pistre, cited above, the sickness funds 
of the German statutory sickness insurance scheme 
are involved in the management of the social secu-
rity system. In this regard they fulfil an exclusively 
social  function,  which  is  founded  on  the  principle 
of national solidarity and is entirely non-profit-mak-
ing. It is to be noted in particular that the sickness 
funds are compelled by law to offer to their mem-
bers essentially identical obligatory benefits which 
do not depend on the amount of the contributions. 
The  funds  therefore  have  no  possibility  of  influ-
ence  over  those  benefits’.  Consequently, ‘since  the 
activities  of  bodies  such  as  the  sickness  funds  are 
not economic in nature, those bodies do not con-
stitute undertakings within the meaning of Articles 
81 EC and 82 EC’. And the CJ adds that ‘in determin-
ing those fixed maximum amounts, the fund asso-
ciations do not pursue a specific interest separable 
from the exclusively social objective of the sickness 
funds. On the contrary, in making such a determi-
nation, the fund associations perform an obligation 
which  is  integrally  connected  with  the  activity  of 
the sickness funds within the framework of the Ger-
man statutory health insurance scheme’ (650).

(

(

(

647

)  Cases C-180 to 184/98 Pavlov [2000] ECR I-6451.

648

)  Case C-238/94 Garcia [1996] ECR I-1673.

650(

)  Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband 

649

)  Case C-206/98 Commission v Belgium [2000] ECR I-3509.

and Others [2004] ECR I-2493. 

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Past – Present – Future

The  issue  is  similar  in  a  case  between  the  Spanish 
federation of scientific, medical, technical and dental 
instrument suppliers (FENIN) and the European Com-
mission  as  regards  the  application  of  the  competi-
tion rules to organisations managing a health offer 
in  the  form  of  a  national  health  service. The  Span-
ish  business  federation,  made  up  of  the  suppliers 
of  the  national  hospital  system,  complained  to  the 
Commission  that  the  national  health  service  man-
agement  bodies  regularly  settled  their  debts  with 
an  average  delay  of  300  days,  whereas  they  were 
settling their other debts to other service suppliers 
within more reasonable periods. The member com-
panies of this federation adjudged themselves to be 
the victims of discrimination linked to the dominant 
position  of  the  national  health  system  administra-
tors  on  the  Spanish  healthcare  product  market.  In 
rejecting the petition, the Court of First Instance of 
the  European  Communities  held  that  the  national 
health  service ‘operates  according  to  the  principle 
of solidarity in that it is funded from social security 
contributions and other state funding and provides 
services free of charge to its members on the basis 
of universal cover, and that the SNS [Spanish health 
service]  management  bodies  do  not,  therefore,  act 
as  undertakings  in  their  activity  of  managing  the 
health  system’ (651).  Moreover,  the  SNS  management 
bodies  cannot  be  regarded  as  undertakings  within 
the meaning of Community competition law, either 
where  they  participate  in  the  management  of  the 
public health service, or in their capacity as purchas-
ers  for  it.  Ruling  under  appeal,  the  CJ  rejected  the 
appeal in adjudging that the Court of First Instance 
had rightly held that in Community competition law 
the  definition  of  an ‘undertaking’  covers  any  entity 
engaged  in  an  economic  activity,  regardless  of  the 
legal status of that entity and the way in which it is 
financed. It is the activity consisting in offering goods 
and  services  on  a  given  market  that  is  the  charac-
teristic feature of an economic activity. However, in 
the case in point, the management bodies carry out 
activities of a purely social nature and contribute to 

national solidarity. In the CJ’s view, there is no cause 
to disassociate the purchasing activities of the man-
agement bodies, which according to the FENIN were 
economic,  from  the  subsequent  use  to  which  they 
are  put.  Since  they  are  not  acting  as  undertakings 
when  purchasing  healthcare  products  from  FENIN 
members, the management bodies are not covered 
by Community competition law (652).

Finally,  the  principle  of  solidarity  was  deployed 
regarding the arrangement of the operating condi-
tions  of  a  social  assistance  scheme  which  was  sus-
pected  of  hindering  the  free  provision  of  services 
and the freedom of establishment. It concerned an 
Italian social assistance scheme that made the grant-
ing  of  approval  for  old  people’s  homes  conditional 
upon  their  being  managed  by  non-profit-making 
operators, a condition not fulfilled by a Luxembourg 
company  based  in  Italy.  In  the  view  of  the  CJ,  the 
‘system of social welfare, whose implementation is in 
principle entrusted to the public authorities, is based 
on the principle of solidarity, as reflected by the fact 
that it is designed as a matter of priority to assist those 
who are in a state of need owing to insufficient family 
income, total or partial lack of independence or the 
risk of being marginalised, and only then, within the 
limits imposed by the capacity of the establishments 
and resources available, to assist other persons who 
are,  however,  required  to  bear  the  costs  thereof,  to 
an extent commensurate with their financial means, 
in  accordance  with  scales  determined  by  reference 
to family income’. It concludes from this that ‘as Com-
munity law stands at present, a Member State may, 
in  the  exercise  of  the  powers  it  retains  to  organize 
its social security system, consider that a social wel-
fare  system  (…)  necessarily  implies,  with  a  view  to 
attaining its objectives, that the admission of private 
operators to that system as providers of social wel-
fare services is to be made subject to the condition 
that  they  are  non-profit-making’.  Consequently,  ‘the 
non-profit condition cannot be regarded as contrary 
to Articles 52 and 58 of the Treaty’ (653).

(

651

)  Court of First Instance Case T-319/99 FENIN [2003] ECR II-357

(

(

652

)  Case C-205/03 P FENIN v Commission [2006] ECR I-6295.

653

)  Case C-70/95 Sodemare [1997] ECR I-3395.

144

Jean-Philippe Lhernould

b.  Solidarity, social security and social 

services of general interest

The original nature of social security was highlighted 
during  the  course  of  the  discussions  on  services  of 
general  interest (654).  For  example,  the  question  was 
asked  whether  social  security  is  a  social  service  of 
general  interest  in  itself.  Directive  2006/123/EC  of 
12  December  2006  on  the  services  in  the  internal 
market in this respect echoes the case-law of the CJ, 
even if it does not use the term ‘solidarity’ with regard 
to  social  security (655).  The  directive,  which  aims  to 
facilitate the free provision of services and the free-
dom of establishment within the EU, ‘does not affect 
Member  States’  social  security  legislation’ (656).  This 
confirms the analysis in the case-law of the concept 
of ‘economic activity’: to determine whether certain 
activities, particularly those which are funded by the 
public authorities or provided by public bodies, con-
stitute  a ‘service’,  it  is  appropriate  to  examine  them 
case  by  case  and  to  take  all  of  their  characteristics 
into  account,  most  notably  the  way  in  which  they 
are provided, organised and funded in the Member 
State concerned. However, ‘the essential characteris-
tic of remuneration lies in the fact that it constitutes 
consideration  for  the  services  in  question  and  has 
recognised  that  the  characteristic  of  remuneration 
is absent in the case of activities performed, for no 
consideration, by the state or on behalf of the state 
in the context of its duties in the social, cultural, edu-
cational and judicial fields, such as courses provided 
under  the  national  education  system,  or  the  man-
agement  of  social  security  schemes  which  do  not 
engage in economic activity. (…) These activities are, 
therefore, not covered by the definition of service in 
Article 50 of the Treaty and do not therefore fall with-
in  the  scope  of  this  directive’  (preamble,  point  34). 
Similarly, the concept of ‘overriding reasons relating 
to  the  public  interest’,  to  which  reference  is  made 

654(

)  General  interest  services  are  defined  as  ‘market  and  non-market 
services which the public authorities class as being of general interest 
and  subject  to  specific  public  service  obligations’,  White  Paper  on 
services of general interest (COM(2004) 374 final).

655(

)  Whereas  it  is  used  for  other  social  services,  see  preamble  to  the 

directive, point 27.

656(

)  Preamble, point 14 and Article 1(6).

in certain provisions of this directive and which has 
been developed by the CJ, covers at least the social 
protection  of  workers  and  the  preservation  of  the 
financial balance of the social security system (pre-
amble, point 40, and Article 4, para. 8).

The European Commission also establishes the spe-
cial role of social security within services of general 
interest.  In  a  communication  of  26  April  2006 (657), 
it  classes  in  the  concept  of  ‘social  services’  ‘statu-
tory  and  complementary  social  security  schemes, 
organised  in  various  ways  (mutual  or  occupational 
organisations),  covering  the  main  risks  of  life,  such 
as those linked to health, ageing, occupational acci-
dents,  unemployment,  retirement  and  disability’. 
Although, under Community law, social services do 
not  constitute  a  legally  distinct  category  of  service 
within services of general interest, they present par-
ticular characteristics such as the fact that they ‘oper-
ate on the basis of the solidarity principle, which is 
required, in particular, by the non-selection of risks 
or the absence, on an individual basis, of equivalence 
between contributions and benefits’ or the fact that 
‘they are not for profit and in particular address the 
most difficult situations and are often part of a his-
torical legacy’. They can thus be distinguished from 
economic services of general interest (ESGI), even if 
the practical distinction between economic and non-
economic services is not straightforward: ‘it is not the 
sector or the status of an entity carrying out a serv-
ice  (e.g.  whether  the  body  is  a  public  undertaking, 
private undertaking, association of undertakings or 
part of the administration of the state), nor the way 
in which it is funded, which determines whether its 
activities  are  deemed  economic  or  non-economic; 
it is the nature of the activity itself’ (658). Admittedly, 
one  might  regret  the  fact  that  the  complementary 
schemes  are  all  identified  as  operating  on  the  soli-
darity principle, which is an imprecise generalisation, 
but at least social security is identified on the basis of 
elements of solidarity.

657(
) 

658(
) 

‘Implementing the Community Lisbon programme: Social services of 
general interest in the European Union’ (COM(2006) 177 final).

In  this  sense,  the  communication  of  the  Commission  ‘Services  of 
general  interest,  including  social  services  of  general  interest:  a  new 
European commitment’, 20 November 2007 (COM(2007) 725 final).

145

50 years of Social Security Coordination 

Past – Present – Future

So the internal market makes it possible to reveal a 
notion  of  social  security  anchored  in  the  principle 
of  solidarity.  Could  this  constitute  the  visible com-
mon  frame  of  reference  for  tomorrow’s  coordina-
tion rules? 

III.  Tomorrow’S 

CoordInaTIon ruleS 
STruCTured around 
SolIdarIT y?

Although  the  coordination  rules  are  sophisticat-
ed  in  the  extreme,  as  befits  the  complexity  of  the 
objectives set for them, they suffer from a deficit of 
affection. The  engineering  overrides  the  ideal,  but 
the  technical  side  is  not  appealing,  as  it  does  not 
convey any transcendent project and fails to excite 
people. Put more plainly, it does not interest those 
who make the decisions.

In  order  to  give  the  coordination  regulations 
renewed  meaning,  would  it  not  be  necessary  to 
marginalise the formal approach to social security 
and instead encourage the blossoming of a concep-
tual  will?  Within  this  framework,  the  coordination 
regulations  would  have  the  aim  of  coordinating 
social security schemes and benefits based on prin-
ciples of solidarity. Article 42 of the EC Treaty allows 
full  latitude  in  this  respect,  as  it  merely  indicates 
that the Council shall adopt such measures ‘in the 
field of social security’ as are necessary to provide 
freedom of movement for workers. Since it gives no 
definition of social security, it does not prevent the 
construction  of  the  coordination  rules  around  the 
notion of social security.

Is this prospect unattainable? Perhaps not, as recent 
CJ  case-law  on  the  subject  of  coordination  can 
be  read  as  the  recognition  of  an  unbreakable  link 
between  social  security  and  solidarity  (A). The  next 
stage would be a formal link, in the coordination reg-
ulations, between social security and solidarity (B).

a. 

Is the solidarity-based social security 
which is emerging from case-law 
applicable to the coordination rules?

The  Bosmann  judgment,  which  has  already  been 
referred to above, is worthy of special attention as 
it can be seen as the point of entry to a new para-
digm;  a  paradigm  that  is  not  unconnected  to  the 
notion  of  social  security.  In  the  Bosmann  case,  the 
dispute arose from the fact that the mother of the 
family, a Belgian national resident in Germany with 
her children, had lost entitlement to German family 
benefits for the reason that Dutch law had become 
competent  on  the  day  on  which  she  had  found 
employment  on  the  other  side  of  the  border,  in 
the Netherlands. However, Dutch law did not make 
provision for the payment of benefits in the family 
situation in which she found herself (659). For the CJ, 
Regulation  (EEC)  No  1408/71 ‘does  not  preclude  a 
migrant  worker,  who  is  subject  to  the  social  secu-
rity  scheme  of  the  Member  State  of  employment, 
from receiving, pursuant to the national legislation 
of  the  Member  State  of  residence,  child  benefit  in 
the latter state’. It is Article 42 of the EC Treaty which 
supports this interpretation: ‘the provisions of Reg-
ulation  (EEC)  No  1408/71  must  be  interpreted  in 
the  light  of  Article  42  EC  which  aims  to  facilitate 
freedom  of  movement  for  workers  and  entails,  in 
particular, that migrant workers must not lose their 
right to social security benefits or have the amount 
of those benefits reduced because they have exer-
cised the right to freedom of movement conferred 
on them by the Treaty’.

While the reasoning behind the judgment might be 
questionable, there arises from it the germination of 
a new method which consists of taking into account 
the  effectiveness  of  the  law  vis-à-vis  the  benefits 
available in Member States and the level of benefits 
in order to settle conflicts between laws, or even to 
establish  cooperation  between  applicable  bodies 
of legislation. Such a system lays claim to a logic of 
‘social progress’ promoted by the EC Treaty, a logic 

(

659

)  Her children had exceeded the age condition set by Dutch law.

146

Jean-Philippe Lhernould

also enshrined in the preamble to Regulation (EEC) 
No 1408/71 and Regulation (EC) No 883/2004, which 
should  help  to  improve  the  standard  of  living  and 
working  conditions  of  mobile  persons.  However, 
the logic of social progress is a form of expression of 
the principle of solidarity which the CJ promotes in 
the Poucet and Pistre judgments. Going further still, 
the  Bosmann  judgment  suggests  that  coordinat-
ing national social security schemes that share the 
common point of solidarity constitutes the extrapo-
lation of solidarity in the order of international rela-
tions.  This  avoids  the  fact  that  these  relations  are 
characterised by a financial and human withdrawal 
from reality on the part of the national schemes, a 
compartmentalisation  in  contradiction  with  social 
security’s purpose of solidarity.

it 

With  the  Bosmann  judgment, 
is  solidarity 
between  states  (only  those  with  which  a  person 
possesses points of connection, to borrow a term 
from international private law) which is unveiled, 
with one being called upon to compensate for the 
shortcomings and weaknesses of another in order 
to  guarantee  the  best  possible  social  cover  or,  at 
the very least, acceptable cover. This form of inter-
state  solidarity  is  also  destined  to  call  into  ques-
tion a brutal and unpopular piece of case-law that, 
apart  from  the  coordination  regulation  experts, 
nobody understands, whereby coordination ‘does 
not  guarantee  that  the  extension  of  a  person’s 
activities in more than one Member State is neu-
tral as regards social security. Given the disparities 
in  the  social  security  legislation  of  the  Member 
States, such an extension or transfer may be to the 
worker’s  advantage  in  terms  of  social  security  or 
not, according to circumstance’ (660).

The  solidarity  of  the  Bosmann  judgment  is  the 
transnational  image  of  a  form  of  internal  solidar-
ity specific to social security, which the CJ has long 
since  underlined  in  its  judgments  on  the  internal 
market, embodied by support for persons who are 
vulnerable on account of their state of health, their 

financial status, their work situation, their age, their 
family  situation,  their  way  of  living,  etc.  It  is  this 
internal  solidarity  within  the  national  social  secu-
rity schemes which also needs to be reflected in the 
coordination regulations.

b.  Formalised solidarity in the 

coordination regulations: from 
symbols to concrete achievements

First of all, it should be said that it would be an error 
to  believe  that  the  aim  of  solidarity  shared  by  the 
national social security schemes is alien to the cur-
rent coordination regulations. In fact, it constitutes 
an  invisible  unifying  theme  around  which,  since 
1958 (when the first coordination regulations were 
introduced),  the  national  coordinated  social  secu-
rity  schemes  have  coalesced.  The  social  security 
schemes  protected  by  the  CJ  against  the  applica-
tion  of  the  rules  of  Community  law  are,  in  effect, 
more  or  less  those  which  are  also  found  in  the 
coordination regulations, at least if one stops at the 
schemes with a statutory origin. The CJ also made 
the  link  between  coordination  and  solidarity  in  a 
case where the monopolistic situation of a body in 
charge of Italy’s statutory insurance scheme against 
accidents  at  work  and  occupational  diseases  was 
contested:  the  notion  of  undertaking,  within  the 
meaning  of  Articles  81  and  82  of  the  EC  Treaty, 
does not apply to this body because, in particular, 
‘Regulation  (EC)  No  118/97  […]  contains  specific 
provisions  for  coordinating  national  schemes  on 
accidents  at  work  and  occupational  diseases,  for 
the application of which, in the case of the  Italian 
Republic, INAIL is expressly designated as the com-
petent  institution’ (661).  One  might  add  that  certain 
schemes  (such  as  the  ARRCO-AGIRC  scheme  in 
France) of a contractual nature have been integrat-
ed  into  the  coordination  regulations  due  to  their 
solidarity-based nature.

The issue here is to know how to make this unifying 
link between social security schemes and solidarity 

(

660

)  Cases C-393/99 and C394/99 Hervein e.a. [2002] ECR I-2829. 

661(

)  Court of Justice, 22 January 2002, see above.

147

50 years of Social Security Coordination 

Past – Present – Future

visible;  how  to  promote  it  and  for  what  purposes. 
In  our  view,  the  aims  should  be  both  symbolic 
and functional, a duality echoed in the concept of 
notion presented in this study’s introduction.

•	

At  the  symbols’  stage,  it  would  be  a  question  of 
creating  a ‘billboard  effect’  in  the  preamble  to  the 
regulation. By placing coordination under the aus-
pices  of  social  security  schemes  with  a  common 
aim of solidarity in the sense developed by CJ case-
law,  coordination  would  be  given  new  impetus. 
Coordination  would  admittedly  continue  to  play 
the role of an instrument for the free movement of 
persons, but it would have an identity, its own force, 
a dynamic: after all, solidarity is not only a status to 
be  preserved,  a  commitment  to  be  expressed  and 
defended, but also an objective to be achieved. In 
other words, solidarity is not only a common iden-
tity  uniting  the  national  social  security  systems  of 
the  Member  States  and  which  is  worthy  of  being 
enshrined  in  the  most  important  Community  text 
devoted  to  social  security,  but  it  is  also  what  they 
should  be  striving  towards.  At  a  time  when  social 
security  systems  are  having  to  ‘modernise’ (662),  a 
term rife with ambiguity, is it not necessary to recall 
the existence of an untouchable foundation? Estab-
lishing solidarity at the forefront of the coordination 
regulations amounts to declaring Europe’s commit-
ment to solidarity-based social security.

At  the  operational  stage,  there  are  no  profound 
upheavals  expected,  but  certain  opportunities  to 
be  created.  For  example,  the  reference  point  of 
solidarity could help us to see coordination in a dif-
ferent  way  and  to  develop  the  coordination  regu-
lations on blocking points by opening up horizons 
which  at  the  moment  seem  inaccessible. The  four 
key initiatives (663) below could then be instigated.

662(

)  Reference  to  the  communication  from  the  European  Commission, 
‘Modernising social protection for greater social justice and economic 
cohesion: taking forward the active inclusion of people furthest from 
the labour market’ (COM(2007) 620 final).

663(

)  Other questions, to respond to the CJ, merit rereading: status of the 
provisions  for  victims  of  war,  residence  clause  scheme  (particularly 
for  unemployment  benefits),  structuring  with  Regulation  (EEC)  No 
1612/68, etc.

(

(

(

(

148

•	

The  scope  of  application  of  the  regulation 
could  be  rethought.  In  particular,  the  failure 
of  the  proposal  for  a  directive  ‘on  improv-
ing  the  portability  of  supplementary  pension 
rights’ (664),  even  relieved  of  its  substance  fol-
lowing the transformation by the Commission 
into the proposal for a directive on ‘minimum 
requirements  for  enhancing  worker  mobility 
by improving the acquisition and preservation 
of supplementary pension rights’ (665), suggests 
making  a  place  for  supplementary  pension 
schemes  based  on  principles  of  solidarity  in 
the coordination regulations, even when it is a 
case of solidarity of professional level. The pre-
amble to Directive 98/49/EC declares that ‘the 
system  of  coordination  provided  for  in  Regu-
lation  (EEC)  No  1408/71  and  Regulation  (EEC)  
No 574/72, and in particular the rules of aggre-
gation,  are  not  appropriate  to  supplementary 
pension schemes’. Does this not underestimate 
the  capacity  for  adaptation  and  the  creativity 
of the coordination regulations, especially at a 
time  when  the  statutory  retirement  schemes 
of  several  countries  are  adopting  notional 
accounts  based  on  point  systems (666)?  In  any 
case, including supplementary schemes in the 
coordination regulations would give the latter 
credibility, as coordinating a one-legged social 
security does not do justice to the formidable 
European success that is social security.
The  delivery  of  cross-border  healthcare  could 
be redrawn, as the initiative of a special direc-
tive fed by the free provision of services (667) is 
not coherent. This proposal for a directive weak-
ens the coordination rules at the same time as 
it serves citizens, through the complexity and 

664

)  Presented by the Commission on 20 October 2005 (COM(2005) 507 

final).

665

)  Presented  by  the  Commission  on  9  October  2007  (COM(2007)  603 

final).

666

)  On  the  periphery,  certain  company  schemes  could  remain  beyond 
the  scope  of  coordination,  due  to  being  irreducible  to  the  latter’s 
mechanisms.  Even  for  these  schemes,  however,  another  more 
voluntary  attitude  might  be  envisaged,  consisting  of  forcing  their 
integration 
involve  the  prior 
adaptation of the aforementioned schemes.

into  coordination,  which  would 

667

)  See the current proposal for a directive on the application of patients’ 
rights to cross-border healthcare, 2 July 2008 (COM(2008) 414 final).

Jean-Philippe Lhernould

opacity  that  it  engenders.  Provided  that  they 
are  covered  by  solidarity-based  social  secu-
rity  schemes,  cross-border  healthcare  should 
be fully available, as regards the conditions of 
its  delivery,  by  the  coordination  regulations 
and should not be rejected towards a parallel 
directive.
The rules on conflicting laws could be re-exam-
ined.  In  particular,  it  might  be  a  question  of 
reworking,  in  the  light  of  the  Bosmann  judg-
ment, the principle of unicity and rethinking it 
in  the  light  of  the  aims  of  social  progress  and 
solidarity.
Lastly, concerning the social security of inactive 
mobile citizens, the aim would be to formalise, 
in  situations  of  conflict  of  sources,  the  prec-
edence  of  the  coordination  regulations  over 
Directive  2004/38/EC,  which  is  anti-solidarity 
par excellence.

•	

•	

Beyond these areas of work, moving the coordina-
tion regulations from the stage of a technical system 
to that of a mouthpiece for a fundamental principle 
inherent in the European social model would make 
it possible to compete on a more level playing field 
against parallel sources which defend other funda-
mental  principles  —  citizenship  of  the  Union,  free 
provision of services, free movement of persons, etc. 
Then,  we  might  hope  that  the  Community  judge 
would  once  again  be  inspired  by  the  coordination 
regulations and the spirit that drives them… 

Iv.  ConCluSIonS

It  is  paradoxical  to  observe  that  it  is  these  condi-
tions of operation of the internal market which pro-
mote the notion of social security, even though the 
internal  market,  as  shown  in  particular  in  the  dis-
cussions  on  the ‘services’  directive,  is  regarded  by 
public opinion as the reflection of a neo-liberal or 
even anti-solidarity vision of Europe.

In order for the coordination rules to again exert their 
influence within the Community’s legal order, one of 
the paths to be followed is to promote the principle 
of solidarity that is an integral part of social security. 
In this way, the coordination rules will rediscover the 
role of driving force that they originally had in the 
construction of the common market.

Not everyone may agree with the paths proposed, 
citing a potential lack of realism if resituated in the 
legal and political context of the European Union. 
But beyond the imagined solutions, it is the finding 
which needs to be emphasised and discussed: the 
coordination regulations are the victim of their own 
technical nature and lack of direction, due to having 
as their aim a form of social security destabilised by 
judges  and  Community  legislators.  In  this  respect, 
the  dynamism  of  the  internal  market,  even  if  the 
ideology  is  disputed,  is  a  model  to  be  followed  in 
order to restore to social security and coordination 
the unity that they crave.

149

50 years of Social Security Coordination 

Past – Present – Future

NE w PATTERNS OF migRATiON   
ANd  ChALLENgES  FOR ThE  FuTuRE

Paul Minderhoud (668)
Radboud University, Nijmegen (the Netherlands) 

Dr. Paul Minderhoud is an associate professor at the Centre for Migration Law 
of the Radboud University Nijmegen, the Netherlands. His doctoral thesis is a 
socio-legal study into the differences between immigrants and native citizens 
in  the  implementation  of  the  child  benefits  and  disability  insurance  legisla-
tion in the Netherlands: “Voor mij zijn ze allemaal gelijk”, (Amsterdam: Thesis 
Publishers 1993). His main research interests are the legal and socio-legal as-
pects of immigration and social security. He is project director of the European 
Network on Free Movement of Workers and co-editor of the European Journal 
of Migration and Law. For publications see his personal website: www.ru.nl/
rechten/minderhoud

I. 

InTroduCTIon  

The total population of the EU is now some 490 mil-
lion persons.

As a result of various shifts in demographic features 
of the EU population, and of the withdrawal from 
the  labour  market  of  the  baby  boomers  cohort, 
the working-age population will face, in the com-
ing years, a sizeable decline. This will have adverse 
relating  to  pension  expenses,  
consequences 
health spending and long-term care, dependency 
ratio and more broadly to the dynamism of econo-
my. According to the latest population projections 
produced  by  Eurostat,  by  2060,  the  working-age 
population of the EU is projected to fall by almost 
50  million  even  with  continued  net  immigration 
similar  to  historical  levels.  By  2060,  without  such 
immigration,  the  working-age  population  would 
be  around  110  million  lower  than  today,  which 
would mean that in the EU, overall, the number of 

people over 65 per person at working age would 
more than double by 2060. Against this backdrop, 
migration  has  thus  become  a  major  determinant 
of demographic evolution in the EU since, in recent 
years,  it  has  outweighed  the  contribution  from 
natural change. However, the most important con-
tribution  of  immigration  to  the  EU  economy  and 
competitiveness will be to help, alongside and as 
an  essential  complement  of  the  Lisbon  strategy 
for  growth  and  jobs,  to  fill  in  arising  and  future 
labour  and  skill  gaps  on  the  EU  labour  markets. 
It  is  crucial  in  this  respect  to  underline  that  the 
fall in the working-age population shall not auto-
matically mean that there should be an equivalent 
number  of  immigrants  to  fill  in  the  gap:  such  a 
high level of immigration would be unrealistic and 
impose a severe strain on EU societies and econo-
mies. Furthermore, in the EU, the determination of 
the volumes of labour immigrants to be admitted 
remains  the  full  responsibility  of  the  individual 
Member States (669).

(

668

)  Centre  for  Migration 

law,  Radboud  University  Nijmegen,  the 

(

669

)  See  ‘A  common  immigration  policy  for  Europe’,  17  June  2008, 

Netherlands.

MEMO/08/402.

150

Paul Minderhoud

The  former  Commissioner  for  Justice,  Freedom 
and  Security,  Franco  Frattini,  emphasised  in  2007 
that the EU needs immigration. But he also warned 
that immigration alone is not the solution  to age-
ing  populations.  Higher  net  immigration  will  not 
exempt  European  policymakers  from  implement-
ing structural and other changes if they are to cope 
with  the  impact  of  ageing  populations,  which  is  a 
challenge not to be underestimated (670).

a.  Some more figures

In  2006,  about  three  million  foreign  immigrants 
settled  in  a  country  in  the  27  EU  Member  States 
(EU-27). These immigrants can be divided into two 
groups  based  on  their  citizenship:  citizens  of  the 
EU-27 (1.2 million persons) and non-EU-27 citizens 
(1.8 million) (671).

EU-27 citizens migrating to another Member State 
accounted  for  40  %  of  foreign  immigrants.  The 
remaining 60 % of foreign immigrants were almost 
equally  divided  between  citizens  of  countries  in 
Europe  outside  the  EU-27,  and  Asia,  the  United 
States and Africa.

Luxembourg  (28.8  foreign  immigrants  per  1  000 
inhabitants),  Ireland  (19.6),  Cyprus  (18.7),  Spain 
(18.1)  and  Austria  (10.3),  compared  with  an  EU-27 
average of 6.2 foreign immigrants per 1 000 inhab-
itants. In Poland, Romania, Lithuania and Latvia the 
rates  were  1  foreign  immigrant  per  1  000  inhabit-
ants or less.

In 17 of the 24 Member States for which data were 
available, a majority of the foreign immigrants were 
non-EU-27 citizens. The highest share was registered 
in Slovenia (90 %), Romania (86 %), Portugal (84 %) 
and  the  Czech  Republic  (83  %).  In  seven  Member 
States  a  majority  of  the  foreign  immigrants  were 
EU-27  citizens. These  Member  States  were  Luxem-
bourg (84 %), Ireland (77 %), Germany (57 %), Hun-
gary  and  Slovakia  (both  54  %),  Austria  (53  %)  and 
Belgium (51 % in 2003).

In 2006, nationals from third countries represented 
around 3.8 % of the total population in the EU (672). 
This  is  twice  as  much  as  EU  citizens  residing  in 
another Member State.

b.  Three main issues

In 2006, the largest foreign immigrants’ group were 
citizens of Poland (about 290 000 persons), Roma-
nia (about 230 000), Morocco (about 140 000), the 
United  Kingdom,  Ukraine  and  China  (each  about 
100 000) and Germany (about 90 000).

The largest number of foreign immigrants in 2006 
was recorded in Spain (803 000 persons), Germany 
(558 500) and the United Kingdom (451 700), who 
together received 60 % of all foreign immigrants in 
the EU-27.

When compared with the population in the Mem-
ber  State  of  destination,  the  highest  rate  of  for-
eign  immigration  in  the  EU-27  was  recorded  in 

Against  the  background  of  these  demographic 
developments  and  the  Lisbon  objective  to  make 
the  EU  the  world’s  most  competitive  economy, 
three  important  issues  will  be  addressed  in  this 
paper.  Firstly,  the  next  section  will  deal  with  the 
state  of  affairs  and  consequences  of  the  recent 
enlargement rounds of 2004 and 2007.

Secondly,  I  will  pay  attention  to  the  European 
migration  policy  as  it  has  developed  over  the  last 
10 years. The emphasis will be in the field of labour 
migration, which for a long time has been consid-
ered  an  exclusively  national  issue  by  the  Member 
States,  but  where  European  rules  are  now  slowly 
being accepted.

(

(

670

)  Speech/07/91,  Frattini, ‘The  future  of  EU  migration  and  integration 

policy’, London School of Economics, 23 February 2007.

671

)  See  Eurostat,  ‘Recent  migration  trends:  Citizens  of  EU-27  Member 
States become ever more mobile while EU remains attractive to non-
EU citizens’, Statistics in Focus 98/2008.

672(

)  On  1  January  2006,  there  were  18.5  million  third-country  nationals 
resident  in  the  EU.  Many  of  these  third-country  nationals  are  not 
themselves immigrants but descendants of immigrants who have not 
taken citizenship of their country of residence. See COM(2007) 539

151

50 years of Social Security Coordination 

Past – Present – Future

An interesting part of the European migration poli-
cy is constituted by the so-called ‘global approach’, 
the third main issue of this paper. In the context of 
this global approach, increasing attention is being 
paid  to  the  phenomenon  of  circular  migration.  As 
already  mentioned  I  will  concentrate  on  labour 
migration and I will try to give special attention to 
the social security aspects of some developments, 
given the framework of this conference. 

II.  enlargemenT

An  important  event  affecting  the  free  movement 
of  workers  in  the  EU  and  creating  new  patterns 
of  migration  was  the  enlargement  of  the  EU  from 
15 to 25 Member States on 1 May 2004 and to 27 
Member States on 1 January 2007. The accession of 
the EU-10 and EU-2 Member States led and leads to 
new migration flows across Europe (673).

The fundamental right of free movement of work-
ers  was  restricted  by  transitional  arrangements. 
The transitional period of both Accession Treaties 
(2003  and  2005)  has  a  maximum  of  seven  years. 
It  is  divided  into  three  phases  (‘2  plus  3  plus  2’ 
formula). The initial two-year period in which the 
national  law  of  the  other  Member  States  regu-
lates  the  access  of  workers  from  EU-8  and  EU-2 
has already come to an end. For the second phase 
of  three  years  Member  States  can  extend  their 
national measures. Restrictions should in principle 
end  with  the  second  phase.  However,  a  Member 
State which maintained national measures at  the 
end  of  the  second  phase  may,  in  case  of  serious 
disturbances of its labour market or threat thereof 
and  after  notifying  the  Commission,  continue  to 
apply these measures until the end of the seven-
year  period  following  the  date  of  accession.  The 
transitional arrangements will irrevocably end for 

Bulgaria and Romania on 31 December 2013 and 
for the EU-8 on 30 April 2011 (674).

a.  Enlargement of 2004

Thus, the transitional arrangements set out in the 
Accession Treaty of 2003 allow for limited deroga-
tions during a transitional period which will irrevo-
cably come to an end on 30 April 2011. The second 
phase regarding the EU-8 Member States has just 
ended  on  30  April  2009.  During  this  phase,  11  of 
the  EU-15  Member  States  opened  their  labour 
markets completely for workers of the EU-8 Mem-
ber States: the United Kingdom, Ireland and Swe-
den had already opened their labour markets from 
the  date  of  enlargement.  They  were  followed  by 
Spain,  Finland,  Greece  and  Portugal  as  of  1  May 
2006  and,  as  of  27  July  2006,  by  Italy.  The  Neth-
erlands  lifted  all  restrictions  as  of  1  May  2007, 
Luxembourg  as  of  1  November  2007  and  France 
as  of  1  July  2008. The  United  Kingdom  continues 
its mandatory registration scheme, and in Finland 
employment must subsequently be registered for 
monitoring purposes.

The  four  EU-15  Member  States  that  have  main-
tained restrictions have simplified their procedures 
or  have  reduced  restrictions  in  some  sectors/pro-
fessions (Austria, Belgium, Denmark and Germany). 
Belgium and Denmark lifted their restrictions as of 
1 May 2009.

Germany and Austria also maintain national measures 
in relation to the cross-border provision of services.

The three EU-8 Member States that initially applied 
reciprocal  measures  have  stopped  applying  them 
(Slovenia  on  25  May  2006,  Poland  on  17  January 
2007 and Hungary on 1 January 2009).

(

673
) 

‘EU-25 Member States’ means all Member States forming part of the 
EU before 1 January 2007. ‘EU-15 Member States’ means all Member 
States  forming  part  of  the  EU  before  1  May  2004. ‘EU-10  Member 
States’  means  all  states  that  joined  the  EU  on  1  May  2004.  ‘EU-8 
Member States’ means all EU-10 Member States except for Malta and 
Cyprus. ‘EU-2 Member States’ are Bulgaria and Romania together.

(

674

)  Communication from the Commission, ‘The impact of free movement 
of workers in the context of EU enlargement’, report on the first phase 
(1 January 2007–31 December 2008) of the transitional arrangements 
set out in the 2005 Accession Treaty and as requested according to 
the  transitional  arrangement  set  out  in  the  2003  Accession  Treaty 
(COM(2008) 765).

152

Paul Minderhoud

b.  Enlargement of 2007 (675)

At  the  beginning  of  2007,  Bulgaria  and  Romania 
acceded  to  the  Union.  The  accession  agreements 
with these two new Member States permit the  25 
other Member States to apply transitional arrange-
ments as regards free movement of workers which 
are  identical  in  content  to  those  applicable  to  the 
2004  Member  States  (excluding  Cyprus  and  Malta 
whose  nationals  have  free  movement  rights  as 
workers from accession).

During the first phase, which lasted from 1 January 
2007 to 31 December 2008, 10 EU-25 Member States 
(Czech  Republic,  Estonia,  Cyprus,  Latvia,  Lithua-
nia,  Poland,  Slovenia,  Slovakia,  Finland  and  Swe-
den) liberalised access of Bulgarian and Romanian 
workers to their labour markets under national law. 
Some  EU-8  Member  States  mentioned  disagree-
ment with the continued application of the transi-
tional regime to their workers in some of the EU-15 
Member  States  as  a  major  reason  for  allowing  full 
freedom of movement to Bulgarian and Romanian 
nationals (676).

These  countries  were  followed  by  Spain,  Greece, 
Hungary and Portugal as of 1 January 2009, when 
the  second  phase  started  and  by  Denmark  as  of 
1 May 2009 (677).

The  remaining  EU-25  Member  States  maintained 
work permit systems, albeit sometimes with modi-
fications and simplified procedures.

For  instance,  Malta  grants  work  permits  for  posi-
tions  that  require  qualified  and/or  experienced 
workers and for those occupations for which there 
is a shortage of workers. France applies a simplified 
procedure for 150 occupations where a work permit 

is issued without considering the job situation. Lux-
embourg has introduced simplified procedures for 
work in agriculture, viticulture, the hotel and cater-
ing sector and for people with specific qualifications 
for which there is a need in the financial sector. Bel-
gium  has  introduced  an  accelerated  procedure  of 
issuing  work  permits  within  five  days  for  jobs  in 
professions for which there is a labour shortage.

Italy does not require a work permit for employment 
in  certain  sectors  (agriculture,  hotel  and  tourism, 
domestic  work,  care  services,  construction,  engi-
neering,  managerial  and  highly  skilled  work,  sea-
sonal  work).  In  the  United  Kingdom,  the  employer 
must apply for a work permit (except for certain cat-
egories of employment) and the worker must apply 
for  an ‘Accession  worker  card’.  Low-skilled  workers 
are restricted to existing quota schemes in the agri-
cultural and food processing sectors; skilled workers 
can work if they qualify for a work permit, or under 
the ‘Highly skilled migrant programme’. In the Neth-
erlands, a work permit will be issued whenever there 
are no workers available in the Netherlands or other 
EU Member States and the employer concerned can 
offer  proper  working  conditions  and  accommoda-
tion. Temporary exemptions may be granted for sec-
tors in which there is a labour shortage.

Ireland  also  requires  work  permits.  In  addition  to 
maintaining  a  work  permit  requirement,  Austria 
and Germany also apply restrictions on the posting 
of workers in certain sectors.

By 31 December 2011 those Member States which 
are  still  applying  transitional  arrangements  as 
regards workers from the two countries must either 
lift them or justify why their continued application 
is  necessary  in  accordance  with  the  provisions  of 
the Accession Treaty.

(

(

675

)  Based on http://ec.europa.eu/social/main.jsp?catId=508&langId=en

676

)  See  Kees  Groenendijk,  Elspeth  Guild,  Roel  Fernhout,  Pieter  Boeles, 
Ryszard Cholewinski and Paul Minderhoud, European Report on the 
Free Movement of Workers in 27 EU Member States in 2007, Nijmegen, 
Centre for Migration Law, 2008.

(

677
) 

In Finland, Cyprus and Slovenia, employment must subsequently be 
registered for monitoring purposes.

Bulgaria and Romania, on their part, have decided 
not  to  restrict  access  to  their  labour  markets  for 
EU  nationals  from  those  EU-25  Member  States 
which apply restrictions for Bulgarian and Roma-
nian workers. 

153

50 years of Social Security Coordination 

Past – Present – Future

C.  Patterns of migration due to 

enlargement

In  November  2008  the  Commission  published  a 
report on the impact of free movement of workers 
in  the  context  of  EU  enlargement (678).  According 
to  this  report  the  exact  size  of  post-enlargement 
mobility  flows  is  difficult  to  determine  due  to 
shortcomings in the existing data and largely open 
borders  between  the  Member  States.  However, 
available  population  statistics  and  data  from  the 
EU  Labour  Force  Survey  suggest  that  the  number 
of Bulgarian and Romanian citizens resident in the 
EU-25  increased  from  around  690  000  at  the  end 
of 2003 to about 1.8 million at the end of 2007, a 
process  which  had  started  well  before  the  acces-
sion  of  both  countries  to  the  EU  in  January  2007. 
This  amounts  to  an  average  net  growth  of  about 
290  000  persons  per  year.  Romanians  accounted 
for  around  19  %  of  all  recent  intra-EU  migrants 
who  took  up  residence  in  another  EU  Member 
State over the past four years, Bulgarian citizens for 
about 4 %.

Their main EU destination country has been Spain, 
which  received  well  over  50  %  of  recent  intra-EU 
migrants  from  both  Bulgaria  and  Romania.  The 
second country receiving the most recent migrants 
from Romania has been Italy (around 25 %), with 
flows  to  other  Member  States  much  smaller  and 
nowhere  exceeding  2  %  of  the  total.  For  recent 
migrants from Bulgaria, the second main receiving 
country in the EU has been Germany (15 %), with 
Greece, Italy, France, the UK and Cyprus receiving 
most of the others in largely equal parts. While sig-
nificant  in  absolute  terms,  the  number  of  Bulgar-
ian  and  Romanian  citizens  appears  to  be  modest 
in relation to the overall population in the receiv-
ing countries.

678(

)  Communication from the Commission, ‘The impact of free movement 
of workers in the context of EU enlargement’, report on the first phase 
(1 January 2007–31 December 2008) of the transitional arrangements 
set out in the 2005 Accession Treaty and as requested according to 
the  transitional  arrangement  set  out  in  the  2003  Accession  Treaty 
(COM(2008) 765).

154

The number of nationals of other EU Member States 
having  registered  their  residence  in  Bulgaria  and 
Romania in 2007 was still relatively small (approxi-
mately 5 000 in Bulgaria and 9 000 in Romania) (679). 
But  this  number  is  rapidly  increasing.  The  latest 
official data released by the Romanian Immigration 
Office  (ORI)  show  that  24  000  citizens  from  other 
EU countries are currently living in Romania (680). 

At  a  macro-level,  enlargement  has  had  no  signifi-
cant  impact  on  changes  on  the  labour  market  in 
total.  According  to  the  Commission’s  report,  post-
enlargement mobility (and recent intra-EU mobility 
in general) shows that a large part of it appears to 
be temporary. Evidence from some Member States 
indicates that many mobile workers go to another 
Member  State  for  a  limited  period  of  time,  but  do 
not intend to stay forever. Data from the UK suggest 
that around half of the EU-8 citizens who have come 
to work in the UK since 2004 may have already left 
the country again, with a similar picture emerging 
for Ireland (681).

The  British  Home  Office  recently  confirmed  that 
fewer people from Poland and other east European 
nations are coming to work in the UK and more for-
eigners are departing as the economy sinks deeper 
into recession. The Home Office said 26 815 people 
from  the  EU-8  Member  States  registered  to  work 
in the fourth quarter of 2008, which is down 53 % 
from the peak of 57 310 in the three months ending 
in  September  2007. ‘Research  suggests  that  many 
of those that came have now gone home,’ accord-
ing to Phil Woolas, the Labour government’s Immi-
gration Minister (682).

(

679

)  See  Kees  Groenendijk,  Elspeth  Guild,  Roel  Fernhout,  Pieter  Boeles, 
Ryszard Cholewinski and Paul Minderhoud, European Report on the 
Free Movement of Workers in 27 EU Member States in 2007, Nijmegen, 
Centre for Migration Law, 2008.

680(

)  See  http://www.financiarul.ro/2009/04/06/as-many-as-80000-foreign-

citizens-live-in-romania/ 

(

681

)  See  European  Commission,  Employment  in  Europe  2008,  Chapter 
3: ‘Geographical  labour  mobility  in  the  context  of  EU  enlargement’ 
(http://ec.europa.eu/social/main.jsp?catId=119&langId=en); 
and 
N.  Pollard,  M.  Lattorre  and  D.  Sriskandarajah  (2008),  Floodgates  or 
turnstiles?  Post  enlargement  migration  flows  to  (and  from)  the  UK, 
Institute for Public Policy Research.

(

682

)  The  Bloomberg  News,  24  February  2009  (http://www.bloomberg.

com/apps/news?pid=20601102&sid=aIbYXsxo1zMI&refer=uk).

Paul Minderhoud

The  fear  that  the  arrival  of  Romanians  and  Bul-
garians  would  lead  to  extra  job  losses  has  been 
unfounded, according to the Commission’s report. 
Economic migrants from the EU-8 and EU-2 Mem-
ber States have not led to any serious disturbances 
in the labour markets of other EU countries. In fact 
they have contributed to economic growth without 
pushing  out  local  workers  or  depressing  wages, 
according to the Commission.

On  the  other  hand,  the  regional  allocation  of 
migration  stocks  and  flows  across  the  EU-15  has 
changed since the EU enlargement. Sixty per cent 
of  the  EU-8  migrants  resided  before  the  enlarge-
ment  in  Germany  and  Austria.  But,  in  2007,  43  % 
of the EU-8 migrants resided in the UK and Ireland. 
More than 70 % of the net migration flows from the 
EU-8  Member  States  have  been  absorbed  by  the 
UK and Ireland since the enlargement. Seventy per 
cent of the migrants from Bulgaria and Romania in 
the  EU-15  moved  to  Germany  and  Austria  during 
the 1990s, but since  the beginning of this millen-
nium  countries  like  Spain  and  Italy  have  received 
80 % of the net migration flows from Bulgaria and 
Romania (683).

d.  Practical problems

Although the Commission’s report shows a positive 
image of enlargement at a macro-level, a closer look 
at  the  micro-level  reveals  some  problems  which 
cannot be denied.

The  2007  European  report  on  the  free  movement 
of  workers  in  27  EU  Member  States  mentions 
several  problems  of  (posted)  EU-8  workers  with 
substandard  employment  conditions,  substand-
ard  housing  conditions,  problems  with  access  to 
social  benefits  and  integration  facilities,  and  poor 
education  of  migrant  children (684).  The  legislative 

(

(

683

)  Herbert  Brücker,  Labour  mobility  within  the  EU:  Causes,  directions 
and constraints, ÖNB Conference: ‘The integration of European labor 
markets’, Vienna, 17–18 November 2008.

684

)  Kees Groenendijk, Elspeth Guild, Roel Fernhout, Pieter Boeles, Ryszard 
Cholewinski  and  Paul  Minderhoud,  European  Report  on  the  Free 
Movement  of Workers  in  27  EU  Member  States  in  2007,  Nijmegen, 
Centre for Migration Law, 2008

measures  against  those  practices  are  rather  inef-
fective according to the report. A number of ques-
tions  emerge  regarding  the  proper  application  of 
the right of workers from the EU-8 Member States 
to  full  free  movement  of  worker  rights  after  12 
months’  employment  in  any  Member  State  still 
availing itself of the transitional arrangements.

Based  on  recent  empirical  research  among  Polish 
workers  in  the  UK,  Currie  explains  that,  although 
there  is  a  formal  right  to  family  reunification,  this 
is  not  always  accessible  in  practice (685).  In  the  UK 
(as  well  as  in  the  Netherlands),  for  example,  it  has 
been shown that the practical reality for many post-
accession  migrants  who  are  housed  in  accommo-
dation arranged by their employers is that there is 
simply not adequate space, or even suitable stand-
ards of living, for their family to join them. In the UK 
the confusion surrounding benefit restrictions may 
have  conspired  to  convince  EU-8  migrant  workers 
that, should their family join them, they would have 
no entitlement to any benefits or welfare services. 
These  can  be  of  crucial  concern,  particularly  for 
those with children.

Currie  wonders  whether  the  formal  equality  after 
the expiry of the transnational periods will be suffi-
cient to achieve a more substantive type of equality 
as regards the citizenship experience of EU-15 citi-
zens, on the one hand, and EU-8 and EU-2 citizens, 
on the other (686).

Another point of concern is that there is a kind of 
‘brain  waste’:  migrants  from  all  the  new  Member 
States  are  employed  well  below  their  educational 
level  in  the  receiving  countries.  It  is  also  not  clear 
whether those EU-8 and EU-2 workers, who spend 
a period of a few years abroad, and worked in a de-
skilled capacity during this time, will be able to inte-
grate easily back into their profession upon return 

685(

)  Samantha  Currie,  Migration,  work  and  citizenship  in  the  enlarged 

European Union, Ashgate, 2008, p. 144.

686(

)  Samantha  Currie,  Migration,  work  and  citizenship  in  the  enlarged 

European Union, Ashgate, 2008, p. 206.

155

50 years of Social Security Coordination 

Past – Present – Future

to  their  state  of  origin.  Longer  periods  of  absence 
may have a damaging impact on a migrant worker’s 
home career (687).

e.  Future developments and 

enlargement

The  Commission’s  report  concludes  that  there  are 
indications  that  mobility  flows  from  the  EU-2  and 
EU-8  may  have  peaked  already  and  that  much  of 
recent  intra-EU  mobility  has  been  of  a  temporary 
nature.  Rapidly  rising  income  levels  and  labour 
demand  in  the  ‘sending  countries’,  coupled  with 
falling numbers of young people most likely to emi-
grate,  appear  to  be  reducing  labour  flows  and  are 
likely  to  lead  to  a  further  decline  in  labour  supply 
from within the EU.

Within  the  parameters  of  a  stable  and  growing 
economy  that  is  in  need  of  new  labour  migrants, 
this  could  have  been  a  solid  argument  to  lift  all 
remaining  transitional  arrangements  and  even  to 
speed up the enlargement negotiations with other 
countries. But given the current economic crisis this 
is not so obvious anymore.

The current global recession will affect future migra-
tion flows. The EU-8 and EU-2 sending countries are 
more than proportionally affected by depreciation 
of  the  exchange  rate,  economic  contraction  and 
increase in unemployment rates. Higher unemploy-
ment  in  the  destination  countries  involves  lower 
immigration and a higher return migration. Higher 
emigration incentives in the sending countries will 
have  a  low  impact  if  economic  conditions  in  the 
receiving countries are unfavourable (688).

Although  volume  and  direction  of  mobility  flows 
are  driven  by  general  labour  supply  and  demand 
and other factors rather than by restrictions on the 

687(

)  Samantha  Currie,  Migration,  work  and  citizenship  in  the  enlarged 

European Union, Ashgate, 2008, p. 208.

688(

)  Herbert  Brücker,  Labour  mobility  within  the  EU:  Causes,  directions 
and constraints, ÖNB Conference: ‘The integration of European labor 
markets’, Vienna, 17–18 November 2008.

labour  market (689),  it  is  difficult  for  governments 
to  lift  the  remaining  transitional  arrangements. 
The  Dutch  government,  for  instance,  decided  in 
November  2008  to  extend  the  transitional  regime 
because  of  the  economic  crisis,  the  expectation 
that  neighbouring  Member  States  would  take  the 
same  position  and  the  wish  to  avoid  the  Nether-
lands  becoming  more  attractive  for  workers  from 
Bulgaria and Romania (690).

The European Council expressed in February 2009 
that,  although  Member  States  have  the  right  to 
maintain  restrictions  until  the  end  of  the  third 
phase of the transitional period, the current seri-
ous  financial  and  economic  crisis  should  not  be 
used as a sole and general justification for contin-
ued application of the transitional arrangements 
for the free movement of workers in the European 
Union (691).

The Council therefore invites those Member States 
that continue to apply restrictions under the tran-
sitional  arrangements,  with  the  full  involvement 
of  the  social  partners  in  accordance  with  national 
practice, to:

•	

•	

consider  in  the  light  of  available  evidence  the 
further application of restrictions in the second 
phase  with  a  view  to  moving  as  soon  as  pos-
sible to the full application of the acquis in the 
area of the free movement of workers;
lift restrictions in the third phase if serious dis-
turbances to the labour markets of the Member 
States  concerned,  or  a  threat  thereof,  cannot 
be established.

The economic crisis seems also to have a negative 
impact  on  the  process  of  negotiations  regarding 
future  enlargement (692).  The  Dutch  and  German 

(

(

(

(

689

)  Tesseltje  De  Lange,  Staat,  markt  en  migrant;  De  regulering  van 
arbeidsmigratie  naar  Nederland  1945-2006,  Boom  Juridische 
uitgevers, 2007.

690

)  See Tweede Kamer 2008–09, 29407, No 98.

691

)  Council Document 6480/09 of 23 February 2009.

692

)  Candidate countries for enlargement are: Croatia, the Former Republic 
of Macedonia and Turkey. Potential candidate countries are: Albania, 
Bosnia and Herzegovina, Montenegro, Serbia and Kosovo.

156

Paul Minderhoud

governments  have  very  recently  effectively  put  a 
block on any more applications for fear of another 
wave  of  eastwards  expansion  which  could  stoke 
social tensions over jobs during the economic crisis. 
The issue came to a head last February over a Euro-
pean  Commission  assessment  of  a  membership 
application  request  from  Montenegro.  Germany 
and  the  Netherlands  are  concerned  that  if  Mon-
tenegro  is  considered  then  entry  bids  will  quickly 
follow  from  Albania,  Bosnia  and  Herzegovina,  and 
Serbia,  all  countries  that  were  promised  future  EU 
membership in 2003 (693). 

III.  euroPean mIgraTIon 

PolICy

It is only 10 years ago that the European Commu-
nity  received  far-reaching  legislative  authority  in 
the field of immigration and asylum by the entering 
into  force  of  the Treaty  of  Amsterdam.  In  October 
1999  the  European  Council  adopted  in Tampere  a 
common  immigration  and  asylum  policy  to  meet 
the  targets  set  out  in  the  Amsterdam  Treaty.  This 
policy  includes  four  separate  but  closely  related 
issues: partnership with countries of origin, a com-
mon  European  asylum  system,  fair  treatment  of 
third-country  nationals,  and  the  management  of 
migration flows. Within five years, minimum stand-
ards, which would mean a first harmonisation of the 
basic  principles  of  national  legislation,  were  to  be 
created. A second step will be to intensify this proc-
ess of harmonisation.

In  November  2004  the  European  Council  adopted 
the multiannual ‘Hague programme for strengthen-
ing  freedom,  security  and  justice  in  the  European 
Union’ on the basis of, and for the further develop-
ment of, previous achievements (694).

The Hague programme aims at improving the com-
mon  capacity  of  the  EU  to  ensure  fundamental 
rights, minimum standards for procedural guaran-
tees,  access  to  justice  with  regard  to  the  protec-
tion of vulnerable persons, migration management 
and the protection of the Union’s external borders. 
There  has,  although,  been  an  emphasis  on  rather 
repressive  measures,  addressing  the  problem  of 
illegal border crossing.

The  Hague  programme  expires  in  December  2009 
and  will  be  succeeded  by  the  Stockholm  pro-
gramme,  to  be  adopted  in  December  2009  under 
the  Swedish  Presidency.  This  Stockholm  pro-
gramme will set the strategic objectives for the fur-
ther  development  of  the  Union’s ‘area  of  freedom, 
security and justice’ from 2010 to 2014 (695).

These last 10 years great advancements have been 
made towards a common policy on asylum and on 
joint control of the EU’s external borders. The restric-
tive  elements  seem  to  have  been  the  easiest  to 
reach agreement on. Regarding the management of 
immigration, especially labour migration, however, 
the Member States have been unable to agree upon 
a common policy. Like social security, labour migra-
tion  is  an  area  where  the  fear  of  losing  national 
sovereignty is most pronounced. For many govern-
ments  the  decision  on  who  should  be  allowed  to 
enter and reside in the country as a labour migrant 
is still a core aspect of this national sovereignty.

It is important to stress that immigration policy is 
built  on  a  different  concept  than  the  freedom  of 
movement of persons within the Union. Freedom 
of  movement  is  conceived  as  a  set  of  individual 
rights  (the  right  to  enter,  the  right  to  reside,  the 
right  to  equal  treatment  and  so  on)  upon  which 
individuals can rely against the state. Immigration 

(

(

693

)  See  The  Telegraph  (UK),  27  February  2009  (http://www.telegraph.
co.uk/news/worldnews/europe/eu/4861544/EU-enlargement-
blocked-over-backlash-against-foreign-workers.html).

694

)  The  plan  includes,  besides  common  policies  on  asylum,  migration, 
visas  and  checks  at  external  borders;  also  police  and  customs 
cooperation, rescue services, criminal and civil law cooperation.

695(

)  On 25 September 2008 the European Commission launched a public 
consultation  on  the  scope  of  future  cooperation  directed  at  the 
Member  States,  national  parliaments,  the  general  public  and  other 
stakeholders. The Commission intends to produce a communication 
on  the  future  programme  in  May  2009.  The  programme  will  be 
discussed at the informal JHA Council in Stockholm in July 2009 and 
adopted at the summit in December 2009.

157

50 years of Social Security Coordination 

Past – Present – Future

policy, on the other hand, is founded on the state’s 
power  and  discretion  to  regulate  the  entry  and 
treatment  of  foreigners,  whose  legal  position  is 
thus weaker (696).

refugees,  students, 

The  result  of  this  legislative  activity  of  the  Coun-
cil  is  that  there  are  now  Community  law  rules  for 
all  major  forms  of  migration:  family  members, 
asylum-seekers, 
long-term 
residents and scientists. As already mentioned the 
main exception to this development has been the 
adoption  of  Community  law  rules  regarding  the 
admission  for  employment.  An  earlier  proposal 
of  the  European  Commission  for  a  general  direc-
tive  on  economic  migration  met  with  such  fierce 
opposition from the Member States (697) that it was 
withdrawn  in  2005  and  a  time-out  allowing  for 
reconsideration  was  announced (698).  New  discus-
sions resulted in the presentation of two proposals 
for directives on 23 October 2007; one on a single 
permit (699) and the other establishing conditions for 
admission  of  highly  skilled  workers,  better  known 
as the EU Blue Card (700). According to the EU justice 
and home affairs agenda for 2009, the Commission 
will present in May 2009 two more proposals, one 
covering seasonal workers and the other covering 
trainees and intra-corporate transferees (701).

696(

)  Massimo  Condinanzi,  Alessandra  Lang  and  Bruno  Nascimbene, 
Citizenship  of  the  Union  and  freedom  of  movement  of  persons, 
Martinus Nijhoff Publishers, Leiden, 2008: 236.

697(

)  Commission Green Paper on an EU approach to managing economic 
migration, 11 January 2005, COM(2004) 811 final (2004 Green Paper), 
p.  3.  The  proposal  received  positive  reactions  from  the  European 
Parliament,  the  European  Economic  and  Social  Committee  and  the 
Committee of the Regions. 

698(

)  Communication  from  the  Commission  to  the  Council  and  the 
European  Parliament,  ‘Outcome  of  the  screening  of  legislative 
legislator’,  27  September  2005 
proposals  pending  before  the 
(COM(2005) 462 final, p. 12).

699(

)  Proposal for a Council directive on a single application procedure for 
a single permit for third-country nationals to reside and work in the 
territory of a Member State and on a common set of rights for third-
country  workers  legally  residing  in  a  Member  State  (single  permit 
proposal), 23 October 2007 (COM(2007) 638).

700(

)  Proposal of the Commission for a Council directive on the conditions 
of  entry  and  residence  of  third-country  nationals  for  the  purpose 
of  highly  qualified  employment  (highly  qualified  employment 
proposal), 23 October 2007 (COM(2007) 637).

701

(

)  See  http://ec.europa.eu/atwork/programmes/docs/forward_pro-
gramming_2009.pdf. See also press release, ‘Attractive conditions 
for  the  admission  and  residence  of  highly  qualified  immigrants’, 
Brussels, 23October 2007, MEMO/07/423, p. 2.

158

a.  The single permit proposal

The single permit proposal envisages a single appli-
cation  procedure  for  issuing  a  combined  work/
residence permit and sets out common rights to be 
granted to third-country workers legally residing in 
a Member State (Article 1) (702). The proposal is still 
under negotiation in the Council.

The  concept  introduced  in  the  single  permit  pro-
posal is that permission to reside for the purpose of 
work  in  a  Member  State  is  requested  and  granted 
in one procedure. The Commission’s proposal uses 
the words ‘seeking to reside and work’, but the lat-
est  Council  document  available  to  the  public  on 
this  proposal  reads  ‘who  apply  to  reside  for  the 
purpose of work’ linking residence and work more 
tightly (703).  The  Member  States  shall  determine 
whether the application is to be made by the third-
country national or (added by the Council) by his/
her employer. A third-country worker is defined as 
‘any third-country national ... admitted to the terri-
tory of a Member State and ... allowed to work legal-
ly  in  that  Member  State’  (Article  2(b)). The  Council 
added to the proposal of the Commission that this 
work has to be done ‘in the context of an employ-
ment relationship’ (704).

The  personal  scope  of  the  directive  will  be  rather 
limited  (Article  3).  The  directive  will  not  apply  to 
posted  workers  nor  to  workers  who  have  been 
admitted to the territory of a Member State to work 
on  a  seasonal  basis  or  as  an  au  pair. The  directive 
will  also  not  apply  to  third-country  nationals  who 
are authorised to reside on the basis of temporary 
protection schemes, who are beneficiaries of inter-
national protection under Directive 2004/83/EC or 
who have applied for protection in accordance with 
national  legislation,  international  obligations  or 

(

(

(

702

)  This  paragraph 

is 

largely  based  on  Helen  Oosterom-Staples, 
‘Regulating labour migration: The EU saga on third-country nationals 
seeking access to the European labour market’, in: Anita Böcker a.o. 
(eds),  Migration  law  and  sociology  of  law  —  Collected  essays  in 
honour of Kees Groenendijk, Wolf Legal Publishers, Nijmegen, 2008, 
pp. 121–130.

703

)  See Council Document 14668/08 of 29 October 2008.

704

)  See Council Document 14668/08 of 29 October 2008.

Paul Minderhoud

practice of the Member State. Nor will the directive 
apply  to  workers  who  have  been  admitted  to  the 
territory of a Member State in order to work there 
for  a  period  not  exceeding  six  months,  as  regards 
solely the field of the single procedure.

The  decision  to  grant,  modify  or  renew  the  single 
permit  constitutes  a  combined  title  encompassing 
both residence and work permit within one admin-
istrative act (Article 4). The proposal envisages that 
applications are processed within three months from 
the date when they were lodged; a period that can 
be  extended  in  exceptional,  complex  cases  (Article 
5(2)). The Council added a sentence that ‘any conse-
quence of no decision being taken by the end of this 
period shall be determined by national legislation’.

The  single  permit  entitles  its  holder  to  enter, 
re-enter  and  stay  in  the  territory  of  the  issuing 
Member  State  (Article  11(1)(a)).  The  Commission’s 
proposal also formulated a right to travel through 
other Member States for this purpose (Article 11(1)
(b)), but the latest public Council document leaves 
this  paragraph  blank  for  the  moment.  It  also  pro-
vides its holder with the right to free access to the 
entire territory of the issuing Member State, albeit 
subject  to  security  reasons  as  defined  by  national 
law (Article 11(1)(c)), the right to exercise the con-
crete  employment  activity  authorised  under  the 
permit  and  the  right  to  be  informed  of  the  rights 
linked to the permit by either the directive or under 
national  law  (Article  11(1)(d)–(e)). The  rights  listed 
in Article 11 are supplemented by the principle of 
equal treatment with nationals for all third-country 
workers in Article 12.

Section 1 of this article contains a list of policy areas 
where equal treatment has to be ensured, subject 
to the exceptions found in Section 2 (705). The areas 
listed are: working conditions (706), freedom of asso-

(

705
) 

In the Commission’s proposal the list was not meant to be exhaustive, 
as followed from the words ‘at least’ in Section 1. The Council, however, 
has deleted these words.

ciation and affiliation and membership of an organ-
isation  representing  workers,  employers  or  of  any 
organisation whose members are engaged in a spe-
cific organisation, without prejudice to the national 
provisions on public policy and public security (707), 
education  and  vocational  training (708),  recognition 
of  diplomas,  certificates  and  other  professional 
in  accordance  with  the  relevant 
qualifications 
national procedures, social security (709), and access 
to goods and services and the supply of goods and 
services made available to the public (710). The Com-
mission’s  proposal  also  included  tax  benefits  and 
payment  of  acquired  pensions  when  moving  to  a 
third  country.  The  tax  benefits  are  deleted  com-
pletely in the latest (public) version of the Council 
and, regarding pension rights, the formulation has 
become much more specific: ‘without prejudice to 
existing  bilateral  agreements,  payment  of  income 
related acquired statutory pensions or annuities in 
respect  of  old  age  at  the  rate  applied  by  virtue  of 
the law of the debtor Member States or states when 
moving to a third country’. The Council version adds 
one extra equal treatment right concerning ‘coun-
selling  services  afforded  by  employment  offices’ 
(Article 12(1)(h) new).

The provisions on equal treatment as regards social 
security in this proposal also apply directly to per-
sons  coming  to  a  Member  State  directly  from  a 
third country, provided that the person concerned 
is legally residing and fulfils the conditions set out 
under national legislation for being eligible to the 
social security benefits concerned (711). Nevertheless, 

707(

)  A  restriction  to  third-country  workers  in  employment  is  permitted 

(Article 12(2)(d) of the single permit proposal).

708(

)  Restrictions are found in: Article 12(2)(a) (language proficiency) and 

(b) (study grants) of the single permit proposal.

709(

)  Here  we  find  a  reference  to  Council  Regulation  (EEC)  No  1408/71, 
Regulation (EC) No 859/2003 and Regulation (EEC) No 574/72. With 
the exception of unemployment benefits, this right may be restricted 
to third-country workers in employment (Article 12(2)(e) of the single 
permit proposal).

710(

)  Explicitly  mentioned  are  housing  and  assistance  afforded  by 
employment offices. A restriction to third-country nationals who have 
stayed or who have a right to stay in the Member State for a period of 
three years is permitted with respect to public housing (Article 12(2)
(c) of the single permit proposal).

(

706

)  Explicitly  mentioned  are  pay,  dismissal,  health  and  safety  at  the 
workplace.  This  right  can  be  restricted  to  third-country  workers  in 
employment (Article 12(2)(d) of the single permit proposal).

711(

)  This  extensive  scope  has  recently  been  questioned  in  the  Council. 
Article  63  EC  Treaty  would  not  provide  a  legal  basis  for  this.  See 
Council Document 5082/09 of 7 January 2009.

159

50 years of Social Security Coordination 

Past – Present – Future

this  directive  should  not  confer  to  third-country 
workers more rights than those already provided in 
existing Community legislation in the field of social 
security for third-country nationals who have cross-
border elements between Member States (712). Sec-
tion  2  allows  Member  States  to  restrict  this  equal 
treatment  to  third-country  workers  who  actually 
are in employment except for unemployment ben-
efits (713).  In  the  Council  there  is  still  discussion  on 
the  question  to  what  extent  the  (future)  directive 
should  regulate  social  security  rights  and  in  par-
ticular  access  to  unemployment  benefits  of  third-
country  workers  who  lost  employment  within  a 
Member State (714).

Notwithstanding all the limitations, Oosterom-Sta-
ples indicates that the choice for a single procedure 
should make life easier for all parties (715). The vicious 
circle that arises when an application for a residence 
permit is refused until permission to work has been 
granted  and  when  the  latter  is  refused  until  the 
former  has  been  granted  should  be  something  of 
the past. It should be emphasised that the propos-
al  does  not  lay  down  any  admission  conditions  of 
third-country  nationals. This  remains  exclusively  a 
matter for the Member States to decide.

The  European  Parliament,  which  has  the  right  of 
consultation  in  this  procedure,  on  20  November 
2008 adopted a legislative resolution amending the 
single permit proposal (716). The main amendments 
reflected  upon  the  common  set  of  rights  and  the 
equal treatment provisions. According to the Euro-
pean  Parliament  the  common  set  of  rights  must 
apply to all nationals admitted to the territory for 
employment  purposes,  and  also  to  all  those  who 
were  initially  admitted  for  other  reasons  but  who 
obtained the right to work on the basis of national 

712(

)  See Recital 16 of the Commission’s proposal.

713(

)  Article 12(2)(e) of the single permit proposal.

714(

)  Council Document 5082/09 of 7 January 2009.

715(

)  Helen  Oosterom-Staples, ‘Regulating labour  migration: The  EU  saga 
on  third-country  nationals  seeking  access  to  the  European  labour 
market’,  in:  Anita  Böcker  a.o.  (eds),  Migration  law  and  sociology  of 
law  —  Collected  essays  in  honour  of  Kees  Groenendijk, Wolf  Legal 
Publishers, Nijmegen, 2008, pp. 121–130.

716(

)  See A6-0431/2008.

or  Community  law,  irrespective  of  the  purposes 
for which they were initially admitted to the terri-
tory  of  a  Member  State. The  European  Parliament 
clarified  that,  while  the  single  permit  procedure 
applies  only  to  certain  third-country  workers,  the 
common  set  of  rights  is  equally  applicable  to  all 
third-country  workers.  Otherwise,  discrimination 
between third-country workers would be likely to 
arise  on  such  a  fundamental  issue  as  the  right  to 
equal treatment. Furthermore, the European Parlia-
ment holds the opinion that apart from the rights 
that are listed in the proposal, third-country work-
ers  must  enjoy  equal  treatment  with  nationals  at 
least with regard to: working conditions, including 
pay,  holidays,  working  time  and  dismissal  as  well 
as  health  and  safety  at  the  workplace;  education 
in the broad sense of the term (language learning 
and cultural familiarisation with a view to improv-
ing integration) and vocational training; portability 
of pensions or annuities in respect of old age, death 
or invalidity; information and counselling services 
offered by employment offices (717). Member States 
may restrict equal treatment to nationals by requir-
ing  proof  of  appropriate  language  proficiency  for 
access  to  education  and  training.  Access  to  uni-
versity may be subject to the fulfilment of specific 
educational  prerequisites.  They  may  also  restrict 
equal treatment in respect of study grants accord-
ing to the Parliament. These amendments are not 
binding and it is very unlikely that the Council will 
accept them, given the current financial crisis.

b.  The highly qualified employment 

proposal (‘EU Blue Card’)

Highly  qualified  workers  from  all  third  countries 
account  for  1.72  %  of  the  EU’s  total  workforce, 
which  is  well  behind  other  important  immigra-
tion  countries  such  as  Australia  (9.9  %),  Canada 
(7.3  %),  the  USA  (3.2  %)  and  Switzerland  (5.3  %). 
The  27  different  admission  regimes  at  present  in 
the EU are seen as the main reason for its low level 

(

717

)  The plenary re-inserted some of the clauses in the original proposal, 
which the Committee on Civil Liberties, Justice and Home Affairs had 
deleted with regard to the right to equal treatment.

160

Paul Minderhoud

of attractiveness as an immigration destination. As 
a consequence it is considerably more difficult for 
potential  migrant  workers  from  third  countries  to 
move  easily  from  one  Member  State  to  another. 
Therefore,  the  objective  of  the  highly  qualified 
employment  proposal  is  to  introduce  a  fast-track 
and  flexible  admission  procedure  and  favourable 
residence  conditions  for  third-country  nationals 
in order to make the EU more attractive to highly 
qualified workers. The benefits for the EU Blue Card 
holder are, on the one hand, the right to move free-
ly within the EU and, on the other hand, the right to 
immediate family reunification as well as the pos-
sibility to take up highly qualified employment in a 
second Member State after 18 months (718).

‘Highly qualified employment’ means the employ-
ment  of  a  person  who,  in  the  Member  State 
concerned,  is  protected  as  an  employee  under 
national  employment  law  and/or  in  accordance 
with  the  national  practice,  irrespective  of  the 
legal relationship, for the purpose of performing 
genuine and effective work for or under the direc-
tion  of  someone  else  for  which  a  person  is  paid 
and for which adequate and specific competence, 
proved  by  higher  professional  qualifications,  is 
required (719).  ‘Higher  professional  qualifications’ 
means  qualifications  attested  by  evidence  of 
higher education qualifications, or, by way of der-
ogation, when provided for by national legislation 
by at least five years of professional experience of 
a level comparable to higher education qualifica-
tions  and  which  is  relevant  in  the  profession  or 
sector  specified  in  the  work  contract  or  binding 
job offer (720).

Article 5 sets out the conditions for admission of a 
highly qualified worker as follows:

•	
•	

•	

•	
•	

•	

a valid contract or job offer for at least a year;
compliance  with  regulated  professional  rules 
as  they  apply  to  EU  citizens  and,  for  unregu-
lated  professions,  possession  of  a  relevant 
qualification;
a  valid  travel  document  and  if  required  (an 
application for) a visa;
sickness insurance;
no  threat  to  public  policy,  public  security  or 
public health;
a salary level which should be at least 1.5 times 
the average gross annual salary in the Member 
State  concerned. This  level  can  be  lowered  to 
1.2  times  the  average  gross  annual  salary  for 
employment in some professions with a short-
age of workers (721).

As  an  extra  condition  a  new  Section  5,  added  by 
the  Council,  emphasises  that  this  article  shall  be 
without  prejudice  to  the  applicable  collective 
agreements  or  practices  in  the  relevant  occupa-
tional  branches  for  highly  qualified  employment. 
The directive does not create a right of admission. 
Member States keep the competence to determine 
volumes of admission of third-country nationals for 
highly qualified employment (722).

Member States shall set a standard period of validity 
of the EU Blue Card, which will be between one and 
four years. If the work contract covers a period less 
than this period, the EU Blue Card shall be issued or 
renewed for the duration of the work contract plus 
three months (723).

The  personal  scope  includes  for  a  large  part  the 
same limitations as the personal scope of the single 
permit proposal.

Unemployment  in  itself  shall  not  constitute  a  rea-
son  for  withdrawing  an  EU  Blue  Card,  unless  the 

(

718

)  This  was  two  years  in  the  Commission’s  proposal  (see    http://www.

europeanunionbluecard.com).

719(

)  Article  2(b),  in  the  latest  public  version  of  the  Council  (Council 

Document 16952/08 of 10 December 2008).

720(

)  Article  2(g)  of  Council  Document  16952/08  of  10  December  2008. 
In  the  original  Commission’s  proposal  three  years  of  professional 
experience was sufficient.

721(

)  The original Commission’s proposal had set the level to three times 

the minimum gross monthly wage.

722(

)  Articles  7,  9(2a)  and  19(6)  of  Council  Document  16952/08  of 

10 December 2008.

723(

)  Article 8(2) of Council Document 16952/08 of 10 December 2008.

161

50 years of Social Security Coordination 

Past – Present – Future

period  of  unemployment  exceeds  three  consecu-
tive months, or it occurs more than once during the 
period of validity of an EU Blue Card (Article 14).

has  taken  place  to  exercise  economic  activity,  per-
form voluntary service or study (Article 17(5)).

According  to  Guild  there  are  good  reasons  for 
allowing a person a longer period to find work. As 
the current financial crisis shows, the labour mar-
ket can change very rapidly. An individual who has 
made the decision to move with the whole family 
to  a  Member  State  deserves  fair  treatment  in  the 
event  of  becoming  unemployed,  including  a  rea-
sonable period of time to find a new job. The threat 
of  expulsion  soon  after  unemployment  gives  the 
employer  an  undesirable  influence  on  the  immi-
gration status of the employee. The latter may be 
coerced into accepting worse conditions or keep-
ing  quiet  about  breaches  of  labour  (or  company) 
law on the part of the employer because his or her 
immigration position depends too heavily on con-
tinued employment (724).

The equal treatment provision (Article 15) includes 
for a large part the same rights as the provision of 
the single permit proposal. In the original proposal 
from the Commission, holders of a Blue Card could 
also  enjoy  equal  treatment  with  nationals  regard-
ing  social  assistance  as  defined  by  national  law, 
although Member States could restrict this to cas-
es where the holder of the EU Blue Card has been 
granted an EC long-term resident status (725). In the 
latest version from the Council this equal treatment 
provision  has  been  deleted  as  well  as  the  equal 
treatment provision regarding tax benefits.

To stimulate circular migration, holders of an EU Blue 
Card are allowed to return to their country of origin 
for  a  longer  period  (18  months,  and  if  the  EU  Blue 
Card holder also has been granted an EC long-term 
residence  status  24  months),  without  losing  their 
right to stay in a Member State (Article 17(3) and (4)).  
This right may be restricted to cases in which return 

(

(

724

)  Elspeth  Guild, ‘EU  policy  on  labour  migration  —  A  first  look  at  the 
Commission’s Blue Card initiative’, CEPS Policy Brief, No 145, November 
2007.

725

)  Article  15(1)(f )  and  15(3)  of  the  highly  qualified  employment 

proposal.

162

Finally,  two  additions  made  by  the  Council  which 
will make working in a second Member State more 
difficult are worth mentioning here (726). Article 19(2) 
provides that the second Member State may decide, 
according to national law, not to allow the applicant 
to work until a positive decision on the application 
has been taken by the competent authority and Arti-
cle 21(4) provides that the second Member State may 
require  the  Blue  Card  holder  to  provide  evidence 
that: (a) he/she has accommodation regarded as nor-
mal for a comparable family in the same region and 
which meets the general health and safety standards 
in the Member State concerned; and (b) he/she has 
stable and regular resources which are sufficient to 
maintain  himself/herself  and  the  members  of  the 
family, without resources to the social assistance of 
the Member State concerned.

The European Parliament, which has the right of con-
sultation in this procedure as well, adopted also on 
20 November 2008 a legislative resolution, amend-
ing the highly qualified employment proposal (727).

The Parliament proposed a clearer framework, more 
precise definitions and more flexibility for Member 
States,  whilst  urging  them  to  avoid  a  brain  drain 
from third countries. They also stated that Blue Card 
workers should not have priority over EU nationals 
on the labour market. A holder who loses his or her 
job  should  have  six  rather  than  three  months  to 
find  another. The  card  should  not  be  viewed  as  a 
‘right’ for migrants, and may be refused even when 
they meet the criteria. EU Member States are asked 
not to allow Blue Cards in sectors where access to 
EU-10 Member States’ workers is still restricted. The 
European Parliament also demands that EU Mem-
ber States should not actively encourage the ‘brain 
draining’ of third countries through the Blue Card 

(

(

726

)  Council Document 16952/08 of 10 December 2008.

727

)  See A6-0432/2008.

Paul Minderhoud

in sectors where these countries suffer from labour 
shortages,  particularly  in  the  areas  of  health  and 
education (728).

The highly qualified proposal was due to be adopted 
at the Council summit on 8 December 2008 but the 
Czech Republic, which took over the EU Presidency 
from France on 1 January 2009, seemed to hold up 
a deal until its own workers were given access to all 
EU Member States (after 30 April, see above) (729).

The EU Blue Card can be seen as a first step towards 
a  common,  appealing  policy  of  the  EU  regarding 
highly  skilled  workers.  It  will  make  the  EU  labour 
market  a  bit  more  attractive  for  highly  qualified 
third-country nationals.

Iv.  new PaTTernS oF 

mIgraTIon: whaT doeS The 
eu really wanT?

In 2008 two important policy documents were pub-
lished  regarding  a  future  EU  policy  on  migration. 
One is a communication on ‘A common immigration 
policy  for  Europe:  Principles,  actions  and  tools’ (730) 
by the Commission, published in June, the other is 
a  document  adopted  by  the  European  Council  on 
16 October, entitled the European Pact on Immigra-
tion and Asylum (731).

As already mentioned, under the Swedish Presidency 
a new five-year programme in the justice, freedom 
and  security  area  will  be  elaborated. This  so-called 
Stockholm programme will use the communication 
on a common immigration policy and the European 
Pact on Immigration and Asylum as bases. This will 
become a tremendously difficult task because both 
documents take a totally different approach.

The  communication  constitutes  the  Commission’s 
contribution  to  the  future  development  of  the 
common  immigration  policy.  This  development  is 
based  on  10  common  principles.  These  principles 
are based on the European commitment to uphold 
universal  values  such  as  protection  of  refugees, 
respect for human dignity and tolerance. They have 
been grouped under the three main strands of the 
EU policies: prosperity, solidarity and security. Each 
principle  is  accompanied  by  a  non-exhaustive  list 
of  concrete  actions  to  be  pursued  at  EU  and/or 
Member  State  level  and  designed  to  implement 
the principle in practice. The principles are listed in 
brief below.

•	

Prosperity and immigration: the following three 
principles  aim  at  recognising  and  enhancing 
the  contribution  of  legal  immigration  to  the 
socioeconomic  development  of  the  EU.  They 
deal with:

1. 
2. 
3. 

clear rules and a level playing field;
matching skills and needs;
integration,  which  is  the  key  to  successful 
immigration; it should be strengthened by 
means of a ‘two-way process’ actively involv-
ing both host society and immigrants.

In this respect there is an explicit reference to social 
security. To strengthen integration, Member States 
have  to  ensure  a  non-discriminatory  and  effective 
access of legal immigrants to healthcare and social 
protection,  and  an  effective  application  of  EU  law 
providing  third-country  nationals  with  the  same 
treatment as EU nationals regarding the coordina-
tion of social security schemes across the EU (732).

Furthermore, the EU and the Member States should 
promote  transparency  in  the  rules  applying  to 

(

(

(

(

728

)  See http://www.europeanunionbluecard.com/?m=200812

729

)  Agence France Presse, 27 November 2008.

730

)  COM(2008) 359.

731

)  Council  Document  13440/08  of  24  September  2008;  also  known  as 
the French Pact because of the French Presidency under which it was 
established.

(

732
) 

In 2003, the European Parliament and the Council adopted Regulation 
(EC) No 859/2003 (OJ L 124, 20.5.2003), extending the provisions of 
Regulation (EEC) No 1408/71 to third-country nationals who are (1) 
legally residing in the EU and (2) in a cross-border situation. In July 
2007, the Commission adopted a proposal extending the provisions 
of Regulation (EC) No 883/2004, which will replace Regulation (EEC) 
No 1408/71, to third-country nationals who are (1) legally residing in 
the EU and (2) in a cross-border situation (COM(2007) 439).

163

50 years of Social Security Coordination 

Past – Present – Future

pension  entitlements  in  case  migrants  wish  to 
return to their country of origin.

•	

Solidarity  and  immigration:  in  this  context 
solidarity  means  solidarity  among  the  Mem-
ber  States,  burden-sharing  (financial  solidar-
ity),  and  solidarity  and  partnership  with  the 
countries of origin and transit of immigrants. In 
concrete terms, these three principles state the 
need for:

1. 

2. 

3. 

transparency, trust and cooperation among 
the Member States;
effective  and  coherent  use  of  available 
means  —  in  particular  to  support  specific 
migratory and geographic challenges faced 
by Member States;
partnership with third countries to discuss 
and address together the whole spectrum 
of  issues  linked  with  the  migration  phe-
nomenon.

In  order  to  make  this  partnership  happen  there  is 
another explicit reference to social security. The EU 
and  its  Member  States  need  to  include  provisions 
on  social  security  coordination  in  the  association 
agreements  concluded  between  the  EU  and  its 
Member States and third countries. Apart from the 
principle of equal treatment, such provisions could 
cover  portability  of  acquired  social  rights,  in  par-
ticular transfer of pension rights.

•	

Security and immigration: these four principles 
deal with the need to ensure that the rules laid 
down  in  the  immigration  area  are  respected, 
and that illegal immigration is addressed in an 
efficient manner:

1. 

2. 

a  visa  policy  that  serves  the  interests  of 
Europe by facilitating the entry of bona fide 
visitors  while  at  the  same  time  enhancing 
security;
integrated border management to preserve 
the integrity of the Schengen area without 
internal border controls;

3. 

4. 

stepping up the fight against illegal immi-
gration and zero tolerance for trafficking in 
human beings;
sustainable and effective return policies.

The Commission is firmly convinced that the com-
mon  immigration  policy  must  be  delivered  in 
partnership  between  the  Member  States  and  the 
EU  institutions  and  should  be  based  on  the  eco-
nomic  and  immigration  situation  of  each  Member 
State and of the EU as a whole. However, regarding 
labour  migration  the  Commission  underlines  that 
neither the principles, nor the actions will impinge 
on Member States’ competences. The determining 
of  the  volume  of  immigrant  workers  to  be  admit-
ted will remain the full responsibility of each Mem-
ber State. There will be neither quotas fixed by the 
European Union, nor a right of admission for immi-
grant workers set out in future directives.

‘the French Pact’

The  pact  is  intended  to  provide  a  roadmap  for 
future European immigration policies and sets out 
five priorities for action:

•	

•	

•	
•	
•	

to  organise  legal  immigration  to  take  account 
of  the  priorities,  needs  and  reception  capaci-
ties determined by each Member State, and to 
encourage integration;
to control illegal immigration by ensuring that 
illegal  immigrants  return  to  their  countries  of 
origin or to a country of transit;
to make border controls more effective;
to construct a Europe of asylum;
to  create  a  comprehensive  partnership  with 
the countries of origin and of transit in order to 
encourage the synergy between migration and 
development.

The  pact  has  been  criticised  by  several  analysts. 
According to Collett it clearly heralds a more con-
servative approach to immigration (733). It looks at 

(

733

)  Elizabeth  Collett,  ‘The  EU  Immigration  Pact  —  from  Hague  to 

Stockholm, via Paris’, EPC Policy Brief, October 2008.

164

Paul Minderhoud

immigration policies through the prism of ‘control 
first’ making this more explicit than in the past. Of 
the  five  areas  identified  for  action,  just  one  con-
cerns  promoting  access  to  the  EU,  and  even  this 
refers to preventing illegal and undesirable migra-
tion.  Unlike  the  communication  of  the  Commis-
sion,  the  pact  downplays  the  need  to  harmonise 
immigration  policies. The  Council  commits  Mem-
ber  States  to  ‘organise’  legal  immigration  rather 
than construct common policies: ‘It recalls that it is 
for each Member State to decide on the conditions 
of admission of legal migrants to its territory, and, 
where necessary, to set their number’. This clearly 
reflects  the  reluctance  of  the  Member  States  to 
relinquish their competence.

Carrera and Guild also observe that the pact is very 
much  oriented  towards  the  Member  States  and 
is  driven  by  a  predominantly  intergovernmental 
logic  prioritising  the  competences  of  the  Member 
States over those of an EU at 27 (734). It will boost the 
ongoing  tension  between  the  establishment  of  a 
European  immigration  and  asylum  policy  and  the 
perpetuation of Member States’ competences  and 
power of discretion over these fields.

According  to  Bertossi,  the  pact  openly  proposes 
a  policy  framework  aimed  at  answering  the ‘con-
cerns of citizens’ of EU Member States rather than a 
policy aimed at solving economic and social issues 
at  stake  with  immigration (735).  The  priority  put  on 
the fight against ‘illegal migration’, on the need to 
regulate  family  migration  more  effectively,  on  the 
strengthening  of  Frontex (736),  and  on  the  develop-
ment  of  biometric  technologies,  fits  this  perspec-
tive.  The  pact  being  a  non-binding  petition  of 
political principles can hardly be seen as providing 
any real implementable common policy in the field 

(

(

734

)  S.  Carrera  and  E.  Guild, ‘The  French  Presidency’s  European  Pact  on 
Immigration and Asylum: Intergovernmentalism vs. Europeanisation? 
Security vs. rights?’, CEPS Policy Brief, No 170, September 2008.

735

)  Christophe  Bertossi,  ‘How  can  Europeans  agree  on  a  common 
migration  policy?’,  Report  of  the  Ifri/Barrow  Cadbury  Trust  ‘Anglo-
French Policy Dialogue on Regularisation and Co-Development’ (draft 
version 26 January 2009).

(

736

)  Frontex is the EU agency which coordinates the activity, training and 

of migration. Neither does it question whether the 
text is endowed with a genuine European approach. 
It  is  rather  the  opposite,  with  a  move  towards  a 
strong  national-orientated  approach  to  the  Euro-
pean agenda of migration policies. 

v.  global aPProaCh and 
CIrCular mIgraTIon

An  interesting  component  of  the  common  migra-
tion  policy  is  the  so-called  global  approach.  This 
global  approach  to  migration  can  be  defined  as 
the  external  dimension  of  the  European  Union’s 
migration policy. Adopted in 2005, it illustrates the 
ambition  of  the  European  Union  to  establish  an 
inter-sectoral framework to manage migration in a 
coherent way through political dialogue and close 
practical  cooperation  with  third  countries.  It  is  a 
novel  approach  to  improve  the  mobility  of  labour 
migrants from third countries to the EU.

The  abovementioned  communication  of  June 
2008 on ‘A common immigration policy for Europe’ 
highlighted  the  need  to  strengthen  the  global 
approach  to  ensure  a  coherent,  common  Europe-
an  migration  policy,  reiterating  the  principle  that 
effective management of migration flows requires 
genuine  partnership  and  cooperation  with  third 
countries and that migration issues should be fully 
integrated into the EU’s development cooperation 
and external policies, as well as incorporate issues 
emerging  from  them.  In  October  2008  the  Com-
mission  published  a  communication  especially 
addressing the theme of global approach (737). This 
global  approach  communication  formulates  as  a 
challenge that a more highly developed common 
European  immigration  policy  will  need  to  give 
more thought to ways of matching job-seekers to 
vacancies and to allowing for more flexible access 
for  labour  migrants (738).  This  means  that  work  in 

737(
) 

  ‘Strengthening  the  global  approach  to  migration: 
Increasing 
coordination,  coherence  and  synergies’,  communication  from  the 
Commission (COM(2008) 611, 8.10.2008).

operations of the EU’s border control.

738(

)  COM(2008) 611, p. 4.

165

50 years of Social Security Coordination 

Past – Present – Future

areas such as recognition of foreign qualifications, 
exploring the portability of pension rights and oth-
er welfare entitlements, promoting labour market 
integration at both ends of the migration pathway, 
the social inclusion of migrants and development 
of inter-cultural skills, needs to be stepped up and 
given much higher priority.

An important part of this approach is the provision 
of  incentives  for  circular  migration  by  setting  up 
or  strengthening  legal  and  operational  measures 
such  as  compiling  best  practices  and  launching 
circular  migration  pilot  initiatives  to  boost  the 
contribution  that  circular  migration  can  make  to 
development  in  source  countries  and  to  ensure 
that  such  mobility  responds  to  market  needs  in 
destination countries. These incentives should not 
contribute to brain drain; they should explore spe-
cific tools to facilitate circular migration and ‘brain 
circulation’ such as ‘dual posts’ (e.g. for health pro-
fessionals, teachers and researchers) and twinning 
between public sector employers and institutions 
in  EU  Member  States  and  migrant  source  coun-
tries,  and  should  help  migrants  reintegrate  in 
source  country  labour  markets (739).  It  is  explicitly 
stated that in this context one has to explore ways 
of  granting  legal  immigrants  the  right  to  priority 
access  to  further  legal  residence  in  the  EU,  and 
examine  how  the  portability  of  acquired  social 
rights  to  third  countries,  notably  the  payment  of 
pensions, may facilitate such mobility.

So far, for instance, Germany and Switzerland have 
unsuccessfully  pursued  such  a  policy  of  circular 
migration in the past. Hailbronner and Koslowski (740) 
describe that it was expected that migrant workers 
recruited  in  the  1950s  and  1960s  would  return  to 
their  home  countries,  and  other  migrants  would 
take their place in a ‘rotation’ system. Instead, partly 
because  of  the  economic  self-interest  of  employ-
ers who did not want to lose the acquired skills of 

739(

)  COM(2008) 611, p. 5.

740(

)  K. Hailbronner and R. Koslowski, Models for immigration management 

schemes, GMF Paper Series, 2008

their workers and partly because of the social and 
economic  interests  of  the  migrant  workers,  the 
expected temporary migration eventually became 
permanent  migration.  Additionally,  migrant  work-
ers moved their families to Germany.

They  stress  that  future  circular  migration  projects 
may only be successfully managed if there is a rea-
sonable  prospect  of  acceptable  living  conditions 
for the migrants in the sending countries. Although 
there is evidence that migrants from eastern Euro-
pean and former Soviet Union states prefer tempo-
rary  over  permanent  migration,  this  will  probably 
not  be  the  case  for  migrants  from  Africa (741).  The 
economic  differences  between  the  northern  and 
southern  shores  of  the  Mediterranean  Sea  are 
huge.  Per  capita  income  in  Spain  is  13  times  that 
of Morocco (742).

Hailbronner  and  Koslowski  see  the  granting  of  a 
special  residential  status,  including  an  option  to 
return  to  the  host  country  or  to  another  Member 
State after a certain time of experience, as an addi-
tional incentive to return.

In  the  Netherlands,  the  Advisory  Committee  on 
Aliens Affairs (ACVZ) will soon publish a report on 
temporary/circular migration (743). The ACVZ defines 
temporary  migration  as  the  migration  of  third-
country nationals who come for a period of three 
to four years to work and who have to return after 
that period to their country of origin or to another 
country.

The  ACVZ  stresses  that  permanent  migration  can-
not solve the demographic challenges of the future. 
Experiences from the past show that one of the big-
gest  problems  of  temporary  migration  will  be  to 
guarantee  the  return  of  the  migrant. To  stimulate 
this  return,  the  ACVZ  proposes  a  few  strict  condi-
tions. The  most  remarkable  are  the  following. The 

(

(

(

741

)  Ali. M. Mansoor and Bryce Quillin, Migration and remittances, eastern 

Europe and former Soviet Union, World Bank 2007: 110.

742

)  Compared with the differences between the USA and Mexico, the per 

capita income is much smaller and differs six times. 

743

)  Briefadvies tijdelijke migratie, 9 February 2009, ACVZ/ADV/2009/02.

166

Paul Minderhoud

duration of the temporary stay should not exceed 
four years and the migrant workers would not have 
a  right  to  family  reunification  during  this  stay (744). 
As an incentive to return the migrant should get a 
job offer for a year in his country of origin and only 
those migrants who keep their promises would get 
another opportunity to work in the EU after a cer-
tain amount of time (for instance, 18 months). Fur-
thermore, temporary labour migrants should have 
the  possibility  to  buy  off  their  state  and  company 
old-age  pensions,  the  money  only  being  paid  in 
their country of origin. 

vI.  ConCluSIonS

Demographic  factors  will  fuel  a  need  for  labour 
migration  in  the  next  few  decades.  The  average 
birth rate in the EU is 1.5 at the moment, whereas 
the replacement rate is 2.1.

Enlargement has stimulated intra-mobility, but this 
source is running dry. The present boost of enlarge-
ment  is  over  the  top.  Future  enlargements  do  not 
seem to create a sufficient supply of labour. Moreo-
ver, the process of enlargement seems to be slack-
ening rather than accelerating.

The Commission sees this clearly and is slowly try-
ing  to  build  a  common  policy  on  labour  migra-
tion. The  first  steps  have  been  made,  but  it  is  still 
an uphill struggle. The first proposals will probably 
reach  the  finish  in  a  strongly  watered-down  ver-
sion. Although the proposals have some important 
weaknesses, they provide a starting point for a com-
mon policy. For some Member States this is a first 
step towards a highly skilled migration policy. If it is 
possible to achieve one smooth, efficient and quick 

procedure  for  businesses  to  fill  their  third-country 
national employment needs according to clear and 
precise rules, it will be a substantial benefit to the 
EU economy.

Besides,  Directive  2003/109/EC  on  the  status  of 
long-term  residence  provides  for  free  movement 
of  third-country  nationals  who  have  resided  law-
fully in the EU for at least five years. They acquire 
the right to move and reside in any Member State 
for  economic  purposes,  including  work  (though 
Member States can delay this by up to a year), as 
well  as  for  non-economic  reasons.  Thus  leaving 
the policy of first admission to the Member States 
less  attractive  when  each 
becomes  generally 
Member  State  individually  controls  first  entry.  In 
the interest of coherence there is an argument in 
favour of a common set of rules on first admission 
of labour migrants (745).

A serious problem is the tension between the Coun-
cil and the Commission on questions regarding the 
limitations  of  sovereignty.  As  in  the  area  of  social 
security, a great deal of Member States are still very 
hesitant  to  embrace  any  harmonisation  on  labour 
migration at all.

An  interesting  development  is  the  growing  influ-
ence  of  a  global  approach  towards  migration.  An 
important part of this approach is the promotion of 
circular migration. However, there are a number of 
catches to this kind of migration.

The unpredictable factor at present is the financial 
crisis.  Will  this  increase  the  Member  States’  will-
ingness  to  tackle  the  demographic  problems  that 
exist  or  will  it  result  in  more  protectionism  and 
Einzelgänger behaviour?

(

744

)  This  will  raise  the  question  whether  this  is  possible  in  the  light  of 
Directive 2003/86/EC on family reunification, Article 8 of the European 
Convention  on  Human  Rights  and  the  International  Convention  on 
the Rights of the Child.

745(

)  Elspeth  Guild, ‘EU  policy  on  labour  migration  —  A  first  look  at  the 
Commission’s Blue Card initiative’, CEPS Policy Brief, No 145, November 
2007.

167

50 years of Social Security Coordination 

Past – Present – Future

TOwARdS  NEw RuLES  FOR ThE  
dETERmiNATiON  OF ThE  APPLiCABLE  
LEgiSLATiON ?

Yves Jorens
Ghent University (Belgium) 

Mr. Yves Jorens (°1968, Antwerp, Belgium) is currently Professor of Social Security 
Law (National and International) and European Social Law, at the Faculty of Law of 
the Ghent University in Belgium. He was a Former Head of an Independent Junior 
Research Group for European and International Social Security Law at the Max-
Planck-Institute  for  foreign  and  international  social  law,  Munich,  Germany.  He 
wrote a doctoral thesis on the judicial position of non-EU-nationals in European 
Social security law. Since many years he is working on European social law and 
social policy issues with respect to accession and integration into the European 
Union, problems related to international employment, health policy and health 
care law. He has done a lot of research on and has a good knowledge and under-
standing of the national social security systems of the EU Member States.

He has a lot of experience of working in many Member States of the Europe-
an Union, in particular the recent Accession Countries as well as connections 
with  social  security  experts  in  many  of  these  countries.  He  is  also  very  active 
in  Southern  Africa  and  in  China.  He  was  expert  and Team  Leader  in  different 
Phare and Consensus programmes on European social law, as well as consultant 
for the Council of Europe. He is consultant for the European Union in different 
domains of European social security and European health care law and policy. 
Yves Jorens is Member and Scientific Mentor of the MISSOC-Secretariat (Mutual 
Information System on Social Protection in the EU). Currently he is also Project 
Director  and  Scientific  Manager  of  the  trESS-project  (Training  and  Reporting 
on European Social Security) commissioned by the European Commission, Em-
ployment, Social Affairs and Equal Opportunities Directorate, dealing with the 
Social Security co-ordination regulations for migrant workers.

I.  a FundamenTal PrInCIPle 
oF euroPean SoCIal 
SeCurIT y

The  determination  of  applicable  legislation  is  one 
of the fundamental principles of social security for 
migrant  workers (746). The  objective  is  to  avoid  any 
doubts as to which specific law governs the social 
protection of the migrant worker. In the absence of 
this  principle,  taking  into  account  that  it  belongs 

(

746

)  Although  this  principle  is  not  literally  taken  over  in  Article  42  of 
the  EC  Treaty.  Also  Guy  Perrin  in  his  book  (La  sécurité  sociale,  son 
histoire à travers les textes, Tome V: histoire du droit international de 
la  sécurité  sociale,  Paris,  Association  pour  l’étude  de  l’Histoire  de  la 
Sécurité Sociale, 1993, 361) does not mention this principle either as 
a fundamental principle of international coordination. 

to the national sovereignty of any Member State to 
determine the conditions and criteria under which 
persons  may  be  insured  (workplace,  residence, 
nationality, etc.), a situation could arise where two 
or more conflicts in law would simultaneously apply 
or which appear to fall outside any relevant legisla-
tion. The  objective  of  this  principle  is  therefore  to 
ensure  in  the  interest  of  the  migrant  worker  that 
there  is  complete  protection,  immediately  avail-
able, wherever the worker is at that time (747).

The  methods  to  determine  the  applicable  legis-
lation  may  be  diverse  and  are  not  always  easy  to 

(

747
) 

ILO, Introduction to social security, Geneva, ILO, 1984, 154.

168

Yves Jorens

apply, ranging from place of work to the place of 
residence  or  location  of  the  employer,  the  flag 
state, etc.

connecting  factors,  such  as  the  place  of  residence 
or the location of the employer, were established.

Within the European Union the option was made 
to choose the place of work, the lex loci laboris, as 
the  criterion  for  defining  the  applicable  legisla-
tion. Legal as well as practical arguments were at 
the origin of this decision. The idea was to clearly 
link the social security rights of the migrant to the 
legal system of the country to which s/he is most 
attached in her or his daily life. The lex loci laboris 
was therefore not only in line with the initial social 
security  schemes  to  be  coordinated,  but  also 
reflects  the  idea  that  social  security  is  a  comple-
ment to waged work, and that social security and 
labour  are  often  closely  interrelated,  for  example 
for  the  calculation  of  benefits  or  for  the  adminis-
trative organisation (748). It also coincides with the 
rule of conflict applicable in the area of labour law 
(see the Convention of Rome of 1980 and Regula-
tion (EC) No 593/2008). Choosing the residence of 
the worker could also encourage the employer to 
choose  on  the  basis  of  the  level  of  contributions 
as  they  might  differ  between  the  states.  In  that 
respect, choosing the connecting factor of the lex 
loci  laboris  follows  the  general  principles  of  the 
free  movement  of  workers,  which  was  —  at  least 
at the adoption of the coordination regulations — 
the framework of reference. Social security is also 
an  aspect  of  public  law,  relating  to  a  question 
of  financial  division  of  social  security  costs  for 
migrant workers (749).

As  a  result,  competition,  as  regards  workers,  takes 
place according to the terms applicable to the mar-
ket where the job is performed.

It is only when the nature of some types of employ-
ment  renders  the  strict  application  of  the  rule 
of  the  workplace  law  impossible  that  alternative 

748(

)  The  salary  of  the  beneficiary  is  often  an  important  criterion  in  the 

calculation of the benefits.

749(

)  See  S.  Van  Raepenbusch,  La  sécurité  sociale  des  personnes  qui 
circulent  a  l’intérieur  de  la  Communauté  économique  européenne, 
Brussels, Story-Scientia, 1991, 225.

The  conflict  rule  not  only  determines  where  the 
employee is insured, but also where the employer 
has to pay contributions. In this respect, it is irrel-
evant  if  the  employer  has  no  other  link  to  this 
state  than  the  fact  that  his  worker  is  working  for 
him  there,  even  if  the  employer  is  established  in 
another  Member  State  and  pays  less  contribu-
tions there ( 750).

Lex loci laboris is therefore the general rule of attach-
ment, to be applied even when no choice has been 
made (751).  Regulation  (EEC)  No  1408/71  only  dero-
gates  from  the  general  rule  of  attachment  to  the 
state  of  employment  in  specific  situations  and  on 
grounds  of  practicality  and  efficacy,  which  render 
attachment  to  the  state  of  residence  more  appro-
priate and more in conformity with the interest of 
frontier workers (752).

The  fundamental  option  for  lex  loci  laboris  has, 
however,  on  many  occasions  been  questioned,  at 
different moments of accession when new Member 
States, in particular based on residence, joined the 
European  Union.  The  state  of  employment  would 
therefore no longer be considered the most appro-
priate  or  suitable  (753).  The  increasing  number  of 
Beveridge/Nordic  model  countries,  as  well  as  the 

750(

)  Case  C-8/75  Le  Football  Club  d’Andlau  [1975]  ECR  739;  the  actual 
Article 91 of Regulation (EEC) No 1408/71 points out that ‘an employer 
shall not be bound to pay increased contributions by reason of the 
fact  that  his  place  of  business  or  the  registered  office  or  place  of 
business of his undertaking is in the territory of a Member State other 
than the competent state’. In the new Regulation (EC) No 883/2004, 
this self-evident rule was abolished.

751(

)  The  Rebmann  case  (C-58/87  [1988]  ECR  3467)  determines  that  the 
taking into account of a frontier worker’s periods of full unemployment 
for the purpose of calculating pension rights falls, in the absence of a 
specific provision, under the general rule which causes the situation 
of frontier workers to be governed in principle by the law of the state 
of employment (para. 19). 

752(

)  Case C-58/87 Rebmann [1988] ECR 3467, para. 15.

753(

)  A.  Christensen  and  M.  Malmstedt,  ‘Lex  loci  laboris  versus  lex  loci 
domicilii — An inquiry into the normative foundations of European 
social  security  law’,  European  Journal  of  Social  Security,  Issue  1, 
Kluwer  Law  International  2000,  69;  see  also  D.  Pieters,  ‘Towards  a 
radical simplification of the social security coordination. Exploratory 
study  on  possibilities  of  replacement  of  Regulations  (EEC)  Nos 
1408/71 and 574/72 in order to simplify the EC co-ordination of social 
security  schemes’,  in  P.  Schoukens  (ed.),  Prospects  of  social  security 
coordination, Leuven, Acco, 1997, 190.

169

50 years of Social Security Coordination 

Past – Present – Future

introduction  of  elements  of  residence  and  non-
contributive  benefits  in  the  traditional  Bismarkian 
countries, were often seen as justifications for ques-
tioning the lex loci laboris. Although this discussion 
sometimes  turns  too  much  in  the  direction  of  a 
country-specific  approach  in  counting  the  actual 
numbers of resident-based systems compared with 
the initial schemes to be coordinated at the begin-
ning  of  the  European  Union,  the  new  framework 
of  coordination  (Regulation  (EC)  No  883/2004) 
confirms,  and  to  a  certain  extent  even  strength-
ens,  the  choice  for  the  lex  loci  laboris.  In  addition, 
in  this  regulation  a  person  pursuing  an  activity  as 
an employed or self-employed person in a Member 
State will be subject to the legislation of that Mem-
ber State (754). Only for non-active persons, the place 
of residence is applicable (755). But questions remain 
about the appropriateness of these conflict rules. 

Did  the  adoption  of  Regulation  (EC)  No  883/2004 
create the right momentum for modifying/adapting 
the conflict rules almost 50 years after the adoption 
of the coordination regulations, and was a unique 
opportunity therefore missed to adopt a new ‘bet-
ter’ (?) conflict rule?

In a process of simplification and rationalisation, the 
new Regulation (EC) No 883/2004 did bring, apart 
from the clear designation rule for non-active per-
sons, some — minor — modifications to the actual 
system,  with  respect  to  the  posting  provisions (756) 
and  the  designation  rules  for  simultaneous  per-
formance  of  professional  activities  in  two  or  more 
Member States (757), just as the only existing excep-

754(

)  Article 11, 3(a) of Regulation (EC) No 883/2004.

755(

)  Article 11, 3(e) of Regulation (EC) No 883/2004.

756(
) 

In particular the extension from the maximum period of posting from 
one year to two years, as well as the inclusion in the new provision of 
conditions that had already been made clear in the case-law of the CJ 
(the fact that the employer, when somebody is posted abroad, needs 
to normally carry out his activities in the sending state, as well as the 
fact  that,  in  the  case  of  the  posting  of  a  self-employed  person,  it  is 
required  that  this  person  pursue  a  similar  activity  in  the  temporary 
state of employment); see Article 12 of Regulation (EC) No 883/2004.

757(

)  Here the most important modifications took place; in particular, the 
specific rule for international transport workers has been abolished, 
so that they now fall under the general rules, just as it is now required 
that  the  person  concerned  fulfils  a  substantial  part  of  his  activities 
in  the  state  of  residence,  before  this  state  becomes  applicable;  see 
Article 13 of Regulation (EC) No 883/2004. 

tion (until now, under Regulation (EEC) No 1408/71) 
to the general principle of the single applicable leg-
islation has been abolished (758). 

II.  a need For a revISIon oF 
The ConFlICT ruleS?

But is a purely cosmetic adaptation of the conflict 
rules sufficient or is there a need to further funda-
mentally  change  the  actual  rules  and  why  should 
we do that?

Which reasons could justify a further reflection on 
new rules of applicable legislation? In our opinion, 
three factors could play a role (759).

In the first place, there is the clear changing migra-
tion pattern. The migrant worker of 50 years ago is 
no longer the migrant worker of today. One of the 
most  important  changes  has  been  regarding  the 
nature of migration itself, with new patterns of work, 
including increasingly flexible labour markers. The 
regulation was set up at a time when workers had 
a  full-time,  permanent  employment  relationship, 
and the migrant worker was someone — usually a 
male  —  who  moved  to  his  country  of  work  (with 
or without his family) and at the end of his career 
returned to his country of origin. People in general 
migrated for better working opportunities and con-
ditions, including higher wages. For example, a typ-
ical migrant working in the coal mines moved for a 
long period to another state, often only returning to 
his country of origin when reaching retirement age. 
This type of migrant worker in particular focused on 

(

(

758

)  Article 13(3) of Regulation (EC) No 833/2004; the actual Annex VII of 
Regulation  (EEC)  No  1408/71.  Compared  with  Regulation  (EEC)  No 
1408/71, Regulation (EC) No 883/2004 abolishes some separate rules 
for special categories of people. Under Regulation (EC) No 883/2004 
there is no special rule anymore for international transport workers; 
there  is  no  longer  a  choice  for  persons  employed  by  diplomatic 
missions or consular posts; no special rule for civil servants working in 
two countries; no rule for undertakings straddling a common frontier; 
no special rule for civil servants insured in a special scheme; and no 
rule for persons not belonging to the crew and working on a vessel 
within the territorial waters or the port. 

759

)  For  a  general  overview  of  general  trends  and  challenges  for  the 
actual regulations, see Y. Jorens and J. Hajdú, European Report 2008 
—  Training  and  reporting  on  European  social  security,  Project  DG 
EMPL/E/3 — VC/2007/0188, Brussels, 125 p. 

170

Yves Jorens

fully  integrating  the  social  security  systems  of  the 
state of his new workplace. When migrating at a later 
age, the biggest problems these persons were con-
fronted with were related to the possible export of 
retirement benefits. Today there is greater diversity, 
with a range of different types of migrant workers 
including, for example, cross-border frontier work-
ers, temporary migrant workers and pan-European 
management personnel, contributing to a growing 
pan-European labour market. Further globalisation 
and the creation of a European internal market has 
led to a growing number of employees being sent 
out by their employer to perform temporary activi-
ties  in  another  Member  State.  People  commute 
weekly or daily to other states and workplaces. The 
career  planning  of  a  worker  today  often  involves 
several  consecutive  international  assignments  (for 
the  short  or  longer  term),  often  within  a  network 
of companies, throughout different Member States. 
It  is  not  so  much  that  the  permanent  move  has 
become the most important trend, but rather that 
the intra- and interorganisational move has.

In particular, migrant workers that are often work-
ing for short periods abroad are more in favour of 
further belonging to their social security system of 
origin and less of being integrated in their country 
of short employment.

It  has  often  been  argued  that  these  new  forms  of 
mobility  are  challenging  the  principles  and  actual 
rules on applicable legislation. Might it indeed not 
be said that the high flexibility combined with the 
short assignments to different Member States, lead-
ing to a constant switch of the lex loci laboris, makes 
this general conflict rule inappropriate? Does it not 
only complicate to a large extent the social security 
situation  of  these  migrant  workers,  but  also  pre-
vents further migration? (760) What is to be said of the 
managers within a multinational group who often 
transfer  their  workplace  from  one  business  loca-
tion  to  another  and  visit,  throughout  their  career, 

(

760

)  A.  Numhauser-Henning,  ‘Freedom  of  movement  and  transfer  of 
social  security  rights’,  in  R.  Blanpain  (ed.),  Collective  bargaining, 
discrimination, social security and European integration, The Hague, 
Kluwer Law International, 2003, 185–186.

several  branches  of  this  group  of  companies? The 
fact  that  these  persons  move  within  a  network  of 
closely related companies, where the worker some-
times even concludes a local employment contract 
with  a  daughter  company,  while  maintaining  his 
main,  but  frozen  labour  contract  with  the  mother 
company,  often  complicates  the  ‘mapping’,  as  it 
becomes unclear who the worker’s employer actu-
ally is. Live-performance workers can, for example, 
take up employment with an EU live-performance 
organisation  in  another  EU  country;  for  example, 
they can be posted as an employee with an EU live-
performance  company  when  this  company  is  per-
forming in other EU countries, or take up a service 
contract  as  a  self-employed  person  in  another  EU 
country (761). The specific problems of mobility that 
these groups of people encounter quite often result 
in the appeal to enact particular conflict rules that 
would be better adapted to the specific characteris-
tics and situations of these categories (762).

In the second place, freedom of movement — the 
fundamental  background  principle  for  the  coordi-
nation  regulations  —  has  evolved  and  has  moved 
from  an  economic  perspective  to  a  wider  idea  of 
human  rights.  The  relationship  between  the  free 
movement of workers as an instrument and the eco-
nomic concern of the European Union has changed 
into a growing union of citizens. The migrant work-
er  is,  in  the  first  place,  not  an  economic  person, 
but  a  human  being  looking  to  improve  his  living 
and working conditions. In the same way, the free 
movement of workers has evolved towards a union 
of ‘European citizens’. The economic dimension has 
moved  to  the  background,  in  order  to  establish  a 
legal order consistent with the idea of social justice 
and people’s expectations of European integration, 
as it can be understood from the general objectives 

761(

)  See,  for  example,  R.  Pollachek, ‘Study  on  impediments  to  mobility 
in  the  EU-live-performance  sector  and  on  possible  solutions’,  study 
performed for Pearle, Mobile.Home Project, Helsinki, 2007, 14.

762(

)  R.  Pollachek,  ‘Study  on  impediments  to  mobility  in  the  EU-live-
performance sector and on possible solutions’, study performed for 
Pearle,  Mobile.Home  Project,  Helsinki,  2007,  and  ERA  Green  Paper, 
‘Realising a single labour market for researchers’, RTD DG and Council 
conclusions of 30 September 2008, No 13571/08.

171

50 years of Social Security Coordination 

Past – Present – Future

of the Treaties (763). ‘The creation of citizenship of the 
Union, with the corollary of freedom of movement 
for citizens throughout the territory of the Member 
States,  represents  a  considerable  qualitative  step 
forward  in  that  it  separates  that  freedom  from  its 
functional  or  instrumental  elements  (the  link  with 
an economic activity or attainment of the internal 
market)  and  raises  it  to  the  level  of  a  genuinely 
independent right inherent in the political status of 
the citizens of the Union’ (764).

This  creation  of  European  Union  citizenship,  also 
as  interpreted  by  the  Court  of  Justice  (CJ) (765),  has 
established  a  new  set  of  rights  for  economically 
inactive  people,  until  then  almost  ignored  under 
European  Union  law (766),  and  has  given  them  the 
status  of  active  claimants  of  social  welfare  provi-
sion,  even  when  they  have  not  been  or  are  not 
exercising  an  economic  activity (767).  As  the  CJ 
applies the provisions of European citizenship also 
in  cases  that  are  covered  by  the  European  regula-
tions, it has made clear that the coordination Regu-
lation  (EEC)  No  1408/71  (and  in  future  Regulation 
(EC) No 883/2004) is not the only means for people 
to obtain social security benefits and rights. A new 
notion of European solidarity has been created (768).

763(

)  See  A.  Touffait,  ‘La  jurisprudence  de 

la  Cour  de  Justice  des 
Communautés  Européennes  en  matiere  de  sécurité  sociale  des 
travailleurs  Européens  qui  se  déplacent’,  Mélanges  offerts  a  P.H. 
Teitgen, Paris, 1984, 525.

764(

)  Advocate  General  Ruiz-Jarabo  Colomer,  para.  82  of  the  opinion 
delivered  in  Morgan  (Joined  Cases  C-11/06  and  C-12/06  Morgan 
[2007] ECR, 9161. 

765(

)  Case C-85/96 Martinez Sala [1998] ECR 2691; Case C-184/99 Grzelczyk 
[2001]  ECR  6193;  Case  C-413/99  Baumbast  [2002]  ECR  7091;  Case 
C-138/02 Collins [2004] ECR 2703; Case C-456/02 Trojani [2004] ECR 
7573;  Case  C-138/02  Collins  [2004]  ECR  2703;  Case  C-209/03  Bidar 
[2005] ECR 2119; Case C-192/05 Tas-Hagen [2006] ECR I- 10451; Case 
C-406/04 De Cuyper [2006] ECR 6947.

766(

)  The  rights  of  economically  non-active  people  were  elaborated  in 
the three residence directives (90/364/EEC on the rights of residents; 
90/365/EEC on the right of residence for employees and self-employed 
persons who have ceased their occupational activity; and 93/96/EEC 
on  the  right  of  residence  for  students). These  three  directives  have 
now been replaced by the general residence directive (2004/38/EC). 

767(

)  E.  Spaventa,  Free  movement  of  persons  in  the  European  Union. 
Barriers  to  movement  in  their  constitutional  context,  The  Hague, 
Kluwer Law International, 2007, 114–115.

768(

)  See  also  M.  Ross,  ‘Promoting  solidarity:  From  public  services  to  a 
European model of competition?’, Common Market Law Review 2007, 
1065;  M.  Coucheir  (ed.),  M.  Sakslin  (ed.),  S.  Giubboni,  D.  Martinsen 
and  H.  Verschueren,  Think  Tank  Report  2008:  The  relationship  and 
interaction  between  the  coordination  regulations  and  Directive 
2004/38/EC  —  Training  and  reporting  on  European  social  security, 
Project DG EMPL/E/3 — VC/2007/0188, Brussels, 2008, 37ff.

172

This  brings  us  to  the  third  (and  very  closely  relat-
ed to the concept of European citizenship) reason 
why it is necessary to take a closer look at the rules 
on  applicable  legislation.  At  the  same  time  as  the 
first  cases  of  European  citizenship  appeared  in 
the  social  field (769),  people,  i.e.  also  workers,  were 
relying directly on other EU Treaty provisions, per-
haps  hardly  believing  that  they  could  influence 
their  concrete  social  security  rights. With  its  cases 
in  the  field  of  healthcare (770),  the  CJ  attacked  the 
national  conditions  of  refusal  to  reimburse  medi-
cal  treatment  abroad  under  the  internal  market 
rules, in particular the free movement of goods and 
services,  thereby  opening  to  Community  nation-
als a second way of receiving cross-border medical 
care  in  addition  to  Article  22  of  Regulation  (EEC)  
No  1408/71.  As  a  result  of  this  case-law,  two  dif-
ferent  procedures,  one  having  no  primacy  over 
the  other,  govern  the  healthcare  costs  incurred  in 
another  Member  State (771).  These  examples  made 
clear that people could obtain social rights directly 
on the basis of the principles of free movement.

An  important  development  taking  place  in  this 
respect  is  the  direct  reliance  on  the  general  prin-
ciples  of  free  movement  of  persons  (Article  39) 
by  European  workers,  in  order  to  combat  possi-
ble  limitations  to  their  fundamental  rights,  limita-
tions that not only are the result of national rules, 
but  also  sometimes  follow  from  the  application 
of  the  EU  regulations  themselves.  The  traditional 
non-exportability  of  certain  benefits  under  the 
regulation,  such  as  special  non-contributory  ben-
efits  or  unemployment  benefits,  could  be  increas-
ingly  questioned  under  the  direct  applicability  of 
the general principles of free movement of the EU  
Treaty. Recent CJ case-law, but also developments at 
the national level, have made clear that even inclu-
sion in Annex IIa of the regulation, exempting the 

(

(

(

769

)  Case C-85/96 Martinez Sala [1998] ECR 2691.

770

)  Starting with Cases C-120/95 Decker [1998] ECR I-1831, and C-158/96 

Kohll [1998] ECR 1931.

771

)  Y.  Jorens,  M.  Coucheir  and  F. Van  Overmeiren, ‘Access  to  healthcare 
in  an  internal  market:  impact  for  statutory  and  complementary 
systems’,  basic  report,  Brussel,  AIM,  2005,  Bulletin  Luxembourgeois 
des questions sociales, 18, 2005, 13.

Yves Jorens

national  authorities  from  the  obligation  to  export 
these  benefits,  is  not  necessarily  the  end  of  the 
story. CJ cases, such as De Cuyper (772), Petersen (773) or 
Hendrix (774), have shown that the non-exportability 
of  certain  benefits  has  to  be  looked  at  alongside 
the right of freedom of movement under Article 39 
EC Treaty or European citizenship under Article 18 
EC  Treaty.  Under  these  circumstances,  conditions 
of residence can only be put forward if their object 
would be justified and proportionate to the objec-
tive pursued. This might end up with other results. 
In  the  Hendrix  case  for  example,  although  the  CJ 
considered  a  benefit  for  young  disabled  people, 
listed in Annex IIa of the regulation, as non-export-
able,  it  questioned  its  compatibility  with  the  prin-
ciples  of  freedom  of  movement  under  Article  39 
EC Treaty. It was up to the national court to answer 
and,  after  weighing  the  national  legislation  in  the 
light of these principles, the national court declared 
the non-export clause not to be applicable. Exam-
ples such as these confirm that the regulations are 
no longer the only route towards the coordination 
of social security for migrant workers. This is also a 
growing tendency not only in the field of the free 
movement  of  workers  but  also  in  the  field  of  the 
free  movement  of  services.  In  the  Rüffert  case  (775) 
on  minimum  wage,  dealing  with  Directive  96/71/
EC, the CJ directly investigated the requirement of 
payment of a salary — a domain clearly regulated 
by  this  directive  —  within  the  perspective  of  the 
free movement of services.

Relying  directly  on  the  EU  Treaty  has  as  a  conse-
quence that every rule will now be judged against 
the general test of free movement, i.e. is the appli-
cation  of  the  rule  concerned  an  impediment,  for 
which no objective justification can be found, and 
is the principle of proportionality respected? While 
finding an objective justification might still be easy, 
it  becomes  much  more  complicated  to  pass  the 
proportionality test. The non-exportability of some 

of the benefits is a clear example. In the De Cuyper 
case (776) the CJ confirms that the residence clause, 
which is imposed on an unemployed person, who 
is  exempt  from  the  requirement  of  providing  that 
he  is  available  for  work  as  a  condition  for  retain-
ing  his  entitlement  to  unemployment  benefits,  is 
a  restriction,  which  was,  however,  justified  by  the 
need to monitor the employment and family situa-
tion of an unemployed person. Looking at this justi-
fication, it is obvious that the CJ was very receptive 
to  the  arguments  used  by  the  Belgian  Member 
State,  arguments  which  were  in  actual  fact  hardly 
convincing  at  all.  It  is  clear  that  similar  restriction 
rules  might  have  more  difficulties  in  the  future  to 
pass  the  free  movement  test.  This  is  clearly  con-
firmed in the Petersen case (777), regarding the non-
exportability of an advance granted to unemployed 
persons  who  applied  for  the  grant  of  invalidity 
benefits and which was considered by the CJ as an 
unemployment  benefit.  Here  the  CJ  clearly  states 
that,  unless  it  is  objectively  justified  and  propor-
tionate to the aim pursued, such non-exportability 
must  be  regarded  as  indirectly  discriminatory  if  it 
is intrinsically liable to affect migrant workers more 
than national workers and if there is a consequent 
risk that it will place the former at a disadvantage. 
Although  the  CJ  states  that  the  EU  regulations  do 
not preclude the legislation of a Member State from 
making  entitlement  to  an  unemployment  benefit 
conditional  on  residence,  at  least  in  normal  situa-
tions, this was not true with respect to the particu-
lar situation of Mr Petersen. The CJ argues that the 
Austrian government had not sought to explain the 
objective, which is to be achieved by the residence 
requirement, but even so — although it is possible 
that the risk of seriously undermining the financial 
balance of a social security system may in particu-
lar  (author’s  own  italics)  constitute  an  overriding 
reason  in  the  general  interest.  The  existence  of 
such a risk would be difficult to establish, since, by 
granting the benefit to applicants who reside in the 

(

(

(

(

772

)  Case C-406/04 De Cuyper [2006] ECR 6947.

773

)  Case C-228/07 Petersen [2008] ECR I-6989.

774

)  Case C-287/05 Hendrix [2007] ECR 6909.

775

)  Case C-346/06, Rüffert [2008] ECR 1989.

776(

)  Case C-406/04 De Cuyper [2006] ECR 6947. 

777(

)  Case C-228/07 Petersen [2008] ECR I-6989.

173

50 years of Social Security Coordination 

Past – Present – Future

national  territory,  the  competent  authorities  have 
in fact demonstrated their capacity to bear the eco-
nomic burden of that benefit. As it is also intended 
to be paid to applicants for an invalidity pension for 
a limited period of time, the residence requirement 
also seems to be disproportionate.

The national rule, as well as the rule of Regulation 
(EEC) No 1408/71, is crushed under direct applica-
tion  of  the  EU  Treaty  provisions,  where  Member 
States  are  now  confronted  with  a  task  they  often 
forget, i.e. the concrete justification in the particular 
case assessed in the light of the proportionality test 
— however, not in a very abstract way, but applied 
to  the  particular  situation  of  the  case  and  of  the 
person  concerned.  Also  in  the  Baumbast  case (778) 
the CJ applies the principle of proportionality to the 
facts of the case (779); the CJ chose to scrutinise the 
rules  in  concreto,  taking  into  account  the  facts  of 
the particular case. Even in cases in which the legis-
lation is in principle compatible with the demands 
of  Community  law,  applied  in  the  concrete  situa-
tion,  it  might  be  contrary  to  it (780).  Member  States 
will  be  required  to  pay  much  more  attention  to 
the concrete justification in cases and cannot limit 
themselves to general statements. For the individ-
ual  looking  for  protection  under  Community  law, 
it  might  be  easier  to  attack  the  conformity  of  the 
national rules with EC law.

This  in  concreto  evaluation  has  further  led  to  an 
increased  review  of  the  conformity  of  secondary 
European legislation with the general principles of 
EU law (781). The CJ does not hesitate to investigate 

(

(

(

(

778

)  Case C-413/99 Baumbast [2002] ECR 7091.

779

)  See justification 92. In a recent case, the Förster case (Case C-158/07 
Förster, judgment of 18 November 2008, not yet published) dealing 
with  a  maintenance  grant,  the  CJ  looks  at  the  situation  from  an 
abstract rather than a concrete point of view. It remains unclear if the 
CJ  herewith  wants  to  deviate  from  its  previously  established  case-
law  according  to  which  the  concrete  individual  factual  situation  is 
taken  into  account  (see  also  the  contribution  of  E.  Spaventa  in  this 
publication). 

780

)  E.  Spaventa,  Free  movement  of  persons  in  the  European  Union. 
Barriers  to  movement  in  their  constitutional  context,  The  Hague, 
Kluwer Law International, 2007, 155.

781

)  M.  Coucheir  (ed.),  M.  Sakslin  (ed.),  S.  Giubboni,  D.  Martinsen  and  H. 
Verschueren, Think Tank Report 2008: The relationship and interaction 
between  the  coordination  regulations  and  Directive  2004/38/EC 
—  Training  and  reporting  on  European  social  security,  Project  DG 
EMPL/E/3 — VC/2007/0188, Brussels, 2008, 36–37.

the conformity of national rules, even if they follow 
secondary European legislation, directly under the 
EC Treaty rules. This amounts, as Dougan points out, 
to ‘a judicial review of that very Community legisla-
tion, not of the privileged sort one would expect as 
regards  questions  of  competence  in  the  exercise 
of Community’s own legislative powers, but rather 
of  the  frontline  sort  one  witnesses  all  the  time  as 
regards  national  provisions  restricting  free  move-
ment under the primary Treaty provisions’ (782). The 
review of proportionality performed by the CJ could 
be seen to pose a challenge to the European legis-
lature’s  autonomy,  competencies  and  powers (783). 
National rules in conformity with the coordination 
Regulation (EEC) No 1408/71 (and the future Regu-
lation (EC) No 883/2004), as well as the social secu-
rity  coordination  regulation  itself,  will  increasingly 
be confronted with the test of conformity with the 
fundamental principles of EU law (784). The ultimate 
framework  is  no  longer  the  regulations,  but  the 
conformity with free movement.

The  abovementioned  reasons  make  it  clear  that, 
although we all may be to a lesser or larger extent 
satisfied with the actual rules, it could happen that 
the  actual,  but  also  future,  coordination  rules  will 
be under further attack regarding their conformity 
with the general principles of EU law as elaborated 
by the provisions on EU citizenship, free movement 
of  workers,  free  movement  of  services  and  even 
free movement of goods. 

(

(

(

782

)  M. Dougan, ‘The constitutional dimension to the case-law on Union 

citizenship’, European Law Review 2006, 620–621.

783

)  See  also  S.  Besson  and  A.  Utzinger, ‘Introduction:  Future  challenges 
of  European  citizenship  —  Facing  a  wide-open  Pandora’s  Box’, 
European  Law  Journal  2007,  575;  and  M.  Coucheir  (ed.),  M.  Sakslin 
(ed.), S. Giubboni, D. Martinsen and H. Verschueren, Think Tank Report 
2008:  The  relationship  and  interaction  between  the  coordination 
regulations  and  Directive  2004/38/EC  — Training  and  reporting  on 
European  social  security,  Project  DG  EMPL/E/3  —  VC/2007/0188, 
Brussels, 2008, 37.

784

)  See  justification  57  of  the  conclusions  of  Advocate  General  Kokott 
in  Case  C-287/05  Hendrix  [2007]  ECR  6909  ‘Thus,  a  restriction  on 
the  fundamental  freedoms  must  be  justified  by  overriding  reasons 
in  the  general  interest  even  where  that  restriction  derives  from  a 
Community regulation or a national measure which is in accordance 
with secondary law. Admittedly, Community and national legislatures 
enjoy  a  discretion  when  adopting  measures  in  the  general  interest 
which  affect  the  fundamental  freedoms.  The  CJ  retains  the  right, 
however, to examine whether legislatures have exceeded the scope 
of that discretion and infringed thereby the fundamental freedoms.’

174

Yves Jorens

III.  are The aCTual ConFlICT 
ruleS eC reSISTanT?

a.  New rules for new migration patterns?

Are the regulations adapted to this new framework? 
Is today not the right moment, while we celebrate 
50  years  of  regulations,  to  reflect  on  the  possible 
revision of a system of conflict rules that has existed 
for 50 years?

Quite  often  the  debate  revolves  around  new  or 
adapted  rules  that  should  take  into  account  new 
patterns of migration.

Within the general objective of the new regulation 
to  simplify  and  modernise  the  actual  provisions, 
some  special  rules  —  for  special  groups  —  that 
were  complicating  the  coordination  system  were 
abolished.  In  this  respect,  the  adaptation  and 
enacting  of  special  provisions  for  ‘new’  forms  of 
mobility would contradict the rationalisation proc-
ess started under Regulation (EC) No 883/2004. The 
new  inclusion  of  specific  rules  for  so-called  ‘new’ 
categories  could  lead  to  an  increasing  number  of 
demands  from  other  groups,  increasing  the  frag-
mentation  and  uniform  application  of  the  conflict 
rules. Generally, it can be acknowledged that link-
ing rules of conflict with categories of employees is 
not a convincing approach. It appears, in line with 
the  Administrative  Commission  on  Social  Security 
for  Migrant  Workers  (CASSTM) (785),  that  very  few 
situations seem to require specific treatment.

Artists, airplane crews, etc. already moved about in 
the past. Certainly not to the same extent, but advo-
cating that special provisions should be adopted to 
take into account of these forms of mobility would 
somehow  presume  that  the  European  legislator 
originally ignored, to a lesser or larger extent, these 
groups of people. Some forms of mobility are there-
fore  not  really  new,  but  have  just  become  more 

(

785

)  See document of 4 October 2007, 278/07 REV.

frequent. The use of interim agencies and the appli-
cation  of  the  conflict  rules  in  these  circumstances 
has  been  recognised  for  decades.  Already  in  1970 
the CJ had to deal with the application of the post-
ing provisions with respect to interim agencies (786). 
Some other forms, like air crews, were regarded as 
transport workers.

These examples show that some of the issues relat-
ed  to  new  forms  of  mobility  result,  not  so  much 
from  the  inappropriateness  of  the  existing  rules, 
but rather from the difficulties inherent in under-
standing the concepts and their implementation. 
One  could  therefore  argue  that  Regulation  (EEC) 
No 1408/71 and Regulation (EC) No 883/2004 are 
in  fact  reasonably  well  adjusted  to  new  forms  of 
mobility.  What  is  required  is  agreement  over  the 
interpretation  of  the  concepts  and  their  effec-
tive  implementation,  rather  than  any  wholesale 
change to the principles or operative concepts of 
the regulations (787).

The  expert  group  working  on  the  free  movement 
for researchers, for example, wants to promote the 
use of Article 17 agreements (Article 16 of Regula-
tion  (EC)  No  883/2004)  as  a  method  for  avoiding 
impediments  to  the  free  movement  of  these  per-
sons, in order to better take into account their par-
ticular situation (788). The performance sector would 
also like to see the procedures to receive E101 forms 
made easier (789).

Better use of the actual provisions, however, implies 
the need for further clarification. The lack of clarity 
and the different interpretation of the rules regard-
ing the provisions on applicable legislation will not 
only  result  in  the  controversial  use,  and  perhaps 
even incorrect application, of the actual provisions, 

786(

)  Case C-35/70 Manpower [1970] ECR 1263.

787(

)  See Y.  Jorens  (ed.),  J-P.  Lhernould  (ed.),  J-C.  Fillon,  S.  Roberts  and  B. 
Spiegel,  Think  Tank  Report  2008  —  Towards  a  new  framework  for 
applicable legislation. New forms of mobility, coordination principles 
and  rules  of  conflict  —  Training  and  reporting  on  European  social 
security, Project DG EMPL/E/3 — VC/2007/0188, Brussels, 2008, 7.

788(

)  See Council conclusions of 30 September 2008, DOC13571/08.

789(

)  See,  for  example,  R.  Pollachek, ‘Study  on  impediments  to  mobility 
in  the  EU-live-performance  sector  and  on  possible  solutions’,  study 
performed for Pearle, Mobile.Home Project, Helsinki, 2007, 34.

175

50 years of Social Security Coordination 

Past – Present – Future

but  might  also  become  the  object  of  complaints 
before the CJ. A typical example of inconsistent use 
is the application of Article 17 of Regulation (EEC) No 
1408/71 (Article 16 of Regulation (EC) No 883/2004) 
that allows Member States to conclude agreements 
in  the  interest  of  the  migrant  worker  that  deviate 
from the conflict rules. Every Member State applies 
its own rules which often differ from one another, 
not only between the states concerned, but some-
times even within the same state. One day it might 
even be difficult to explain to the CJ why workers in 
identical circumstances fall under different legisla-
tions due to different views among Member States 
about  the  application  of  this  article.  Could  this  be 
challenged  on  the  grounds  of  discrimination? (790)  
It is of course true that one of the fundamental dif-
ficulties  in  this  respect  is  that  the  regulation  is  a 
coordination  instrument  and  does  not  harmonise 
social  security,  thereby  leaving  the  responsibil-
ity  for  implementation  to  the  Member  States.  It  is 
therefore not the priority role of the European legis-
lator to define the concept used, but a guiding role 
could be welcomed.

Of  course,  it  cannot  be  ignored  that,  at  least  with 
respect  to  the  growing  flexible  labour  market,  an 
increasing  number  of  specific  forms  of  mobility 
related to new forms of labour contracts are appear-
ing: people working with fixed-term contracts; peo-
ple  working  temporarily  for  employers  via  interim 
agencies;  people,  for  a  short  time,  at  the  disposal 
of  heavily  integrated  companies;  people  working 
at  home  (teleworking);  people  moving  constantly 
within  a  multinational  group  or  simultaneously 
working  at  different  plants  in  different  Member 
States,  sometimes  with  contracts  concluded  with 
several  branches,  etc.  But  is  it  always  a  problem 
of  adopting  new  rules?  Are  the  problems  not  also 
related  to  the  difficult  ways  of  understanding  and 
implementing the basic concepts of the actual con-
flict rules? Working in an international, intra-organ-
isational network of enterprises is a typical example 

of that. The related problem is that the ownership of 
equipment and employment of personnel increas-
ingly rests with different undertakings, staff being 
typically employed by ‘global’ employment compa-
nies. How do we define the employer? Does it make 
sense  to  look  at  this  network  of  companies  as  a 
group of separate enterprises, each with their judi-
cial personality, or should we look at it as one big 
entity,  where  the ‘mother’  company  is  the  leading 
employer? What  is  the  impact  if  a  contract  is  con-
cluded with a ‘daughter’ company? Is the employer 
the  one  with  whom  a  labour  contract  is  conclud-
ed,  or  is  it  rather  the  mother  company  who  holds 
authority  over  the  different  branches  or  daughter 
companies?  Let  us  refer  to  a  recent  case  before 
the  French  Court  de  Cassation (791).  An  employee 
working for the mother company Oréal ended her 
contract  when  she  was  mutated  to  the  daughter 
company in China. She concluded a labour contract 
with  this  daughter  company  but  was  fired  when 
she  became  pregnant.  According  to  the  Court  de 
Cassation, there was an unjustified dismissal as no 
reclassification  took  place.  Notwithstanding  the 
fact  that  a  contractual  relation  no  longer  existed 
between  the  mother  company  and  the  employee, 
the court considered that the mother company was 
still  responsible  as  it  took  the  initiative  to  put  the 
employee at the disposal of the daughter company. 
Is  the  main  company  therefore  the  real  employ-
er? Would  it  not  be  possible  in  such  cases  for  the 
employee,  during  the  whole  period  of  employ-
ment,  to  be  subject  to  the  place  where  the  main 
employer is situated? But imagine also the case of 
an employee transferred to another daughter com-
pany  with  whom  he  concludes  a  labour  contract 
while the initial contract with the mother company 
is  frozen  and  lies  dormant.  It  is  foreseen  that  the 
person  concerned  will  eventually  be  reintegrated 
into the mother company or will obtain a guaran-
tee that, at the end of the period of employment at 
the daughter company, he will get a new job at the 
mother company or a similar function somewhere 

790(

)  See  Y.  Jorens  and  J.  Hajdú,  European  Report  2008  —  Training  and 
reporting  on  European  social  security,  Project  DG  EMPL/E/3  — 
VC/2007/0188, Brussels, 8.

(

176

791

)  See  Lhernould,  J-P., 

la  société-mère  suite  au 
licenciement du salarié mis à disposition d’une filiale étrangère, Cass. 
Soc. 13 novembre 2008, pourvoi No 07-41700’, Dr Soc. 2009, 69.

‘Obligations  de 

Yves Jorens

within the group. Can the idea of reintegration be 
seen as an element for determining the place with 
the closest connection and as such for determining 
the most appropriate conflict rule? Would it not be 
better to look at such a situation from a more life-
oriented global approach?

But a concrete answer to the challenges mentioned 
above requires more than a merely cosmetic adap-
tation of the conflict rules. The question is whether 
the actual rules would pass the test of the general 
principles of free movement? It should also be tak-
en into account that, if new rules were elaborated, 
they should be in conformity with these principles. 
Would it not therefore be better if we reflected on 
a  possible  new  framework,  and  investigated  the 
fundamental principles and philosophy behind the 
actual  system,  i.e.  the  neutral  character,  the  com-
pulsory  character  and  the  exclusive  and  strong 
effect of the conflict rules? (792)

b.  Towards a new fundamental 

approach?

1. 

The objectives of the regulations

A  preliminary  question  before  possibly  changing 
the  actual  conflict  rules  is  to  find  out  for  whom 
these  coordination  regulations  are  written. Whom 
should they protect?

The  coordination  regulations  are  an 
instru-
ment  adopted  to  guarantee  the  free  movement 
of  workers.  As  the  preamble  to  Regulation  (EC)  
No  883/2004  clearly  states:  ‘the  rules  for  coor-
dination  of  national  social  security  systems  fall 
within  the  framework  of  free  movement  of  per-
sons  and  should  contribute  towards  improving 

their standard of living and conditions of employ-
ment’ (793).  The  objective  of  the  new  regulations 
was to guarantee that the right to free movement 
of persons can be exercised effectively (794).

The coordination regulations therefore fit perfect-
ly  with  the  general  objectives  of  the  EU Treaty  as 
enshrined  in  Article  2,  to  promote  a  high  level  of 
social protection and to raise the standard of living. 
From the beginning, the CJ declared that the regu-
lations  in  the  field  of  social  security  have  as  their 
basis,  their  framework  and  their  limitations  Arti-
cles 48 to 51 (39–42) of the Treaty, which are aimed 
at securing freedom of movement for workers (795). 
The  coordination  regulations  therefore  have  to 
be  interpreted  in  the  light  of  the  free  movement 
of  workers.  The  interests  of  the  workers  obtain  a 
central  place  in  the  coordination  framework.  The 
regulation, however, only installs a ‘system of coor-
dination, not the harmonisation, of the legislation 
of the Member States’. As a result, Article 51 (now 42)  
leaves  in  differences  between  the  Member  States’ 
social  security  systems  and,  consequently,  in  the 
rights of persons working in the Member States. It 
follows that substantive and procedural differences 
between  the  social  security  systems  of  individual 
Member States, and hence in the rights of persons 
working  in  the  Member  States,  are  unaffected  by 
Article  51  (now  42)  of  the  Treaty (796).  As  a  matter 
of fact, it is not obvious whether one is insured at 
all by the appointed legislation. Indeed, it is up to 
the  legislator  of  each  Member  State  to  lay  down 
the conditions creating the right or the obligation 
to become affiliated to a social security scheme or 
to  a  particular  branch  of  such  a  scheme  or  to  be 
entitled to a benefit (797). The person concerned will 
therefore  only  be  insured  if  he  or  she  fulfils  the 
national  conditions.  Just  as  social  security  is  only 

(

792

)  This was exactly the task that the Think Tank on new forms of mobility 
and  applicable  legislation  is  undertaking  within  the  Tress  project. 
This report is therefore also indebted to the reflections and ideas put 
forward by this Think Tank, to whom the author of this article belongs 
(see Y. Jorens (ed.), J-P. Lhernould (ed.), J-C. Fillon, S. Roberts and B. 
Spiegel,  Think  Tank  Report  2008  —  Towards  a  new  framework  for 
applicable legislation. New forms of mobility, coordination principles 
and  rules  of  conflict  —  Training  and  reporting  on  European  social 
security, Project DG EMPL/E/3 — VC/2007/0188, Brussels, 2008). The 
activities of the Think Tank will continue in the year 2009.

793(

)  Point 1 Preamble.

794(

)  Point 45 Preamble. 

795(

)  Case C-100/63 Van der Veen [1964] ECR 565; see also Case C-242/83 

Patteri [1984] ECR 3171.

796(

)  Case C-41/94 Pinna [1986] ECR 1.

797(

)  Case C-29/88 Schmitt [1989] ECR 581; Case C-2/89 Kits van Heijningen 
[1990] ECR 755, para. 19; Case C-275/96 Kuusijärvi [1998] ECR 3419, 
para. 29; and Case C-227/03 Van Pommeren-Bourgondiën [2005] ECR, 
para. 33.

177

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Past – Present – Future

coordinated within the EC, the EC Treaty offers no 
guarantee to a worker that extending his activities 
into  more  than  one  Member  State  or  transferring 
them  to  another  Member  State  will  be  neutral  as 
regards  social  security.  It  follows  that,  in  princi-
ple,  any  disadvantage,  compared  with  a  worker 
who pursues all his activities in one Member State, 
resulting from the extension or transfer of his activ-
ities  into  one  or  more  other  Member  States  and 
from his being subject to additional social security 
legislation,  is  not  contrary  to  Articles  48  and  52 
(now 39 and 43) of the EC Treaty if that legislation 
does not place that worker at a disadvantage com-
pared with those who pursue all their activities in 
the Member State where it applies (798).

With  respect  to  the  conflict  rules,  the  CJ  has  con-
stantly explained the objectives of these rules from 
the perspective of the worker: ‘the aim of the provi-
sions of Title II of Regulations Nos 3/58 and 1408/71, 
which determine the legislation applicable to work-
ers moving within the Community, is to ensure that 
the persons concerned shall be subject to the social 
security scheme of only one Member State, in order 
to  prevent  more  than  one  national  legislative  sys-
tem from being applicable and to avoid the compli-
cations which may result from that situation’ (799).

This  predominant  role  of  the  worker  in  the  objec-
tives of the regulations does not, however, exclude 
other  parties,  traditionally  involved  in  the  social 
security field, from playing a role. This is particularly 
clear with respect to the conflict rules. We already 
mentioned, for example, that the CJ declared that 
it  is  not  only  the  worker  who  is  subject  to  that 
state, but also the employer, and the fact that the 
employer should pay less contributions in his state 
of establishment is of no relevance (800).

(

(

798

)  For  example,  Cases  C-393/99  and  C-399/99  Hervillier  [2002]  ECR 
I-2829; see also C-493/04 Piatkowski [2006] ECR I-2369. The same as 
a matter of fact also applies in the field of, for example, fiscal law (see 
Case C-365/02 Lindfors [2004] ECR 7183).

799

)  See, for example, Case C-60/85 Luijten [1986] ECR 2365; Case C-2/89 
Kits  van  Heijningen  [1990]  ECR  755;  Case  C-196/90  De  Paep  [1991] 
ECR  4815,  para.  18;  Case  C-202/97  Fitzwilliam  [2000]  ECR  883,  para. 
20; Case C-275/96 Kuusijärvi [1998] ECR 3419, para. 28; Case C-101/83 
Brusse [1984] ECR 2223, para. 14

(

800

)  Case C-8/75 Le Football Club d’Andlau [1975] ECR 739. 

Where an employee is insured therefore also influ-
ences  the  situation  of  the  employer.  In  particular 
with  respect  to  the  posting  rules,  which  are  also 
related  to  the  free  movement  of  services  and  as 
such to the interest of the employer, the CJ declares 
that  Article  13(1)(a)  of  Regulation  No  3  aims  at 
overcoming  the  obstacles  likely  to  impede  the 
freedom  of  movement  of  workers  and  at  encour-
aging  economic  interpenetration  whilst  avoiding 
administrative  complications  for  workers,  under-
takings  and  social  security  organisations (801).  So, 
apart  from  the  employees,  the  conflict  rules  are 
also  installed  in  the  interest  of  the  employer  and 
the social security institutions.

2. 

The balance of interests

A  possible  review  of  the  framework  on  applica-
ble  legislation  should  therefore  not  lose  sight  of 
the  role  and  involvement  of  these  three  parties 
(employee,  employer  and  administration)  and 
should  find  the  right  balance  between  the  inter-
ests  of  these  three  stakeholders.  This  is  the  idea 
that the Think Tank of Tress on new forms of mobil-
ity  elaborated:  the  balance  of  interests  should 
determine the applicable legalisation.

The  interests  of  these  three  parties  are,  however, 
different and sometimes contradictory (802).

For  the  employee  what  counts  will  be:  that  there 
is  no  change  in  the  insurance  career  to  build  up 
long-term benefits (especially pensions); to get the 
highest  possible  benefits  (e.g.  no  loss  of  benefits 
from  the  home  country,  especially,  for  example, 
long-term  care,  family  benefits);  to  safeguard  the 
necessary  flexibility  so  that  the  employer  cannot 
choose another employee who is easier to handle 

(

801

)  See Case C-35/70 Manpower [1970] ECR 1263, para. 10; later confirmed 
in,  for  example,  Case  C-202/97  Fitzwilliam  [2000]  ECR  883,  para.  28; 
and Case C-404/98 Plum [2000] ECR 9379, para. 19.

802

(

)  See Y.  Jorens  (ed.),  J-P.  Lhernould  (ed.),  J-C.  Fillon,  S.  Roberts  and 
B.  Spiegel,  Think  Tank  Report  2008  —  Towards  a  new  framework 
for  applicable  legislation.  New  forms  of  mobility,  coordination 
principles  and  rules  of  conflict  —  Training  and  reporting  on 
European  social  security,  Project  DG  EMPL/E/3  —  VC/2007/0188, 
Brussels, 2008), 16–17.

178

Yves Jorens

and  cannot  get  rid  of  the  non-flexible  employee 
who  insists  on  a  social  security  situation  which  is 
contrary to the interests of the employer; to pay the 
lowest  contributions  (as  long  as  they  lead  to  ben-
efits); to have the legislation of the same Member 
State applicable in the fields of social security, taxa-
tion and labour law — as this would guarantee that 
all  his  different  rights  would  be  linked  to  one  and 
the same place, i.e. his central place of interest.

For the employer, however, other interests will be 
important:  to  be  confronted  with  only  the  home 
social security scheme because only this one is well 
known; to have the legislation of the same Mem-
ber State applicable in the fields of social security, 
taxation  and  labour  law  as  this  would  facilitate 
administration; to make full use of the competitive 
advantages  of  the  free  market  (to  use  these  pos-
sibilities  to  have  the  cheapest  labour  force)  —  at 
least  not  to  have  to  pay  more  contributions  than 
local  competitors  and  to  be  flexible  enough  so 
that  (the  high-ranking)  employees  are  willing  to 
move (if the negative impact on the employees is 
too big, this could hinder any cross-border activity 
of the employer).

Last but not least there are the social security insti-
tutions. For them it will be important to have only 
contribution-payers  resident  in  the  relevant  Mem-
ber  State  (as  any  cross-border  execution  of  con-
tribution  debts  is  cumbersome  and  takes  a  long 
time). Taking into account situations in other Mem-
ber States is always more complicated than taking 
into account only the well-known situations inside 
the state (e.g. income in one state could be differ-
ent  from  the  notion  of ‘income’  in  the  other  state) 
and it avoids disputes with the institutions of other 
Member States.

Should the interest of the employee not take prior-
ity, taking into account the clear free movement of 
workers’ framework of the regulations? This may be 
the case, but the CJ is not always very clear on this 
issue. We already mentioned that the principles of 
free  movement  of  services  can  also  play  a  role.  In 
recent years in particular we have noticed a grow-
ing  interest  in,  and  number  of  cases  dealing  with, 
the conflict between the free movement of services 
and the social protection of workers. In these cases, 
the CJ takes the economic interest of the employer 
as  a  starting  point (803)  and  makes  the  social  rights 
dependent  on  the  exercise  of  the  economic  free 
movement  of  services.  Avoiding  social  dumping 
for  example,  clearly  at  the  heart  of  social  protec-
tion,  can  only  be  combated  within  the  framework 
of the posting Directive 96/71/EC, based on the free 
movement of services.

The role of the third stakeholder, i.e. the social secu-
rity institutions, might, however, be of lesser impor-
tance. The CJ made clear that Article 48 of the Treaty 
(now  39)  precludes  a  Member  State  from  levying, 
on a worker who has transferred his residence from 
one Member State to another in the course of a year 
in order to take up employment there, higher social 
security  contributions  than  those  which  would  be 
payable, in similar circumstances, by a worker who 
has continued to reside throughout the year in that 
Member  State  without  the  first  worker  also  being 
entitled  to  additional  social  benefits. The  CJ  clear-
ly  states  that  considerations  of  an  administrative 
nature  or  difficulties  of  a  technical  nature,  linked 
to  particular  methods  of  collection  tax  and  social 
security  contributions,  cannot  justify  derogation 
by  a  Member  State  from  the  rules  of  Community 
law (804). This case-law was also repeated under the 
framework of the free movement of services (805).

We  are  therefore  confronted  with  three  different, 
often contradictory, sets of interests.

According to this case-law, administrative simplifica-
tion as an interest of the social security institutions 

If  one  wants  to  take  these  three  interests  into 
account,  the  question  remains  whether  they  now 
all play the same role, or is one to be given priority? 

803(

)  See Case 341/05 Laval [2007] ECR 11767; Case C-438/05 Viking [2007] 

ECR I-10779.

804(

)  Case C-18/95 Terhoeve [1999] ECR 345, para. 45.

805(

)  Case 205/84 Commission v Germany [1986] ECR 3755.

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50 years of Social Security Coordination 

Past – Present – Future

cannot  be  invoked.  One  can  argue  that  the  inter-
ests of these institutions therefore clearly are of less 
importance than the interests of the workers or the 
employers.  But  is  it  possible  to  find  a  justification 
with respect to the employer in case of an obstacle 
to the free movement of workers?

As the worker is at the heart of the regulation, might 
his interests not always be predominant?

But are the interests of the worker today also pro-
tected  by  these  regulations  and  what  is  meant 
by  these  interests? This  brings  us  back  to  the  fun-
damental  principles  behind  the  regulations:  the 
neutral  character  of  the  applicable  legislation;  the 
compulsory character; and the principle of the sin-
gle  applicable  legislation,  also  translated  into  the 
concepts of exclusive and strong effect.

3. 

The fundamental principles behind the 
conflict rules

(a) 

The neutral character

We  have  already  pointed  out  that  conflict  rules 
are generally set up in the interest of the migrant 
workers  to  ensure  that  they  are  protected. ‘In  the 
interest  of  the  migrant  worker’  should,  however, 
narrowly  be  understood  as  implying  that,  due  to 
the  different  national  criteria  used  for  insurance, 
migrant  workers  should  not  have  to  either  fall 
between two stools, nor have to pay twice for pro-
tection. It does not mean that the migrant worker 
has a right to the highest benefits. What is impor-
tant  is  that  administrative  complications  should 
be  avoided,  rather  than  that  the  highest  benefits 
or  perhaps  the  lowest  contributions  should  be 
paid (806). Article 17 of Regulation (EEC) No 1408/71  
(Article 16 of Regulation (EC) No 883/2004), which 
allows  the  competent  authorities  of  the  Member 
States  to  provide  for  exceptions  to  the  conflict 
rules  in  the  interest  of  certain  categories  of  per-
sons or of certain persons, confirms this reasoning. 

(

806

)  Case  C-60/85  Luijten  [1986]  ECR  2365;  Case  C-202/97  Fitzwilliam 

[2000] ECR 883; Case C-404/98 Plum [2000] ECR 9379.

The ‘interest’ rather relates to the determination of 
the  applicable  legislation  than  to  the  application 
of the legislation itself, i.e. the amount of benefits, 
the  concrete  rights  and  obligations,  the  eventual 
application that a particular legislation would bring 
about  (807). The  appointed  legislation  on  the  basis 
of Article 17 replaces the traditional conflict rules. 
As such, just as the fundamental objectives behind 
the  conflict  rules  have,  Article  17  has  as  its  basic 
intention  the  avoidance  of  administrative  compli-
cations. Also the recent CJ Bosmann case (808) shows 
that,  if  someone  wants  to  obtain  a  higher  benefit 
or even a benefit, he depends on the national legis-
lation of the Member State concerned. The conflict 
rules of Regulation (EEC) No 1408/71 therefore do 
not pay particular attention to the contents of the 
applicable law and the best possible protection for 
the employee.

It  might  therefore  be  perfectly  possible  that  the 
employed  or  self-employed  person  would  obtain 
higher social security benefits in case another leg-
islation were applied. But the coordination regula-
tions  do  not  pay  attention  to  this  kind  of  interest 
of  the  employee.  If  administrative  complications 
are  avoided  by  appointing  a  particular  legislation 
A, even in cases where application of another leg-
islation B would be more beneficial for the worker, 
preference  seems,  according  to  this  reasoning,  to 
be given to legislation A.

The application of a principle of favouritism, known 
under  the  rules  of  international  private  law  and 
labour  law,  is  missing  in  the  field  of  social  security. 
The posting Directive 96/71/EC states that the appli-
cation of the legislation of the country of temporary 
employment shall not prevent application of terms 
and  conditions  of  employment  which  are  more 
favourable  to  workers (809).  The  same  principle  can 
also be found back in the Rome Convention and the 

(

(

(

807

)  Y.  Jorens, Wegwijs  in  het  Europees  sociale  zekerheidsrecht,  Brugge, 
Die  Keure,  1992,  78;  see  also  the  point  of  view  of  the  European 
Commission in Case C-101/83 Brusse [1984] ECR 2223.

808

)  Case C-352/06 Bosmann [2008] ECR I-3827.

809

)  Article 3(7) of posting Directive 96/71/EC.

180

Yves Jorens

Rome  I  Regulation (810)  in  the  field  of  international 
private law. Through this principle of favouritism the 
contents of the law are of importance and the best 
system with the biggest protection has priority.

This is certainly not the case under social security law.

But is this priority for avoiding administrative compli-
cations always in conformity with the principle of free 
movement of workers? Is the fact that an employee 
is not guaranteed the highest possible benefits as a 
result  of  a  choice  of  conflict  rules  made  under  the 
regulation an impediment to free movement?

Or is the Community legislator perhaps immune to 
such arguments, as it is in his own power to decide 
which rules are in conformity with the EU Treaty? It 
is true that the CJ pointed out that the Council has 
a wide discretion regarding the choice of the most 
appropriate  measures  for  obtaining  the  objective 
of  Article  51  of  the Treaty  (now  42)  and  therefore 
had the liberty to depart in some respects at least 
from  the  mechanisms  currently  provided  for  in 
Regulation (EEC) No 1408/71 (811). This wide discre-
tion should guarantee that the actual conflict rules 
are consistent with the principle of proportionality, 
and therefore judicial review of the exercise of such 
power must be limited to examining whether such 
exercise is vitiated by a manifest error or misuse of 
powers,  or  whether  the  institution  concerned  has 
manifestly exceeded the limits of its discretion (812).

But taking into account the fundamental objectives 
of the coordination regulations to achieve the free 
movement  of  persons,  is  it  in  conformity  with  the 
principle  of  proportionality  that  more  and  higher 
benefits are sacrificed on the altar of less adminis-
trative complications? It is doubtful.

But  even  if  one  only  looks  at  the  argument  of 
lesser  administrative  complications,  do  the  actual 

conflict rules pass this test? Let us take the exam-
ple  of  frequently  mobile  workers  who  have  to 
change legislation every time they take up a new 
job.  By  not  ensuring  continuity  in  the  applicable 
legislation,  this  would  lead  to  a  further  impedi-
ment (813).  We  cannot  ignore  the  fact  that  such  a 
situation would increase administrative complica-
tions, which would be against the objectives of the 
conflict rules. In particular, if the European legisla-
tor  deliberately  chose  a  different  conflict  rule  for 
another  category  of  people,  might  it  then  not  be 
argued by this group of frequently mobile workers 
that a similar application of that conflict rule would 
generally lead to less administrative impediments 
and  would  therefore  be  more  in  conformity  with 
the free movement of persons?

But might it also be possible to go one step further, 
looking at the abovementioned case-law of the CJ, 
where  the  CJ  clearly  states  that  conformity  with 
the  free  movement  of  persons  has  to  be  looked 
at, not in an abstract way, but rather from the par-
ticular  situation  of  the  worker?  Could  this  lead  to 
a  more  personal  investigation  of  the  adequacy  of 
the conflict rule? The lex loci laboris has been cho-
sen because it clearly fits into the perspective of the 
market integration function, allowing the worker to 
be connected to the country he is most attached to. 
It might be perfectly possible that, in a more con-
crete situation, the worker argues and proves that 
he  is  more  attached  to  another  country.  Could  it 
not be argued that in such situations an alternative 
connecting factor or conflict rule should be used as 
it better serves the worker’s interests?

(b)  The compulsory character of the conflict rules

Contrary  to  the  rules  on  labour  law  and  interna-
tional  private  law,  social  security  regulations  do 
not foresee the possibility of free choice for deter-
mining  which  social  security  legislation  would 

(

(

(

810

)  Article  6  of  the  Rome  Convention  and  Article  8  of  the  Rome  I 

Regulation. 

811

)  Case C-443/93 Vougioukas [1995] ECR 4033, para. 35.

812

)  Case C-242/99 Vogler [2000] ECR 9083.

813(

)  See Y.  Jorens  (ed.),  J-P.  Lhernould  (ed.),  J-C.  Fillon,  S.  Roberts  and  B. 
Spiegel,  Think  Tank  Report  2008  —  Towards  a  new  framework  for 
applicable legislation. New forms of mobility, coordination principles 
and  rules  of  conflict  —  Training  and  reporting  on  European  social 
security, Project DG EMPL/E/3 — VC/2007/0188, Brussels, 2008, 23.

181

50 years of Social Security Coordination 

Past – Present – Future

apply (814). Social security belongs to the public field 
and is of public order and therefore parties may not 
deviate from these general principles. This cannot, 
however,  exclude  the  fact  that,  at  least  indirectly, 
parties  can  influence  the  choice  of  the  applicable 
legislation through the factual situations of a case, 
such as the place of residence, the location of the 
employer, the workplace, etc. (815).

The  rules  of  conflict  therefore  have  a  compulsory 
character. This is also in line with the national social 
security schemes, according to which the principle 
of  solidarity  requires  that  the  person  concerned 
has to be subject to the applicable legislation. It fol-
lows from the provisions of the regulation that the 
application of national legislation is determined by 
reference to criteria drawn from the rules of Com-
munity law. Although it is for the legislature of each 
Member State to lay down the conditions creating 
the right or the obligation to become affiliated to 
a  social  security  scheme  or  to  a  particular  branch 
under such a scheme, it must be emphasised that 
this  does  not  mean  that  the  Member  States  are 
entitled  to  determine  the  extent  to  which  their 
own legislation or that of another Member State is 
applicable (816). The application of the provisions of 
the regulations therefore depend on the objective 
conditions and circumstances in which the migrant 
worker concerned is situated and the last one has 

814(

)  One  exception  is  the  free  choice  foreseen  for  diplomatic  missions 
and consulars in Article 16 of Regulation (EEC) No 1408/71. This right 
of  option  was  further  kept  for  the  auxiliary  staff  of  the  European 
Communities  in  Regulation  (EC)  No  883/2004  (Article  15).  See  also 
Case C-60/93 Aldewereld [1994] ECR 2991, concerning the situation 
of a person who resides in the Member State and, in the employment 
of  an  undertaking  established  in  another  Member  State,  works 
exclusively  outside  the  European  Union.  The  option  to  leave  the 
choice to the person concerned to decide under which legislation he 
or she would fall, taking into account that no particular conflict rule 
was foreseen for this situation under the regulation, was rejected by 
the CJ as an option was only explicitly foreseen for diplomatic missions 
and the person concerned was not in a situation comparable to that

815(

)  Under the actual Regulation (EEC) No 1408/71 it is well-known that 
this choice through indirect factual elements does happen in practice, 
in  particular  in  the  situation  where  activities  are  performed  in  two 
Member States, one of them being the place of residence. By starting 
to work at home, even for a rather short period a week, people might 
become subject to the legislation of the state of residence, instead of 
the state of employment. Under the new Regulation (EC) No 883/2004, 
this ‘intentionally arranging’ to fall under the legislation of the place 
of residence would become less probable as it is now requested that 
substantial activities be performed in the state of residence.

816(

)  Case  C-276/81  Kuijpers  [1982]  ECR  3027,  para.  14;  Case  C-110/79 

Coonan v Insurance Officer [1980] ECR 1445.

no option (817). The provisions of Title II constitute a 
complete set of conflict rules, the effect of which is 
to divest the legislator of each Member State of the 
power to determine the ambit and the conditions 
for  the  application  of  its  national  legislation.  The 
Member States are therefore not entitled to deter-
mine  the  extent  to  which  their  own  legislation  or 
that  of  another  Member  State  is  applicable,  since 
they are obliged to comply with the provisions of 
the  Community  law  in  force (818). The  conflict  rules 
are  compulsorily  applicable  and  it  is  only  when 
choice has explicitly been foreseen that an option 
can be used (819). In the Miethe case on unemploy-
ment benefits, the CJ clearly determines that Arti-
cle 71(1)(a)(ii) of Regulation (EEC) No 1408/71 must 
be  interpreted  as  meaning  that  a  wholly  unem-
ployed frontier worker who comes within the scope 
of that provision may claim benefits only from the 
Member State in which he resides even though he 
fulfils  the  conditions  for  entitlement  to  benefits 
laid down by the legislation of the Member State in 
which he was last employed.

The  applicable  legislation  is  therefore  derived 
objectively  from  the  conflict  rules  of  the  regula-
tion,  taking  into  account  the  factors  connecting 
the  particular  situation  with  the  legislation  of  the 
Member State.

Traditionally, free choice is considered to be exclud-
ed as it is often believed that the employee, as the 
weaker  party,  would  not  be  in  a  position  to  resist 
the  pressure  from  the  employer  who  would  pre-
sumably have a preference for the country with the 
lowest contributions. But is this correct? Also today, 
the conflict rules are only concerned with avoiding 
administrative  complications  and  do  not  exclude 
the  possibility  that  perhaps  the  country  with  the 
lowest  contributions,  which  —  although  they  are 
not immediately interrelated — would also lead to 
the lowest benefits for the worker concerned, would 
be chosen.

(

(

(

817

)  See, for example, also Case C-12/67 Guissart [1967] ECR 536.

818

)  Case C-302/84 Ten Holder [1986] ECR 1821, para. 21.

819

)  See, for example, also Case C-1/85 Miethe [1986] ECR 1837, para. 12, 

182

Yves Jorens

The  option  of  free  choice  is  known  as  a  funda-
mental  principle  for  the  determination  of  the 
applicable labour law in the field of international 
private  law (820).  However,  also  here  this  funda-
mental principle of free choice is to a large extent 
undermined by measures that should protect the 
employee. In the first place, the fact that parties 
have  chosen  a  particular  law  would  not,  where 
all other elements relevant to the situation at the 
time of the choice are connected with one coun-
try only, prejudice the application of the rules of 
the  law  of  this  country.  Secondly,  the  choice  of 
the  law  made  by  the  parties  cannot  deprive  the 
employee of the protection offered to him or her 
by  the  mandatory  rules  of  the  law,  which  would 
be  applicable  in  the  absence  of  choice,  on  the 
basis of objective criteria (821). The application of a 
principle of protection and a principle of favour-
itism for the employee therefore implies that the 
general principle of free choice is very limited. In 
case free choice were given in the field of social 
security  law,  one  could,  for  example,  imagine 
establishing a conflict rule as a guarantee accord-
ing  to  which ‘free’  choice  could  not  deprive  the 
application  of  the  social  security  protection  of 
the  country  to  which  the  employee  concerned 
is  most  attached.  On  the  other  hand,  this  would 
not solve the problem as the next task would be 
to  decide  the  country  to  which  the  employee  is 
most  attached.  Would  that  be  the  country  with 
the highest benefits? Or in the case of, for exam-
ple, a worker, who works in Member State A for an 
employer based in Member State B, where s/he is 
also  living,  it  could  be  argued  that  it  is  perhaps 
country B to which s/he is most attached (822).

In  general,  however,  allowing  a  free  choice  in  the 
field  of  social  security  is  not  recommendable,  not 

(

(

(

820

)  Article  3  of  the  Rome  Convention  and  Article  3  of  the  Rome  I 

Regulation

821

)  See Article 6 of the Rome Convention, as well as Article 8 of Regulation 

(EC) No 593/2008, the Rome I Regulation.

822

)  See Y.  Jorens  (ed.),  J-P.  Lhernould  (ed.),  J-C.  Fillon,  S.  Roberts  and  B. 
Spiegel,  Think  Tank  Report  2008  —  Towards  a  new  framework  for 
applicable legislation. New forms of mobility, coordination principles 
and  rules  of  conflict  —  Training  and  reporting  on  European  social 
security, Project DG EMPL/E/3 — VC/2007/0188, Brussels, 2008, 25.

only because of the high risk of the employer choos-
ing the country with the lowest contributions, but 
also  because  it  would  contradict  the  compulsory, 
objective  application  of  social  security  legislation 
and  could  as  such  also  undermine  the  general 
financial solidarity of a social security system, lead-
ing to abuse.

One  way  or  another,  the  application  of  an  Arti-
cle  17  agreement  (Article  16  of  Regulation  (EC) 
No  883/2004)  could  be  seen  as  a  greater  or  lesser 
possibility  of  choosing  between  certain  systems, 
although  the  choice  here  is  more  offered  to  the 
administrations.

(c) 

The principle of exclusivity and the strong 
effect of the conflict rules

The  other  side  of  the  single  applicable  legislation 
is the exclusive effect of the conflict rules. The fun-
damental question is to know whether the conflict 
rules are in a position to exclude, in every situation, 
the  application  of  another  legislation  than  that 
designated  by  the  regulation  provisions  without 
being in conflict with, and contrary to, Articles 39 
and  42  of  the Treaty. This  debate  is  not  new.  And 
it seems that the CJ ‘commutes’ between different 
points of view.

Whereas in the beginning the CJ decided that the 
regulations did not prohibit the application of the 
legislation  of  the  Member  State  other  than  the 
one designated by the conflict rules, except to the 
extent  that  it  requires  the  worker  to  contribute 
in  the  financing  of  the  social  security  institution, 
which  is  unable  to  provide  him  with  additional 
advantages (823),  in  later  cases  the  CJ  declared  that 
‘The provisions of Title II constitute a complete sys-
tem of conflict rules the effect of which is to divest 
the legislature of each Member State of the power 
to determine the ambit and the conditions for the 
application  of  its  national  legislation  so  far  as  the 
persons  who  are  subject  thereto  and  the  territory 

823(

)  Case C-92/63 Nonnenmacher [1964] ECR 585.

183

50 years of Social Security Coordination 

Past – Present – Future

within  which  the  provisions  of  national  law  take 
effect are concerned’; the Member States are (not) 
entitled to determine the extent to which their own 
legislation or that of another Member State is appli-
cable since they are ‘under an obligation to comply 
with the provisions of Community law in force’ (824). 
It is important to see that the CJ continues in this 
case by declaring that ‘That rule is not at variance 
with the Court’s decisions (see, in particular, the Pet-
roni judgment) to the effect that the application of 
Regulation 1408/71 cannot entail the loss of rights 
acquired  exclusively  under  national  legislation. 
That principle applies not to the rules for determin-
ing  the  legislation  applicable,  but  to  the  rules  of 
Community law on the overlapping of benefits pro-
vided  for  by  different  national  legislative  systems. 
It  cannot  therefore  have  the  effect,  contrary  to  
Article  13(1)  of  Regulation  1408/71,  of  causing  a 
person  to  be  insured  over  the  same  period  under 
the  legislation  of  more  than  one  Member  State, 
regardless  of  the  obligations  to  contribute  or  of 
any other costs which may result therefrom for that 
person’ (825).  The  simultaneous  application  of  two 
national  legislations  would  therefore  not  be  pos-
sible.  Also  the  Commission  had  declared  in  that 
case  that  the  principle  of  inviolability  of  national 
acquired  rights  (the  famous ‘Petroni  principle’) (826) 
can only apply to the substantive rules of the coor-
dination regime and not to the conflict rules.

This  seems  to  include  that  a  worker  could,  as  a 
result  of  the  conflict  rules,  lose  a  higher  level  of 
benefits  provided  in  another  Member  State.  As 
such this is not really surprising as we have noticed 
that for the CJ the interest of the worker is deter-
mined  by  avoiding  and  limiting  administrative 
complications, rather than by guaranteeing a high 
level of benefits.

The simultaneous application of, on the one hand, 
the national social security system on its own and 

824(

)  Case C-302/84 Ten Holder [1986] ECR 1821, para. 21.

825(

)  Case C-302/84 Ten Holder [1986] ECR 1821, para. 22.

the national social security system in combination 
with  European  social  security  law  was  not  possi-
ble  in  that  respect.  On  the  other  hand,  in  particu-
lar  with  respect  to  family  benefits,  the  CJ  already 
declared that the aim of Article 51 (42) would not be 
achieved if workers were to lose their social security 
advantages, guaranteed to them by the legislation 
of a single Member State, as the regulations allow 
different schemes to exist, creating different claims 
on different institutions against which the claimant 
possesses direct rights by virtue either of national 
law alone, or of national law supplemented, where 
necessary  by  Community  law,  in  particular  to  the 
lifting of conditions of residents (827).

This discussion has gained a new momentum with, 
as mentioned before, the Bosmann case. Although 
the  CJ  firstly  confirms  the  exclusivity  character 
(under  Article  13(2)(a)  of  Regulation  (EEC)  No 
1408/71, a person employed in the territory of one 
Member State is to be subject to the legislation of 
that state even if he resides in the territory of anoth-
er  Member  State;  the  effect  of  determining  that  a 
given  Member  State’s  legislation  is  the  legislation 
applicable  to  a  worker  pursuant  to  that  provision 
is  that  only  the  legislation  of  that  Member  State 
is  applicable  to  him),  it  goes  further  to  determine 
that application of this article does not preclude a 
migrant  worker,  who  is  subject  to  the  social  secu-
rity  scheme  of  the  Member  State  of  employment, 
from receiving, pursuant to the national legislation 
of  the  Member  State  of  residence,  child  benefit  in 
the latter state.

It could be said that the Bosmann case only extends 
this  well-known  principle  of  a  cumulative  applica-
tion under family benefits, taking into account that 
the  particularity  here  is  that  the  competent  state, 
contrary  to  the  case-law  on  accumulation  of  ben-
efits,  did  not  provide  for  any  family  benefit.  The 
fundamental question is whether the national leg-
islator  might  refuse  the  application  of  its  national 
law or that he is obliged to apply it. It seems difficult 

826(

)  Case C-24/75 Petroni [1975] ECR 1149, paras 21–22. The regulation may 
not lead to the result that national acquired rights would be reduced. 

(

827

)  Case C-807/79 Gravina [1980] ECR 2205, paras 6–7, confirmed in many 

other cases.

184

Yves Jorens

introduce 

to imagine that he may refuse it. The only argument 
which one could use is that it would be contrary to 
the  regulation  that  the  national  law  also  applies. 
German  authorities  may 
into  their 
domestic  law  a  provision  stating  that ‘family  ben-
efits are granted to all persons resident on the Ger-
man  territory,  with  the  exclusion  of  persons  who 
are  subject  to  another  EU  legislation  according  to 
[the]  coordination  rules  of  [the]  Regulation’.  How-
ever, such a provision would probably be seen as a 
typical indirect discrimination based on nationality. 
The option created by the CJ would therefore turn 
into an obligation (828).

Can Bosmann be limited to situations where, if no 
family benefits are to be paid under the law of the 
competent  state,  migrant  workers  can  now  hope 
to  get  these  benefits  from  the  non-competent 
state? The statement of the CJ — ‘the provisions of 
Regulation No 1408/71 must be interpreted in the 
light of Article 42 EC Treaty which aims to facilitate 
freedom  of  movement  for  workers  and  entails,  in 
particular, that migrant workers must not lose their 
right to social security benefits or have the amount 
of those benefits reduced because they have exer-
cised the right to freedom of movement conferred 
on  them  by  the  EC  Treaty’  (para.  29)  —  does  not 
seem to limit the reasoning of the CJ to family ben-
efits (829). The broad reasoning of the CJ justifies, in 
our opinion, the notion that the application of the 
country  of  residence  is  not  only  limited  to  family 
benefits, but can also be extended to all other ben-
efits. The  person  working  in  a  Member  State  and 
residing  in  another  might  therefore  also  be  enti-
tled,  for  example,  to  healthcare  coverage  in  their 
place  of  residence  as  the  legislation  of  the  work-
place does not provide healthcare insurance.

The  CJ  seems  to  apply  here  the  Petroni  princi-
ple  to  the  conflict  rules.  The  framework  of  the 

(

828

)  See Y.  Jorens  (ed.),  J-P.  Lhernould  (ed.),  J-C.  Fillon,  S.  Roberts  and  B. 
Spiegel,  Think  Tank  Report  2008  —  Towards  a  new  framework  for 
applicable legislation. New forms of mobility, coordination principles 
and  rules  of  conflict  —  Training  and  reporting  on  European  social 
security, Project DG EMPL/E/3 — VC/2007/0188, Brussels, 2008, 26.

coordination  regulations  is  the  free  movement  of 
workers  and  any  impediment  to  that  principle  is 
forbidden. The application of the regulation, lead-
ing  to  a  situation  where  the  person  concerned 
would be deprived of rights and benefits foreseen 
under  national  law  —  national  legislation  which 
would apply to the person concerned if he had not 
relied on the principles of the regulation — would 
be in contradiction of this fundamental objective. 
National  entitlements  must  therefore  always  be 
taken  into  account.  The  principle  that  someone 
cannot  be  deprived  of  national  acquired  rights 
obliges the Member State that is not appointed by 
these  conflict  rules,  but  to  which  the  person  con-
cerned is subject, to pay him or her the rights and 
benefits to which he or she is entitled. A compari-
son  between  the  benefits  obtained  on  the  basis 
of  the  legislation  appointed  by  the  conflict  rules 
and the benefits based on national law should be 
undertaken, eventually leading to the obligation to 
pay a differential amount by the (non-competent) 
state. This certainly does not imply that the conflict 
rules will thereby become meaningless.

This idea is in line with the general case-law of the 
CJ in the framework of the free movement of work-
ers and services. Also in healthcare, the CJ already 
mentions  in  the  Vanbraekel  case  that  the  tariffs  of 
reimbursement  to  be  paid  as  a  result  of  the  free 
movement of services may not lead to lower tariffs 
than those based on national law (830).

The  consequences  of  cases  like  Bosmann  and 
Nemec  point  out  that  the  level  of  benefits  may 
have  to  be  taken  into  account  and  strengthen  as 
such  the  interest  of  the  workers.  A  principle  of 
favouritism,  as  known  under  international  labour 
law,  could  as  such  also  have  found  its  way  into 
social  security  law.  This  applies  to  all  branches 
of  social  security.  It  might  shed  new  light  on  the 
actual philosophy of the conflict rules and encour-
age  one  to  look  at  them  again  directly  from  the 
perspective of the EU Treaty. 

(

829

)  Case C-205/05 Nemec [2006] ECR 10745.

(

830

)  Case C-368/98 Vanbraekel [2001] ECR I-5363. 

185

50 years of Social Security Coordination 

Past – Present – Future

Iv.  ConCluSIonS

Fifty years after the first EU coordination regula-
tions  appeared,  new  developments  in  migration 
patterns, as well as the growing direct reliance on, 
and  applicability  of,  the  fundamental  principles 
of EU law, have led to a situation where a new set 
of  conflict  rules  could  be  envisaged. These  rules 
should  not  just  be  cosmetic  and  should  look  at 

the  fundamental  principles  behind  these  rules, 
such as the principle of neutrality, the compulso-
ry character and the one single legislation appli-
cable. Some of these principles could be adapted 
in  the  interest  of  the  worker  and  should  be  in 
conformity  with  the  free  movement  of  workers. 
The  right  momentum  now  exists  to  assess  the 
actual conflict rules against a test of the balance 
of interests.

186

COORdiNATiON  OF NEw BENEFiTS

Bernhard Spiegel

Bernhard Spiegel
Austrian Federal Ministry of Social Affairs  
and Consumer Protection 

Head of Division in the Austrian Federal Ministry for Social Affairs and Consumer 
Protection

•	
•	
•	
•	
•	

•	

•	

•	

•	
•	
•	

Born on 18 April 1959
Study of Law at Vienna University
Since 1982 civil servant in the Social Ministry
Since 1997 Head of Division
Responsible for Reg. 1408/71 since the beginning of the Austrian EU-Mem-
bership;  negotiator  for  the  accession  of  Austria,  member  of  the  Adminis-
trative Commission and Advisory Committee for migrant workers, Austrian 
representative in the Council Social Questions Group when social security 
for migrant workers is involved, experience with other Member States due 
to various PHARE/TAIEX-projects and bilateral negotiations 
Responsible for bilateral agreements concluded by Austria with other States 
or International Organisations in the field of social security
Responsible for ECJ cases in the field of social security and the EC-conform-
ity of the national legislation
Chair of the Task Force (working under the supervision of the Administra-
tive Commission to prepare the electronic data exchange between Mem-
ber States in applying Reg. 883/2004)
Chair of the SPC Group on SSGI (Social Services of General Interest)
Member of trESS (Think Tank and Visiting Trainer)
Speaker at international conferences related to social security, lectures on 
EC-rules in the field of social security for Austrian employers, writer of arti-
cles on international social security issues (*)

I. 

InTroduCTIon

a.  What is a ‘new benefit’?

The advent of new social security benefits is always 
a challenge for all players at the European level (831). 

*( ) 

831(
) 

This contribution was translated from the original German version.

In what follows, I will deal with the ramifications of the advent of new 
benefits  in  the  context  of  coordinating  social  security  systems. This 
phenomenon can also have consequences, of course, in other areas 
of European social law, such as on the directives on equal treatment 
for men and women; it is easy to see how these directives lag behind 
—  compared  with  the  development  of  social  law  in  the  Member 
States  —  through  CJ  ruling  C-77/95  Züchner  [1996]  ECR  I-5689, 
where  the  CJ  felt  obliged  to  declare  Council  Directive  79/7/EEC  on 
the progressive implementation of the principle of equal treatment 
for men and women in matters of social security (OJ L 6, 10.1.1979, p. 
24) inapplicable to people who devote themselves to the upbringing 
of their children or to caring for a sick family member, while national 
legal provisions have brought the situation of these particular groups 
of people increasingly into line with that of the gainfully employed.

First of all, it is clear that Europe has no ability to 
influence the emergence of new benefits (832). The 
Member  States  develop  their  national  legal  situ-
ations  independently  in  order  to  take  account  of 
the social, economic and political challenges that 
they  face.  The  largely  comparable  basic  condi-
tions in the different Member States (such as their 
demographic  situations)  do  mean  that  there  are 
parallel  developments  in  many  Member  States 
that  lead  to  the  advent  of  new  benefits  more  or 

(

832

)  The  shaping  of  national  social  policy,  and  with  it  decisions  on  how 
national  social  security  systems  are  to  be  developed,  remains  a 
competence  of  the  Member  States  (C-158/96  Kohll  [1998]  ECR 
I-1931).

187

50 years of Social Security Coordination 

Past – Present – Future

less  simultaneously (833).  From  the  European  point 
of  view,  new  benefits  are  above  all  of  interest  if 
they  occur  in  multiple  Member  States,  as  a  judg-
ment by the Court of Justice (CJ) applying to one 
of  those  Member  States  will  then  automatically 
have  consequences  for  the  other  Member  States 
in question.

The aim now is to investigate the coordination of 
such new benefits more closely. Of course, it is not 
possible to comprehensively describe all the new 
categories  of  benefits (834).  I  will  therefore  single 
out  a  few  benefits  that  I  see  as  particularly  eluci-
dating examples.

The actors at European level are in a constant race 
when  new  benefits  occur.  Will  legislators  manage 
to  act  first?  Due  to  the  complex  decision-making 
process, the Commission must first produce a pro-
posal, which the Council and Parliament then enact 
together (835). Or will the CJ get there first? The CJ very 
often wins the race, as legislators are simply unable 
to adopt the necessary legislation unanimously. In 
such cases, criticism of the CJ can be relied upon. In 
what follows, I would therefore like to go into this 

(

(

833

)  Only  time  will  tell  whether  the  political  cooperation  amongst  the 
Member  States  put  in  place  at  the  political  level  since  2000  (the 
‘Lisbon  process’)  through  the  ‘open  method  of  coordination’  also 
assists,  or  will  in  future  assist,  parallel  development  of  the  reform 
processes in the Member States.

834

)  We must be aware, however, that there are also differences of opinion 
on the issue of what actually constitute ‘new benefits’. K. Alaviukhola 
(‘Coordination  of  “new”  benefits’,  in  Coordinating  work-based  and 
residence-based social security, published by R. Langer and M. Sakslin, 
Helsinki, Publications of the Faculty of Law, University of Helsinki, 2004, 
p. 173) focuses on new family benefits. On the subject of change in 
European social security systems, but in particular on the privatisation 
of risks and the consequences that may have on coordination under 
Regulation (EEC) No 1408/71, see ‘Meeting the challenge of change’, 
published by the Dutch Sociale Verzekeringsbank (SVB) as a summary 
of  the  contributions  at  the  conference  of  30  and  31  October  1997 
at  Noordwijk  aan  Zee.  G.  Igl  identifies,  above  all,  family  benefits 
and  care  benefits  as  one  of  the  most  problematic  new  forms  of 
benefit  in ‘Coordination  and  new  forms  of  social  protection’  in  25 
years of Regulation (EEC) No 1408/71 on social security for migrant 
workers, published by the Swedish National Social Insurance Board, 
Stockholm, 1997. The paper, however, relates to the situation before 
the  clarifications  by  the  CJ  in  Cases  C-160/96  Molenaar  [1998]  ECR 
I-843, in relation to care benefits, and Cases C-245/94 and C-312/94 
Hoever  and  Zachow  [1996]  ECR  I-4895;  in  these  decisions,  the  CJ 
found  that  child-raising  benefits  were  clearly  family  benefits  within 
the meaning of Regulation (EEC) No 1408/71. A good overview of the 
problems arising from the advent of new benefit systems can also be 
gained from the European Report 2008 by the Tress network (http://
www.tress-network.org).

(

835

)  For legal instruments relating to the social security of migrant workers, 
the Council must unanimously agree with the European Parliament in 
the co-decision procedure (Article 42 of the EC Treaty).

race a little bit more and to look into whether the 
criticism  of  the  CJ’s  various  judgments (836)  is  really 
justified if you analyse the role of the two ‘competi-
tors’ in greater detail.

b.  Legal framework

The coordination of social security systems is cur-
rently  governed  by  Regulation  (EEC)  No  1408/71. 
This  regulation  is  due  to  be  superseded  in  early 
2010 (837)  by  Regulation  (EC)  No  883/2004  which, 
although in principle it deals with the same funda-
mentals, does include a number of innovations. We 
will therefore cover both instruments and I will be 
referring to them below as the ‘coordinating regu-
lations’. It is also important to say, from the outset, 
that  both  instruments  only  cover  statutory  social 
security  systems (838).  For  that  reason  it  is  there-
fore natural that it is predominantly new statutory 
social  security  benefits  that  interest  us,  although 
we cannot completely ignore areas beyond statu-
tory social security.

First  of  all,  there  are  constant  issues  relating  to 
delineating  social  assistance (839)  as  the  boundary 
between social security and social assistance is flu-
id in nearly every Member State. The CJ, of course, 
clarified this issue long ago by deciding that all ben-
efits that do not relate to the evaluation of an indi-
vidual case and give rise to a legal entitlement are 
to be regarded as social security (840). However, the 
national  systems  of  the  Member  States  often  use 
different  differentiation  criteria  and,  furthermore, 
the  Rubicon  between  social  security  benefits  and 

(

(

(

(

(

836

)  The  CJ’s  judgments  are,  naturally  enough,  always  a  favourite  topic 
of  study  and  teaching.  Some  judgments  have  been  particularly 
heavily  criticised,  however.  One  good  example  is  the  judgment  in 
Cases C-245/94 and C-312/94 Hoever and Zachow [1996] ECR I-4895, 
which was criticised, amongst others, by E. Eichenhofer in ‘Deutsches 
Erziehungsgeld  und  Europäisches  Sozialrecht’ 
[German  child-
rearing allowances and European social law] in Sozialgerichtsbarkeit 
[periodical] 10/97, p. 449 et seq. 

837

)  Currently scheduled to occur on 1 March 2010.

838

)  Article 1(j) pension fund of Regulation (EEC) No 1408/71 and Article 

1(I) of Regulation (EC) No 883/2004.

839

)  Social  assistance  is  excluded  from  the  functional  scope  of  the  two 
instruments in Article 4(4) of Regulation (EEC) No 1408/71 and Article 
3(5) of Regulation (EC) No 883/2004.

840

)  See, for example, C-24/74 Biason [1974] ECR 999.

188

Bernhard Spiegel

social assistance is often crossed, without the Mem-
ber States in question even realising it, when social 
law schemes are being redesigned. Where Member 
States are unable to get these benefits recognised 
as ‘special non-contributory cash benefits’ as quick-
ly as possible, something that can only be achieved 
with the unanimous agreement of the Commission 
and  all  the  other  Member  States (841),  there  is  then 
automatically the threat of an obligation to export 
the said benefit to the other Member States.

That  is  probably  the  greatest  risk  of  all  the  conse-
quences  of  the  coordinating  regulations  for  this 
category of benefits. 

groups of people under German law) (842). The same 
phenomenon  can  also  be  seen  in  the  pension 
schemes under the second or third pillar.

Below we will — as I said earlier — analyse some of 
the new benefits more closely. I would like to focus 
firstly on the care benefits, as these can be seen as a 
prime example of all the aspects and problems asso-
ciated  with  new  categories  of  benefits.  I  will  then 
go into detail about new systems in pension insur-
ance,  such  as  capital-funded  systems  and  pension 
account systems, and then finally I will take a look at 
a few more aspects of child-rearing benefits which 
can also be regarded as a new category of benefits. 

The  boundary  of  the  statutory  systems  with  the 
collective-agreement  or  private  law-based  wel-
fare systems, too, is a fluid one. The latter systems 
are  also  outside  the  scope  of  the  coordinating 
regulations.  In  such  cases,  too,  it  is  striking  that, 
depending on the particulars of each national legal 
situation, systems which are thoroughly compara-
ble  in  socio-political  terms  sometimes  fall  within 
the scope of these regulations and sometimes do 
not.  As  an  example,  we  can  look  at  the  insurance 
provided by health insurance bodies acting under 
private law. If this insurance is based on a statutory 
obligation,  and  if  legislators  have  also  imposed 
some  minimum  quality  standards  on  that  private 
insurance, such a system will in any case fall within 
the scope of the coordinating regulations (a good 
example of this is Switzerland’s mandatory health 
insurance).  Where,  however,  national  legislators 
just provide for certain people to be without insur-
ance  cover  and  allow  these  people  the  choice  of 
how  they  actually  intend  to  protect  themselves 
from  individual  social  security  risks,  insurance  of 
this  nature  will  not  be  covered  by  the  coordinat-
ing regulations even if the insurance is negotiated 
with  the  same  private  insurance  that  is  involved 
in  the  Swiss  mandatory  system  (one  example  of 
this  being  the  lack  of  insurance  cover  for  certain 

(

841

)  Annex IIa of Regulation (EEC) No 1408/71 and Annex X of Regulation 

(EC) No 883/2004.

II.  Care beneFITS

a.  Background

In the 1990s, a number of Member States began to 
introduce national care benefit systems which were 
predominantly  designed  to  meet  the  demands  of 
demographic  change. The  aim  of  these  systems  is 
to  assist  people  who  are  unable  to  live  according 
to their own means, who, in living their day-to-day 
lives, are constantly or at least repeatedly reliant on 
external assistance, with a state-based benefit sys-
tem. The people in question are usually elderly pop-
ulation groups, but sometimes younger people with 
relevant disabilities may also fall into these groups. 
It  is  worth  pointing  out,  to  begin  with,  that  what 
we  are  talking  about  here  is  often  not  completely 
new additions to national social policy but benefits 
whose roots lie in older systems to care for the disa-
bled (e.g. benefits for the blind), which nearly all the 
Member States have had for centuries (843).

842(

)  This means that one and the same insurance for a private insurance 
scheme  that  operates  across  Europe  can  be  both  covered  by 
Regulation  (EEC)  No  1408/71  (where  Switzerland  is  the  competent 
state) and not covered (where the competent state is Germany). 

843(

)  These legacy benefits are well documented in the case-law of the CJ 
on  the  delimitation  of  social  security  benefits  from  social  assistance 
benefits  outside  the  scope  of  Regulation  (EEC)  No  1408/71,  even 
before  the introduction of  Annex IIa into the said regulation in 1992 
(through Regulation (EEC) No 1247/92, OJ L 136, 19.5.1992, p. 1) — see, 
amongst  others,  the  judgments  on  Belgian  benefits  for  the  disabled 
such as C-187/73 Callemeyn [1974] ECR 553, or on French allowances 
for disabled adults such as C-63/76 Inzirillo [1976] ECR 2057.

189

50 years of Social Security Coordination 

Past – Present – Future

It is also interesting that it seems to be absolutely 
impossible for the experts to come up with a defini-
tion for this new category of benefits. Attempts to 
do so by the Council, in drawing up Regulation (EC) 
No  883/2004 (844),  as  well  as  at  the  Administrative 
Commission level (845) have so far not met with any 
success. Other European social policy players, how-
ever, have not been as inhibited when it comes to 
finding generally accepted definitions for care ben-
efits. The Social Protection Committee, for example, 
has used the following definition, which has  been 
accepted by all the Member States unchallenged.

objectives. They are planned to cover all residents, 
thereby  aiming  to  provide  the  widest  possible 
national  coverage  for  the  protection  of  the  entire 
population  against  this  new  risk  of  needing  long-
term care. Exporting such benefits to people in oth-
er Member States is counter to the system.

It  was  clear  that,  given  this  background,  CJ  judg-
ments  on  whether  these  systems  are  compatible 
with European law were to be expected. I would now 
like to trace the individual stages of this case-law.

Originally (2003):

‘Long-term care consists of assistance to persons who 
are  unable  to  live  autonomously  and  are  therefore 
dependent on the help of others in their everyday lives. 
Their needs for assistance can range from facilitating 
mobility, shopping, preparing meals and other house-
hold  tasks  to  washing  and  feeding  in  most  extreme 
cases. Providing such long-term care does not neces-
sarily require medical skills’,

and then:

‘A  cross-cutting  policy  issue  that  brings  together  a 
range  of  services  for  persons  who  are  dependent 
on  help  with  basic  activities  of  daily  living  over  an 
extended period of time’ (846).

All  these  new  benefit  systems  have  something  in 
common  from  the  perspective  of  socio-political 

(

844
) 

In the case of Regulation (EC) No 883/2004, first of all use is made of 
the term ‘long-term care benefits’ (Article 34), while, due to the failure 
of the delegations in the Council Working Group on Social Issues to 
agree when drawing up the regulation, the difficult task of definition 
was delegated to the Administrative Commission (see paragraph 2 of 
the said regulation).

845

(

)  The Administrative Commission, too, was unable to fulfil the remit 
of coming up with a definition, and its decision, which will lay down 
a  list  of  care  benefits  in  kind  and  care  benefits  in  cash,  will  only 
contain a yes/no list that makes reference to the existence of such 
benefits  without  actually  setting  out  which  specific  benefits  are 
affected precisely.

(

846

)  This definition has been taken from the OECD, but it has never given 
rise to any issues in the political discussions in the Social Protection 
Committee.  A  precise  analysis,  however,  shows  that  this  definition, 
too,  leaves  room  for  improvement.  One  issue  is  that  babies,  too, 
would  satisfy  this  definition,  although  benefits  to  all  babies  are,  of 
course, not care benefits in this sense.

190

b.  Chronology of CJ case-law

1. 

The Molenaar case

The first case dealt with German care insurance (847). 
Under the decisive German legislation — put sim-
ply — everyone with German health insurance also 
has German care insurance. The insurance is admin-
istered  by  care  insurance  funds  in  close  organisa-
tional  interconnection  with  the  German  health 
insurance funds. The benefits offered include a care 
allowance and a range of benefits in kind, and it is 
possible for these benefits to be combined.

The subject of the case was a French citizen who 
commuted across the border to work in Germany. 
As  he  worked  in  Germany,  he  had  to  contribute 
to the German care insurance scheme, but under 
the  German  system  he  would  be  unable  to  claim 
any benefits as a result of the fact that he lived in 
France (848).  Germany  did  not  deny  that  the  care 
insurance was a branch of social security covered 
by Regulation (EEC) No 1408/71 but did argue that 
the system provided solely benefits in kind (includ-
ing  the  care  allowance  as  a ‘surrogate  benefit  in 
kind’ (849)).  Under  Regulation  (EEC)  No  1408/71, 

(

(

(

847

)  C-160/96 Molenaar [1998] ECR I-843.

848

)  Under the German legislation being challenged, only people resident 
in  Germany  could  claim  benefits  under  the  German  care  insurance 
system (German Social Security Code (SGB), Vol. XI).

849

)  Germany  cited  the  CJ’s  judgment  in  Case  C-61/65 Vaassen-Göbbels 
[1966]  ECR  377,  in  which  the  CJ  found  that  benefits  that,  although 
paid  in  cash,  constituted  a  reimbursement  for  treatment  costs  paid 
out  in  cash  by  the  insured  party  were  to  be  regarded  as  sickness 
benefits in kind rather than in cash.

Bernhard Spiegel

benefits in kind are not to be exported, but are to 
be provided for the residents of the Member State 
in question (850).

Given this starting point, the CJ had to first decide 
which  rules  under  Regulation  (EEC)  No  1408/71 
applied  to  German  care  insurance.  Given  that 
Regulation (EEC) No 1408/71 does not itself cover 
‘care benefits’, the CJ had to look for the benefits 
to  which  this  new  risk  could  best  be  assigned. 
Primarily  due  to  its  function  in  supplementing 
statutory health insurance, but also as a result of 
its  organisational  interweaving  with  the  health 
insurance  funds,  the  CJ  categorised  care  insur-
ance with the risk of ‘sickness’. The next step was 
to decide whether care allowances were a benefit 
in kind or in cash. The CJ found it beyond doubt 
that a benefit can only be regarded as a surrogate 
benefit  in  kind  where  it  specifically  reimburses 
treatment  costs  paid  by  an  insured  party  in  an 
individual case. Where, as in the case of German 
care allowances, the person in question has com-
plete autonomy over how they intend to use such 
a  benefit  (e.g.  to  pay  for  professional  services, 
assistance by relatives or even to ‘save for worse 
times to come’), the CJ found that such payments 
constituted  benefits  in  cash.  Another  inevitable 
consequence  of  this  decision  was  that  sickness 
benefits  in  cash  could  be  exported  pursuant  to 
Regulation (EEC) No 1408/71 (851).

What this means is that, even with a place of resi-
dence in another Member State, a person (with up-
to-date coverage!)(852) in the German care insurance 
scheme can assert his/her claim to care allowances 

(

(

850

)  See, for example, the reference to sickness benefits in kind in Title III, 

Chapter 1, of Regulation (EC) No 1408/71.

851

)  Where the worker pursuant to Article 19 or the pensioner pursuant 
to  Article  28  of  Regulation  (EEC)  No  1408/71  resides  outside  the 
competent state.

852

(

)  Under  Regulation  (EC)  No  1408/71,  sickness  benefits  require  that 
insurance  be  current  in  the  Member  State  in  question.  In  other 
words,  a  person  who  was  originally  insured  in  Germany  but  who 
then moves to Poland, where he/she is then subject to Polish legal 
provisions  as  a  result  of  pursuing  a  new  occupation  pursuant  to 
Title  II  of  Regulation  (EC)  No  1408/71  no  longer  has  any  claim  to 
German sickness benefits (and thereby likewise no claim to German 
care allowances), even if care allowances were being drawn before 
moving to Poland.

from this German insurance system. This also spells 
out  clearly  that  care  benefits  in  kind,  such  as  the 
provision of professional help for day-to-day tasks 
(shopping,  personal  hygiene,  cleaning  the  house, 
etc.),  cannot  be  exported.  Instead,  such  benefits, 
like  all  other  sickness  benefits  in  kind,  may  also 
be  provided  for  those  insured  in  another  Mem-
ber  State  who  live  in  Germany,  at  the  expense  of 
the  competent  foreign  institution.  Therefore  any 
recipients, excluding those receiving Austrian pen-
sions, residing in Germany (853) are not only entitled 
to ‘ordinary’ benefits in kind under German health 
insurance (such as consultation with doctors, medi-
cines  and  hospital  care)  but  also  care  benefits  in 
kind.  The  competent  Austrian  health  insurance 
fund  must  then  reimburse  the  German  fund(s)  for 
all these benefits. This is certainly not a revolution-
ary  idea,  however,  but  rather  the  entirely  logical 
consequence  of  viewing  care  benefits  as  benefits 
within the field of health insurance. We will have to 
go into this in more detail below.

2.   The Jauch case

The next case related to Austria (854). As in Germany, 
the national provision of this new system in Aus-
tria  was  also  very  likely  to  involve  European  law. 
Unlike Germany, though, Austria did not plan to go 
down the route of benefits in kind but rather that 
of special non-contributory benefits. Annex IIa of 
Regulation (EEC) No 1408/71 was already in place, 
in which the Member States could list special non-
contributory  benefits  that,  inter  alia,  serve  solely 
to provide specific protection for the disabled (855). 
In Austria, the main aim was for the benefits to be 

853(

)  Under Article 29 of Regulation (EC) No 574/72 Austrian pensioners are 
entitled to register with a German health insurance fund using form 
E121 and then obtain the same benefits in kind as a German insured 
party.

854(

)  C-215/99 Jauch [2001] ECR I-1933.

855(

)  Article 4(2a) of Regulation (EEC) No 1408/71. 

191

50 years of Social Security Coordination 

Past – Present – Future

‘non-contributory’.  The  Austrian  system  was  thus 
not  funded  by  individual ‘care  contributions’  but 
by general tax revenue (856).

A further factor in Austria is that there is no uniform 
care system. Given Austria’s federal structure, there 
is instead provision for federal care allowances that 
provide  for  benefits  for  everyone  for  whom  the 
federal  government  is  responsible  (those  drawing 
pensions  from  general  social  security,  federal  civil 
servants, those utilising other federal benefits such 
as  care  systems  for  victims  of  war  and  their  fami-
lies)  plus  nine  different  provincial  systems  for  all 
other  groups  of  people  (predominantly  those  in 
employment plus provincial civil servants and their 
families)(857).  From  an  organisational  point  of  view, 
however, care allowances are kept entirely separate 
from  health  insurance.  Federal  care  allowances  to 
pensioners, for example, are paid out by the com-
petent  pension  insurance  body,  while  benefits  for 
those in employment are paid out by the provincial 
government institutions.

Austria  had  therefore  applied  for  care  allowances 
under the federal care allowances scheme to be list-
ed in Annex IIa and for care allowances pursuant to 
the nine provincial care allowance laws to be listed 
in Annex II, Part III, of Regulation (EEC) No 1408/71 

856(
) 

In its judgment on this case, the CJ also challenged the non-contributory 
nature of the system. This was because Austrian legislators — as always 
— had chosen a very complicated variant of funding for the scheme. 
The  contribution  rate  for  health  insurance  was  increased,  meaning 
that  the  pension  insurance  contribution  for  the  health  insurance  of 
pensioners could be reduced, thus saving the state from covering the 
deficit in pension insurance. The money saved could then be pumped 
into care provision. The CJ distrusted this method of funding and found 
that,  ultimately,  it  was  a  contributory  system.  In  reality,  however,  the 
spheres of allocation for health insurance and care provision are kept 
strictly separate in Austria, meaning that not a single euro flows from 
health insurance to care provision. I therefore think that the CJ failed 
to  grasp  the  complexity  of  the  funding  of  social  security  in  Austria. 
Furthermore, though, such considerations were in any case not crucial, 
as  the  CJ,  at  the  same  time,  also  refuted  Austria’s  claim  that  these 
benefits had the character of ‘special benefits’. All the ‘hard work’ was 
therefore  in  vain.  This  also  shows  that  overly  complicated  national 
solutions often cause difficulties for the CJ which then come back to 
haunt the Member States in question.

(

857

)  The  reasons  for  the  existence  of  these  10  different  systems  are  the 
division  of  competences  under  the  Austrian  constitution  and  the 
intention of harmonising what were, prior to the introduction of the 
new system, completely different benefits (such as pension destitution 
top-ups  but  also  provincial  benefit  payments  to  the  blind  and  the 
disabled).  An  agreement  between  the  federal  government  and  the 
nine  provinces  ensured  that  all  10  systems  would  thenceforward 
proceed  on  uniform  principles  and,  above  all,  that  care  allowance 
contributions would be the same across the country. 

relating  to  regional  special  non-contributory  ben-
efits. These arguments were accepted by both the 
Commission  and  all  the  Member  States  with  the 
result that these benefits were only to be awarded 
to residents of Austria (no export) pursuant to the 
wording of Regulation (EEC) No 1408/71. 

The  Jauch  case  related  to  a  single  Austrian  pen-
sioner  (drawing  a  single  Austrian  pension)  who 
lived  in  Germany.  Until  1998,  Mr  Jauch  had  been 
receiving  German  care  allowances (858),  but  these 
were  stopped  in  the  light  of  the  Molenaar  judg-
ment.  He  therefore  applied  for  care  allowances  in 
Austria. Under the wording of Regulation (EEC) No 
1408/71  it  was  clear  that,  in  this  case,  it  was  not 
possible  to  export  federal  care  allowances  (which 
were predominantly what was at issue, given that 
the pensioner was drawing his pension from gen-
eral  social  security).  The  question,  however,  was 
whether  this  ruling  out  of  exports  under  Annex 
IIa was in line with the principles of the EC Treaty. 
The CJ found that Austrian care allowances under 
the federal legislation on care allowances were not 
special  benefits,  as  the  risk  of ‘needing  long-term 
care’  was  an  ordinary  risk  in  sickness  (as  the  CJ 
had already found in the Molenaar case). However, 
‘ordinary’ benefits cannot be listed in Annex IIa of 
Regulation  (EEC)  No  1408/71.  Such  benefits  have 
to  follow  the  general  coordination  rules  for  sick-
ness  benefits. This  means  that,  for  pensioners,  for 
example, an export would have to take place if it is 
Austria that is competent for sickness benefits (and 
is thereby responsible for bearing the costs of ben-
efits in kind where someone is resident in another 
Member State) (859). The judgment meant that Aus-
tria  was  unable  to  refuse  the  export  of  Austrian 
federal care allowances to Germany for Mr Jauch.

(

(

858

)  Since prior to the Molenaar case Germany had worked on the basis 
that care allowances were a benefit in kind that should also be paid 
to  foreign  pensioners  pursuant  to  Article  28  of  Regulation  (EC)  No 
1408/71  (and  reimbursed  by  the  competent  foreign  institution),  if 
the  pensioners  in  question  had  registered  with  a  German  health 
insurance fund using form E121. 

859

)  Pursuant  to  Article  28(1)(b)  of  Regulation  (EEC)  No  1408/71. 
Competence  here  does  not  mean  the  competence  under  the 
applicable  legal  provisions  which,  for  pensioners,  always  rests  with 
the state of residence, but competence to bear costs and for benefits 
in kind (in terms of reimbursement of costs) and for benefits in cash 
through the direct pay-out obligation.

192

Bernhard Spiegel

With this judgment, the CJ has made one thing clear 
in respect of new categories of benefits, namely that 
differing national systems, organisational structures 
or funding are irrelevant. All that matters ultimately 
is the purpose of a benefit. Where this fits, all com-
parable  benefits  provided  by  the  various  Member 
States must be coordinated according to the same 
principles. There is another lesson to be learnt from 
the Molenaar and Jauch judgments, and that is that, 
until  Community  legislators  provide  discrete  prin-
ciples  of  coordination  for  these  new  categories  of 
benefit, the CJ will have no choice but to find appli-
cable to each category of benefit the principles of 
coordination that are most similar to the category 
in question (860).

3. 

The Hosse case

Austria  must  be  the  most  closely  examined  Mem-
ber  State  in  the  European  Union.  All  the  benefits 
that had had export ruled out on the basis of listing 
in the annexes in question ended up being brought 
before the CJ (861). Following the examination of fed-
eral care allowances in the Jauch case, a provincial 
care allowance listed under Annex II, Part III, of Reg-
ulation (EEC) No 1408/71 was also brought before 
the CJ (862).

The  subject  of  the  case  was  a  man  who  com-
muted across the border to work in Austria (in the 
Province  of  Salzburg)  but  lived  with  his  family  in 
Germany. His daughter was disabled and his wife 
devoted herself to looking after this daughter; she 
had given up a previous profession in order to do 
so. When it came to sickness benefits in kind, both 

(

860

)  This principle comes up again and again. When it came to the child-
rearing  benefits  recently  introduced  in  many  Member  States,  too, 
the CJ had no choice but to approximate this category of benefits to 
family  benefits,  albeit  that  such  benefits  are  regarded  as  maternity 
benefits  in  many  Member  States  (cf.,  for  example,  Case  C-275/96 
Kuusijärvi [1998] ECR I-3419 for the classification in Sweden prior to 
the  judgment).  I  will  go  into  child-rearing  benefits  in  greater  detail 
later on.

(

861
) 

In  addition  to  the  Jauch  and  Hosse  cases,  readers  should  also  be 
referred to Case C-160/02 Skalka [2004] ECR I-5613, which examined 
Austrian  compensatory  supplements  to  pensions,  that  were  also 
based  on  Annex  IIa  to  Regulation  (EEC)  No  1408/71.  In  this  case, 
however, the CJ found that Austria was right to base this system on 
the annex.

(

862

)  C-286/03 Hosse [2006] ECR I-1771.

the wife and the daughter were covered under Aus-
trian health insurance along with the cross-border 
worker, the father (863). The question was, however, 
whether there was an entitlement to Austrian care 
allowances for the disabled daughter.

Federal care allowances (as dealt with in the Jauch 
case) were not relevant here, as there was no link to 
the  federal  competence  (the  father  was  in  gainful 
employment and not yet a pensioner).

The  CJ  found  that  the  Province  of  Salzburg’s  care 
allowances  have  the  same  function  as  the  care 
allowances examined earlier in German care insur-
ance  and  under  the  Austrian  federal  legislation 
of  care  allowances.  The  CJ  found  that  the  former 
allowances,  too,  essentially  serve  to  compliment 
the  health  insurance  benefits  in  order  to  provide 
cover for a person’s additional expenditure on care. 
The argument put forward by the Austrian govern-
ment, that there was no connection at all to health 
insurance from an organisational point of view, was 
rebuffed as irrelevant (864). The CJ also found that it 
is  immaterial  that,  under  the  Austrian  system,  the 
entitlement  to  a  care  allowance  is  an  individual 
entitlement on behalf of the person requiring care 
(in this case the daughter), but that the entitlement 
to sickness benefits under the regulation can only 
be derived from the legal situation of the father (the 
only individual in the case subject to Austrian legal 
provisions) (865).  Ultimately,  a  benefit  of  this  nature 
for a family member always benefits the cross-bor-
der  worker  (too). The  CJ  therefore  also  denied,  on 

863(

)  Under Article 19 of Regulation (EEC) No 1408/71, both of them had 
registered with a German health insurance fund using form E106.

864(

)  The  CJ  thereby  broke  this  link  completely  for  the  first  time.  In  the 
Jauch case it had still made reference, amongst other things, to the 
increase  in  health  insurance  contributions  in  order  to  underpin  the 
connection with health insurance (para. 33). In the case of provincial 
care  allowances,  with  their  autonomous  funding  from  the  relevant 
provincial  budget  and  the  organisational  competence  of  the 
provincial government, such a link could no longer be claimed.

865(

)  A  view  also  shared  with  the  case-law  on  family  benefits  (cf.,  for 
example.  the  judgment  in  Case  C-543/03  Dodl  and  Oberhollenzer 
[2005]  ECR  I-5049).  For  family  benefits,  too,  it  is  irrelevant  who  is 
entitled  to  make  a  specific  benefit  claim  under  a  given  national 
system. All that matters is ultimately the family connection. Where it 
is a family that is being dealt with, each family member is entitled to 
claim the benefit, regardless of whether it is that person or another 
family member who is subject to the legal provisions of the Member 
State in question.

193

50 years of Social Security Coordination 

Past – Present – Future

the same lines, that these Austrian benefits have the 
quality of special benefits. These, too, were deemed 
to be sickness benefits, which means that the gen-
eral stipulations of the ‘Sickness benefits’ chapter of 
Regulation  (EEC)  No  1408/71  apply.  Mr  Hosse  was 
also entitled to care allowance from the Province of 
Salzburg for his daughter, even though she lived in 
Germany, on that basis (866).

The  CJ  has  been  consistent  again  with  that  deci-
sion. The federal structure of a Member State is like-
wise not something that can exclude a benefit that 
only serves to cover a general and ‘ordinary’ social 
security  risk  from  coordination. Therefore  it  is  not 
only the national organisation of the various social 
security systems that is irrelevant, but also the allo-
cation  of  competence  within  the  Member  States. 
Even  benefits  that,  like  the  Province  of  Salzburg’s 
care allowances, are viewed by the national system 
as social assistance are not immune from the appli-
cation  of  the  general  coordination  rules.  It  would, 
of course, be worthwhile in this context to also take 
a closer look at the special role of regional benefits, 
an area in which the CJ has just recently made some 
waves (867). To do so would exceed the scope of this 
text, however, and it is also of less importance when 
it  comes  to  the  Austrian  care  system  as  all  nine 
provinces  of  Austria  have  an  almost  identical  care 
system,  meaning  that  there  are  no  regional  differ-
ences in such benefits.

The judgment in the Hosse case does give cause for 
further reflection, however. The CJ stated that Aus-
tria’s competence only exists where the daughter is 
not entitled to similar benefits in the state in which 

866(

)  Pursuant to Article 19(2) of Regulation (EEC) No 1408/71.

867

(

)  Judgment  in  Case  C-212/06  Gouvernement  de  la  Communauté 
française et Gouvernement Wallon [2008] ECR I-1683. Comprehensive 
coverage of this case, and in particular the impact thereof, can be 
found  in  H.  Verschueren, ‘La  régionalisation  de  la  sécurité  sociale 
en Belgique à la lumière de l’arrêt de la cour de justice européenne 
portant  sur 
l’assurance-soins  flamande’,  Développements  de 
l’Europe Sociale, 2008, 173. It would also be interesting to examine 
how this CJ judgment is to be seen in relation to the judgment of 
the  EFTA  Court  in  Case  E-3/05  EFTA  Surveillance  Authority  v  The 
Kingdom of Norway of 3 May 2006, in that regional special benefits 
such as Norway’s Finnmark supplement very likely provide a certain 
guarantee of existence.

194

she lives (868). How are we to understand this? Under 
the system pursuant to Regulation (EEC) No 1408/71, 
there can only ever be one competent state for sick-
ness benefits. For family members this means either 
the state of residence, if an occupation is pursued 
in that state by a family member, or another Mem-
ber  State  in  which  a  family  member  pursues  an 
occupation (869).  This  system  does  not  allow  for  a 
priority entitlement in the state of residence in all 
cases. Would the CJ thus have thrown out Austria’s 
obligation  to  export  the  care  allowance  in  a  case 
where the daughter lived in a Member State other 
than  Germany  (where  insurance  is  always  neces-
sary for entitlement to a care allowance, something 
which was not the case for the Hosse family) if, for 
example, all residents of the state of residence were 
entitled  to  a  care  allowance?  As  I  say,  that  is  not 
comprehensible from a systematic point of view as 
long  as  Regulation  (EEC)  No  1408/71  continues  to 
be the applicable legal basis. Yet perhaps the CJ has 
already given us a route to future coordination (pri-
ority always to the state of residence) (870)? This will 
be an enthralling question, in any case!

4. 

The Gaumain-Cerri case

This case also represents a very good example of new 
benefit  systems  that  the  Member  States  have  intro-
duced. It also highlights in a particularly clear manner 
the complexity with which we have to do battle.

The starting point was once again the German legal 
situation in relation to care benefits. This is because 
German  legislators  have  introduced  benefits  not 
only  for  those  people  in  need  of  care  themselves 
(care  allowances  and  care  benefits  in  kind)  but 
also  complementary  benefits  of  a  completely  dif-
ferent  nature.  German  law  also  regulates  the  situ-
ation of the carer (which is to say the person who 

(

(

(

868

)  Paragraph 56 of the judgment.

869

)  Cf.  Article  19(2)  of  Regulation  (EEC)  No  1408/71,  which  lays  down 

precisely these differing priority rules.

870

)  The  judgment  in  Case  C-352/06  Bosmann  [2008]  ECR  I-3827  could 
point this way. This case can be regarded as breaking a taboo in that, 
despite  the  clear  stipulation  of  the  legal  provisions  to  be  followed 
under  Regulation  (EEC)  No  1408/71,  a ‘residual  competence’  of  the 
state of residence was still recognised.

Bernhard Spiegel

looks  after  the  person  requiring  care)  on  a  statu-
tory basis. Under certain circumstances such carers 
receive protection in German pension and accident 
insurance whereby the state pays the contributions 
providing the person in question with non-contrib-
utory insurance cover.

From a system point of view, that is not unique to 
the  German  legal  picture.  In  some  Member  States 
the  carers  themselves  receive  a  benefit  (e.g.  Ire-
land’s  carers’  pensions  and  carers’  allowances), 
although these are primarily a means of replacing 
lost  income  for  such  people.  It  is  not  only  in  con-
nection  with  care  benefits  that  complementary 
insurance provisions are in place, however. Nation-
al  legislators  are  increasingly  taking  the  route  of 
rewarding activities that can be viewed as being in 
the  public  interest  with  complementary  insurance 
provisions  of  this  nature  for  those  affected  (who, 
as a rule, are unable to pursue any gainful employ-
ment or who must limit such employment in order 
to  attend  to  the  activities  in  question).  Examples 
include health insurance for people who are raising 
children (rather than being in gainful employment) 
and pension insurance periods for those who look 
after sick or dying close relatives.

The  first  such  cases  to  come  before  the  CJ  con-
cerned pension insurance for carers under German 
legal provisions (871). The circumstances of the cases 
were as follows.

•	

In one case, a family lived in France and the father 
and  mother  both  crossed  the  border  to  pursue 
an occupation in Germany; the son was insured 
alongside  them  in  the  German  health  and  care 
insurance  system  and  was  receiving  a  German 
care allowance as a result of a disability, and both 
parents looked after their disabled son (872).

(

(

871

)  Cases C-502/01 Gaumain-Cerri and C-31/02 Barth [2004] ECR I-6483.

872

)  C-502/01 Gaumain-Cerri [2004] ECR I-6483.

•	

In the other case, a German citizen lived in Bel-
gium,  from  where  she  cared  for  a  retired  civil 
servant  living  in  Germany  who  was  claiming 
German care benefits. She was also paid by the 
civil servant for her care activities, but they did 
not amount to gainful employment under Ger-
man law (873).

Under  German  national  law,  this  pension  insurance 
is limited to carers residing in Germany. In both sets 
of circumstances, there was therefore no entitlement. 
The  CJ  now  had  to  decide  how  this  pension  insur-
ance was to be regarded from the perspective of EC 
law.  The  interesting  approach  taken  here  was  that 
the  questions  referred  for  a  preliminary  ruling  were 
not  seeking  to  examine  these  insurance  systems  in 
connection with the ‘legislation applicable’ (874), but as 
‘benefits’. The CJ found that these pension insurance 
benefits, too, were to be regarded as supplemental to 
the care allowances and that they were therefore sick-
ness benefits within the meaning of Regulation (EEC) 
No 1408/71, just like the care allowances. At first sight, 
this  verdict  is  utterly  incomprehensible  —  how  can 
pension insurance be considered a sickness benefit?

However,  after  thorough  examination,  the  judg-
ment proves completely systematic and consistent. 
This is because Member States have all sorts of dif-
ferent ways of providing for protection of the pen-
sion entitlements of carers. They can, for example, 
provide  a  correspondingly  higher  care  allowance 
for those in need of care so that the sums are suf-
ficient either to give carers enough money to look 
after  their  own  pension  insurance  themselves  or 
else for those in need of care to pay for such pen-
sion  insurance  for  ‘their’  carers  directly.  It  should 
be  clear  from  previous  CJ  case-law  on  care  allow-
ances  that  a  care  allowance  increased  in  this  way 
would  be  unreservedly  regarded  as  a  sickness 
benefit  in  cash  and  would  therefore  be  subject  to 

873(

)  The Barth case.

874(

)  Title II  of Regulation  (EEC) No 1408/71 —  an  examination pursuant 
to this title would certainly have pointed in a different direction as it 
would then have been an examination of the individual situation of 
the carer, which can lead to completely different competences than 
in the case of the person requiring care.

195

50 years of Social Security Coordination 

Past – Present – Future

coordination of benefits (irrespective, of course, of 
the Member State of residence of the carer — the 
place of residence would be completely irrelevant 
as the care allowance would not have any specific 
purpose). Why,  therefore,  should  a  different  result 
be obtained if the state steps into the breach itself 
and  pays  the  pension  insurance  contribution  (for 
the benefit of those requiring care)? From this point 
of view it is also clear that paying pension insurance 
contributions for carers can constitute a benefit in 
cash and cannot constitute a benefit in kind. There 
is therefore an entitlement to pension insurance on 
the part of the carers on the basis of this judgment.

A  further  interesting  aspect  of  this  judgment  is, 
of  course,  not  only  the  impact  on  those  requiring 
care, but also the impact on carers. Regulation (EEC)  
No  1408/71  stipulates,  in  the  chapter  ‘Legislation 
applicable’, the legislation to which a person is sub-
ject. For example, a person in employment is subject 
to the legislation of the Member State in which the 
work is performed (875). Thus, where the legislation of 
this state of employment subjects this gainful activ-
ity as a carer to insurance in a system for the working 
population (876), this judgment results, where another 
Member State is competent for the benefits in cash, in 
double insurance situations in favour of those need-
ing care — the very type of situation that the system 
under Regulation (EEC) No 1408/71 seeks to avoid (877). 
In my opinion, this is an issue that has not yet been 
sufficiently clarified. In Regulation (EC) No 883/2004  

875(

)  Article 13(2)(a) of Regulation (EEC) No 1408/71.

876(

)  This protection in a system that applies to employed persons is the 
precondition for the person in question to be covered by Regulation 
(EEC)  No  1408/71  (Article  1(a)  of  the  regulation).  For  a  carer,  it  can 
therefore  come  down  to,  for  example,  whether  the  relationship 
between  the  person  requiring  care  and  the  carer  can  be  regarded 
as  a  working  relationship  and  whether  the  payment  made  exceeds 
the  national  minimum  values  for  entry  into  compulsory  insurance 
systems.  As  a  rule,  there  is  generally  supposed  to  be  harmony 
between  the  terms ‘employed  person’  and ‘pursuing  an  occupation’ 
(CJ in Case C-340/94 de Jaeck [1997] ECR I-461). It can therefore be 
assumed  in  our  case  that  persons  who  are  regarded  as  employed 
persons in the state in which they act as a carer on the basis of that 
activity are generally also subject to the legislation of that state as a 
person pursuing an occupation there. In so doing we are, of course, 
consciously  not  paying  attention  to  certain  groups,  such  as  self-
employed carers established in one Member State who go to another 
Member State in order to carry out care activities (see, for example, 
CJ  judgment  C-178/97  Banks  [2000]  ECR  I-2005)  and  are  therefore 
subject to the legislation of  the state in  which they are  established 
(Article 41a(1)(a) of Regulation (EEC) No 1408/71). 

877(

)  Article 13(1) of Regulation (EEC) No 1408/71.

it was at least clarified that such insurance as an addi-
tion to a benefit, like the pension insurance as the car-
er for someone who draws German care allowance, 
does  not  mean  that  German  legal  provisions  will 
have general application to that carer (878). This means 
that, for example, a carer who looks after a German 
pensioner in Spain and who him/herself also lives in 
Spain, albeit having earned time in the German pen-
sion  insurance  system,  cannot  also  claim  German 
family benefits for his/her children (879).

The question of insurance for carers has thus been 
relatively clearly decided. What is the situation for 
insurance relating to other social security benefits, 
however? Let us take the example of the legal situ-
ation  in  Austria,  according  to  which  those  claim-
ing  child-rearing  allowances  are  also  given  health 
insurance cover. In this case, is the health insurance 
a  family  benefit  and  is  it  therefore  subject  to  the 
same  coordination  as  family  benefits?  If  the  CJ’s 
train of thought is followed consistently, this is the 
conclusion  that  you  reach.  The  consequences  are 
very complicated, however, and there is no space to 
go into them in detail here (880).

As  I  have  already  said,  such  national  legal  devel-
opments  that  are  designed  to  provide  another 
insurance  package  as  an  add-on  to  social  ben-
efits are not unusual occurrences. As soon as such 
packages  are  subject  to  coordination  due  to  the 
presence  of  cross-border  elements,  however,  the 
picture  immediately  becomes  very  complicated. 
The  solution  provided  by  the  CJ,  whereby  the 
insurance  follows  the  triggering  benefit,  may  be 

(

(

878

)  Recital 18a to Regulation (EC) No 883/2004, which was incorporated 

into the text by the first amendment thereof.

879

)  Under  Article  73  of  Regulation  (EEC)  No  1408/71  and  Article  67  of 
Regulation  (EC)  No  883/2004,  a  person  subject  to  the  legislation  of 
one Member State can also claim family benefits under the legislation 
of that state for children residing in another Member State.

(

880
) 

It is thus very often the case that, when it comes to family benefits, 
two  Member  States  are  responsible  for  conferring  benefits.  One  of 
them bears primary responsibility, the other a lesser competence and 
the latter state pays its family benefit only as a differential supplement 
if  the  benefit  amount  under  its  legislation  is  higher  than  that  of 
the  primarily  competent  Member  State  (this  has  now  been  set  out 
clearly under Article 68 of Regulation (EC) No 883/2004). Can health 
insurance  be  regarded  as  a ‘differential  supplement’  if  the  Member 
State with primary responsibility does not provide health insurance 
for the person receiving benefits?

196

Bernhard Spiegel

consistent,  but  it  also  sometimes  leads  to  almost 
insurmountable  problems.  Even  the  new  Regula-
tion (EC) No 883/2004 has not provided any clear 
solution to such problems.

5.  Commission proceedings against 
Parliament and the Council

Despite  the  relatively  clear  line  taken  by  the  CJ  in 
respect of the new category of benefits constituted 
by care benefits, a number of Member States found 
that  the  picture  was  not  that  clear. This  is  because 
many  Member  States  had  listed  their  benefits  for 
the disabled or those in need of care in Annex IIa of 
Regulation (EEC) No 1408/71, as Austria had prior to 
the Jauch judgment. As not all Member States have 
national  courts  to  the  same  extent,  which  could 
immediately refer each question to the CJ for a pre-
liminary ruling, for such states there was little chance 
of such listings in Annex IIa being reviewed by a court. 
The Commission, in its role as guardian of the Trea-
ties, could not just wait to see what happened and 
had to act instead. After a very intensive discussion 
process  in  the  Administrative  Commission,  during 
which  all  the  benefits  listed  in  Annex  IIa  were  ana-
lysed in detail, the Commission tabled a proposal to 
amend Annex IIa of Regulation (EEC) No 1408/71, as 
a result of which all the care benefits that correspond 
to  German  or  Austrian  care  allowances  would  be 
removed from the annex. However, not all the Mem-
ber States affected were willing to accept the Com-
mission’s proposal immediately. Further negotiation 
was necessary in the Council before the majority of 
Member  States  were  finally  willing  to  remove  their 
entries from the annex. Only three Member States — 
Finland,  Sweden  and  the  United  Kingdom  —  were 
not willing to take this step. In order to prevent the 
total  failure  of  the  negotiations,  these  benefits  had 
to be left in Annex IIa to the regulation as a compro-
mise (881). Just as this agreement was being reached, 
however, the Commission was bringing proceedings 
before the CJ.

(

881

)  Regulation (EC) No 647/2005 (OJ L 117, 4.5.2005, p. 1).

Ultimately,  that  action  did  provide  the  required 
clarity (882). What happened was that the CJ general-
ised its line from the case-law thus far. It found that 
the  affected  benefits  in  the  three  Member  States 
(Finnish  childcare  allowance,  Swedish  care  allow-
ance  for  disabled  children  and  disability  allow-
ance, and the UK’s disability living allowance (DLA), 
attendance  allowance  (AA)  and  carer’s  allowance 
(CA) (883)), too, were ‘ordinary’ sickness benefits that 
should  be  subject  to  the  general  coordination  of 
such  benefits.  The  mobility  element  of  the  DLA 
alone  was  excluded  from  this  conclusion,  as  the 
CJ  found  that  it  was  an  element  of  social  assist-
ance. The CJ stated that these benefits assisted the 
parents  of  disabled  children  to  provide  the  care, 
supervision  and  rehabilitation  of  those  children 
(the CJ’s view was that the primary purpose of the 
said benefits was nevertheless of a medical nature) 
and that they provided assistance for adult disabil-
ities  and  were  designed,  by  paying  for  assistance 
for the disabled by a third party, to assist in bearing 
the costs created by the illness and improving the 
quality of life of recipients and promoting the inde-
pendence and social integration of the disabled. It 
is also important that, in the case of these benefits, 
we are quite clearly dealing with benefits that have 
absolutely  no  connection  with  the  national  sick-
ness benefit system. The original requirement pur-
suant  to  the  Molenaar  and  Jauch  cases  of  having 
some  connection,  at  least  from  an  organisational 
point  of  view  or  in  terms  of  funding,  which  many 
Member  States  were  still  assuming  to  apply,  was 
thus finally deemed to be irrelevant.

From a system point of view, in any case, this judg-
ment is to be welcomed as it ensures that all com-
parable benefits from a socio-political point of view 
will always have to be subject to the same principles 

882(

)  Case C-299/05 Commission of the European Communities v European 
Parliament  and  Council  of  the  European  Union  [2007]  ECR  I-8695. 
For  procedural  reasons,  the  Commission,  which  was  taking  part  in 
the  negotiation  process,  was  unable  to  bring  Treaty  infringement 
proceedings  against  the  three  Member  States  in  question  under 
Article 226 of the Treaty, but was only able to bring a case under the 
annulment procedure pursuant to Article 230 of the Treaty.

883(

)  These benefits had previously been listed under points W. Finland (b), 
X. Sweden (c) and Y. United Kingdom (d), (e) and (f ) of Annex IIa to 
Regulation (EEC) No 1408/71. 

197

50 years of Social Security Coordination 

Past – Present – Future

of coordination. It has also increased the degree of 
readiness  of  the  Member  States  to  consider  new 
coordination methods (884). It is also worth pointing 
out that this revision of Annex IIa to Regulation (EEC) 
No 1408/71 was not limited to the Member States. 
The review was not without consequences for the 
countries  of  the  EEA;  the  EFTA  Court  thus  found 
that a Liechtenstein benefit must be removed from 
Annex IIa to Regulation (EEC) No 1408/71 in the EEA 
Treaty version (885).

C.  Problems arising from this case-law

It can therefore be assumed, on the basis of these 
judgments, that:

•	

•	

there is a new category of benefits constituted 
by care allowances; 
these  must  be  coordinated  in  a  uniform  way 
under  the  coordination  rules  of  Regulation 
(EEC)  No  1408/71  for  sickness  benefits,  some-
thing  that  will  result,  firstly,  in  the  granting  of 
benefits  in  kind  by  the  institution  of  the  state 
of residence or stay at the expense of the com-
petent state and, secondly, in the export of care 
allowances in cash.

In  the  light  of  these  conclusions,  which  are  com-
pletely  logical  from  a  systematic  point  of  view, 
the  follow-up  question  that  has  to  be  asked  in 
this connection is whether the consequences are 
socio-politically acceptable (886).

884(
) 

In  my  personal  experience  there  was  no  possibility  before  this 
judgment  of  discussing  the  subject  of  the  ‘coordination  of  care 
benefits’  at  the  European  level.  The  representatives  of  the  three 
Member States affected by the proceedings, in particular, denied that 
there  even  was  a  general  category  of  benefits  constituted  by  care 
benefits. During its Presidency of the EU in 2006, Austria attempted 
to  discuss  the  subject  of ‘new  ways  to  coordinate  care  benefits’  in 
the Administrative Commission, but this attempt failed in the face of 
opposition from these three states.

885(
) 

Judgment  of  the  EFTA  Court  in  Case  E-5/06  EFTA  Surveillance 
Authority v Liechtenstein dated 14 December 2007 on the so-called 
‘helplessness allowance’ under Liechtenstein law.

886(

)  This is not a test that the CJ would normally perform, however. Even 
in looking for reasons to justify the restriction of the basic freedoms, 
the  financial  equivalence  of  the  social  security  systems  is  generally 
accepted as a justification for restricting measures (e.g. with regard to 
restrictions to the freedom to provide services in Case C-385/99 Müller-
Fauré  and  van  Riet  [2003]  ECR  I-4509).  Whether  an  interpretation  of 
European  law  leads  to  socio-politically  harmonious  results,  however, 
usually plays no role in the CJ’s decision-making process.

198

1. 

The random nature of which case comes 
forward

I must first of all make clear that, in my view, when 
the CJ is resorted to, the case actually in question 
is  always  highly  significant (887).  Although  ‘what 
if?’  is  a  moot  question,  I  still  feel  the  need  to  ask 
it  when  it  comes  to  care  benefits.  What  if  the  CJ 
had first had the Jauch case to decide rather than 
the Molenaar case? I would like to remind you all 
that  in  Austria,  due  to  the  way  the  benefit  was 
developed  and  also  the  organisational  structure, 
the  care  allowances  under  the  federal  legislation 
on care allowances were much closer to pensions 
than  to  health  insurance  benefits.  Would  the  CJ 
then, with a completely open mind, perhaps have 
categorised  care  benefits  as  invalidity  benefits? 
The  result  of  that  would  have  been  that  Title  III, 
Chapters 2 and 3, of Regulation (EEC) No 1408/71 
would  have  applied,  which  would  have  meant 
that  we  would  have  had  clear  coordination  for 
benefits  in  cash  but  not  for  care  benefits  in  kind. 
Care allowances, however, could then be granted 
on  a  pro-rata  basis  in  relation  to  periods  of  pen-
sion  insurance.  I  think  that  would  have  been  the 
worst solution. For one thing, it would have been 
almost impossible to administer for many Member 
States  due  to  the  particularities  of  their  national 
legal  situations  and,  for  another,  it  may  have  led 
to a considerable increase in the number of inter-
state cases (888). Looked at in this way, we should be 
glad that Molenaar came before Jauch.

887

(

)  Thus it always comes down to the specifics of the question actually 
put  to  the  CJ.  A  good  example  of  this,  in  my  view,  would  be  Case 
C-352/06 Bosmann [2008] ECR I-3827. What would have interested 
everyone  in  the  circumstances  of  this  case  is,  in  any  event,  the 
question  of  whether  the  state  of  residence  is  obliged,  despite  the 
competence of a different Member State due to the pursuing of an 
occupation,  to  also  grant  the  benefits  envisaged  for  all  residents 
and not (this being the question put in this case) whether that state 
is prevented from granting benefits under its legislation.

(

888
) 

Invalidity  benefits  would  have  to  be  granted  by  the  state  in  which 
the person in question had earned periods of insurance cover at any 
point. In coordination as a sickness benefit there is, in principle, only 
ever one competent Member State, namely the one that is currently 
competent for sickness benefits. 

Bernhard Spiegel

2. 

Export is not controllable from  
a socio-political point of view

All  care  benefits  have  the  socio-political  goal  of 
ensuring  an  adequate  level  of  benefits  for  the  resi-
dents of a Member State. There are, of course, many 
factors  involved  in  this  and  they  only  relate  to  the 
Member  State  in  question.  When  it  comes  to  ben-
efits  in  cash  such  as  care  allowances,  for  example, 
the cost level in the country (how high are the costs 
of a carer, household help, aids such as wheelchairs? 
How  much  do  special  dietary  requirements  cost? 
etc.),  the  range  of  other  benefits  (e.g.  care  homes 
provided  by  the  Member  States  in  question)  and 
also  other  privileges  (such  as  free  travel  on  public 
transport for the disabled) are also always of particu-
lar importance. National legislators take all of these 
factors  into  account  when  setting  the  level  of  care 
benefits in cash. The socio-political goal is for it to be 
the very interaction of all these factors that provides 
adequate protection for those in need of care.

For combined benefits (combination of care benefit 
in cash and in kind) the picture is even clearer. With 
these  benefits,  national  legislators  are  aiming  to 
ensure the necessary protection through this inter-
action alone.

As  soon  as  a  care  allowance  is  exported  to  anoth-
er  Member  State,  the  same  interaction  no  longer 
applies. The following factors are worthy of particu-
lar attention.

•	

•	

Depending  on  the  cost  level  in  the  state  of 
residence,  the  care  allowance  exported  from 
another Member State may also be too high (in 
the case of export into a low-wage country) or 
too low (in the case of export into a high-wage 
country),  at  which  point  it  partly  mutates  into 
an  additional  income  for  the  person  in  need 
of  care  or  forms  an  obstacle  to  that  person’s 
mobility as it is insufficient to cover the costs of 
the care needed.
The same applies when the range of other ben-
efits provided in the two states is different (e.g. 

•	

where  one  state  provides  free  places  in  state 
care  homes  or  free  travel  on  public  transport 
and the other does not).
Such  consequences  also  arise  for  combined 
benefits; if the care allowance that is exported 
only achieves the socio-political goal in combi-
nation with care benefits in kind, it is not possi-
ble to achieve this goal if the state of residence 
does  not  have  such  care  benefits  in  kind;  on 
the flip side, a care allowance that is intended, 
in the system of the state in question, to cover 
all care costs can easily lead to an undesirable 
excess  of  provision  when  exported  to  a  Mem-
ber  State  that  provides  combined  benefits  or 
only provides care benefits in kind.

Admittedly,  that  is  not  necessarily  specific  to  care 
benefits. Living costs (the level of costs) in the rele-
vant country of residence do, of course, always have 
an  impact  on  all  exported  benefits  in  cash (889).  For 
other benefits, too, there is an interaction between 
benefits  in  kind  and  in  cash,  with  the  result  that 
there can always be negative consequences to their 
export (890).  However,  whenever  an  obligation  to 
export a new category of benefit is conferred, such 
consequences  are  shown  up  again  in  full  clarity. 
Whenever cross-border careers are involved, national 
social policy loses its ability to influence and things 
that, on a national level, constitute a well-balanced 
combination of different elements that only achieve 
the goal in question when taken together fail to do 
so on the other side of the border. That, however, is 
an unavoidable consequence as long as we do not 
have a uniform social security system in Europe.

One important lesson that we can learn from the 
case-law thus far is that, even if the Member States 

889(

)  This is also the case, for example, for pensions, although in that case 
there  is  a  safety  net  in  that,  if  the  pensions  exported  from  another 
Member State do not amount to the sum regarded as the minimum 
pension in the state of residence, that state has to top up the foreign 
pensions to that level (Article 10a(3) of Regulation (EEC) No 1408/71, 
which states that non-contributory minimum pension levels, which 
are generally listed as not exportable in Annex IIa to Regulation (EEC) 
No 1408/71, must also be granted to foreign pensioners).

890(

)  This  interaction  can  be  seen,  for  example,  in  the  case  of  invalidity 
interaction  with  back-to-work  and 
benefits,  which  have  an 
rehabilitation benefits, or in the case of family benefits, which have 
an interaction with benefits in kind such as free nursery places.

199

50 years of Social Security Coordination 

Past – Present – Future

take account of the impact of EC law on their plan-
ning  and  political  preparation  of  a  new  category 
of  benefits,  this  will  not  protect  them  from  disa-
greeable  surprises.  Both  in  Germany  and  in  Aus-
tria,  the  national  system  was  designed,  on  the 
introduction  of  care  benefits,  in  such  a  way  that 
no  export  of  care  allowances  would  have  to  take 
place under EC law (in Germany by means of  the 
plan of providing benefits in kind and in Austria by 
means  of  the  plan  of  providing  special  non-con-
tributory  benefits).  As  we  have  seen,  these  plans 
did not bear fruit. This means that there is always 
a residual risk for national legislators, when intro-
ducing a new category of benefits, that European 
law  may  give  rise  to  socio-politically  undesirable 
consequences, for example by means of an obliga-
tion to export the benefits in question.

3.  Co-occurrence of benefits in cash and in 
kind which pursue the same objective

Next,  I  would  like  to  highlight  one  particularly 
unsatisfactory  aspect  of  the  coordination  of  care 
benefits  as  sickness  benefits.  Before  the  introduc-
tion of this new category of benefits, the export of 
sickness benefits in cash was a relatively clear mat-
ter. It was predominantly a matter, in the event of 
illness (891), of sick pay for the employed population 
with the intention of attempting to prevent losses 
of income due to the inability to work as a result of 
an illness. The applicable coordination rules do not 
cause any problems for these benefits. It is simply 
logical  for  it  to  be  the  Member  State  in  which  the 
person  in  question  was  insured  during  the  period 
of gainful employment that should pay this benefit 

(

891

)  The export regulation under Regulation (EEC) No 1408/71 in relation 
to benefits in cash pursuant to Title III of Chapter 1 also had a role to 
play when it came to maternity benefits (‘weekly allowances’), which 
I  will  not  be  going  into  in  further  detail,  but  where  yet  more  new 
benefit systems could also come into play in future. Many states have 
introduced  child-rearing  benefits  for  parents  raising  children  (often 
over a much longer period than is necessary in connection with the 
special situation in which mothers find themselves as a result of the 
birth  itself,  during  which  period  mothers  should  not  work  in  order 
to protect them, and often optionally for both parents). A number of 
states  viewed  these  child-rearing  benefits  as  maternity  benefits  for 
coordination purposes, rather than as family benefits. For these new 
benefits, too, it was the CJ that had to provide clarity (see, in particular, 
Case C-275/96 Kuusijärvi [1998] ECR I-3419), by deciding against the 
national system in question that these were uniformly to be regarded 
as family benefits.

once  the  inability  to  work  has  occurred (892),  rather 
than,  for  example,  the  state  of  residence.  It  is  also 
clear that there cannot be any benefits in kind that 
serve  the  same  purposes  as  sick  pay.  This  means 
that there can be no accumulation of benefits with 
the same socio-political aim.

The  application  of  the  coordination  rules  under 
Regulation (EEC) No 1408/71 to the new care ben-
efits in cash meant that a category of benefits for 
which  these  rules  had  not  been  conceived  was 
now  being  covered.  The  consequences  of  these 
coordination rules can be illustrated by the follow-
ing example.

An Austrian pensioner lives in Germany and draws 
only  an  Austrian  pension.  As  a  result  of  the  appli-
cability of coordination to sickness benefits, Austria 
is  therefore  the  competent  Member  State  when  it 
comes  to  health  insurance (893).  Austria  therefore 
has to pay sickness benefits in cash directly, while 
Germany,  as  the  state  of  residence,  pays  benefits 
in  kind  for  sickness  in  accordance  with  German 
legislation,  but  the  costs  of  these  benefits  in  kind 
have to be reimbursed by the competent Austrian 
health insurance fund (894). As it is Austria that bears 
the costs, the competent Austrian health insurance 
fund may also retain the health insurance contribu-
tions from the Austrian pension (895).

Consequently — as we have already seen a number 
of times — Austria has to export care allowances to 
Germany  where  this  pensioner  is  in  need  of  long-
term care (under the Austrian system, this includes a 
contribution to all care-related expenses, including, 
for  example,  the  costs  of  a  home  help  paid  for  by 
the person in need of care). Since, however, under 

(

(

(

892

)  Pursuant to Article 19 of Regulation (EEC) No 1408/71, for example.

893

)  Pursuant to Article 28(2) of Regulation (EEC) No 1408/71.

894

)  Article  28(1)  of  Regulation  (EEC)  No  1408/71,  according  to  which, 
however, costs are not to be calculated in accordance with the actual 
costs  of  the  individual  case  in  question  but  instead  to  be  worked 
out  on  a  flat  rate  according  to  the  average  costs  of  treatment  of  a 
pensioner  insured  in  Germany  (Article  95  of  Regulation  (EEC)  No 
574/72); in calculating this flat rate, Germany also includes the costs 
of  care  benefits  in  kind  (see  point  2  of  Administrative  Commission 
Decision No 175, OJ L 47, 19.2.2000, p. 32).

(

895

)  Article 33 of Regulation (EEC) No 1408/71.

200

Bernhard Spiegel

its national law, Germany also has care benefits in 
kind, these (such as a home help (896), for example), 
too,  can  be  claimed  by  the  Austrian  pensioner. 
Austria must also reimburse the costs of such ben-
efits  in  kind,  however.  There  is  therefore  the  risk 
that the Austrian care allowance will no longer be 
necessary  in  order  to  cover  the  care-related  addi-
tional  costs  of  the  person  in  need  of  care  (in  such 
circumstances  the  care  allowance  mutates  into  an 
additional income); on the other hand, Austria has 
to pay twice — once through the export of the care 
allowance  and  then  a  second  time  through  the 
reimbursement of costs for the care benefits in kind 
granted by Germany (897).

In the preparation of Regulation (EC) No 883/2004, 
this accumulation of benefits was a point for which 
European  legislators  sought  an  innovative  solu-
tion,  though  the  coordination  of  sickness  benefits 
continued to apply in general (898). It is now provid-
ed (899)  that  the  benefit  in  cash  will  be  reduced  by 
the  amount  of  the  benefit  in  kind  which  could  be 
claimed from the institution required to reimburse 
the cost. Under Regulation (EC) No 883/2004, Aus-
tria  would  be  entitled,  taking  account  of  a  home 
help in Germany where the reimbursement of costs 
to be paid by the German care insurance fund to the 
home help amounts to EUR 200, to deduct EUR 200 
from its care allowance However, the application of 

(

(

(

896

)  For information on the relevant care benefits in kind under German 
legislation,  see  Sections  36  et  seq.  of  German  Social  Security  Code 
(SGB), Vol. XI.

897

)  The  reverse  scenario,  too,  is  problematic.  Thus,  if  a  German  single 
pensioner  lives  in  Austria  he  immediately  loses  the  right  under 
Regulation  (EEC)  No  1408/71  to  also  claim  care  benefits  in  kind 
as  there  are  no  care  benefits  in  kind  under  Austrian  legislation. 
Because only the German care allowance is exported to Austria, but 
German care benefits in kind are often ‘more valuable’ than German 
care  allowances,  this  can  be  regarded  as  a  loss  of  entitlement. The 
CJ  is  currently  dealing  with  this  issue  in  Case  C-208/07  Chamier-
Glisczinski.  Advocate  General  Mengozzi  has  just  argued  in  his  (as 
yet  unpublished)  closing  remarks  of  11  September  2008  that  this 
outright loss of entitlement to German care benefits in kind can have 
a  negative  impact  on  mobility  and  is  therefore  in  contravention  of 
Article 18 of the EC Treaty.

898

)  Above  all,  because  the  new  Regulation  (EC)  No  883/2004  did  not 
succeed in producing a clear definition for care benefits it also proved 
impossible to produce a separate system of coordination for this new 
category of benefits. The status quo was therefore left intact, so that, 
as far as sickness benefits are concerned — with the exception of the 
new  principle  that  the  actual,  rather  than  flat-rate,  costs  should  be 
reimbursed for pensioners, too — exactly the same principles apply 
to care benefits as under Regulation (EEC) No 1408/71.

(

899

)  Article 34 of Regulation (EC) No 883/2004.

this  regulation  is  not  always  as  simple  in  practice. 
This meant that a number of additional clarifications 
had to be included in the implementing regulation 
on Regulation (EC) No  883/2004 (900). Above all the 
issues  of  how  the  competent  Member  State  finds 
out  about  the  reimbursement  amount  of  the  care 
benefit in kind and how the person in need of care 
is  informed  about  his/her  rights  and  obligations 
(such people now have to carefully consider which 
benefits  are  to  their  advantage  and  which  could 
have a detrimental impact) require a great deal of 
cooperation  between  all  those  involved. Time  will 
tell whether this is the ideal solution. We must not 
overlook the fact, however, that this regulation rep-
resents a very important step from a system point 
of view. Through this arrangement, European legis-
lators have recognised the special position of care 
benefits within the category of sickness benefits. It 
is possible that this regulation is thus the first step 
towards  separate  coordination  of  care  benefits, 
something that I will deal with in more detail in the 
next section.

d.  Possible solutions?

The  problems  that  have  been  identified  in  the 
application  of  the  coordination  rules  for  the  sick-
ness benefits to care benefits, as well as, above all, 
the undesirable effects from a socio-political point 
of  view,  make  new  solutions  —  different  from  the 
coordination  of  sickness  benefits  —  an  attractive 
idea.  The  fundamental  question  is  whether  there 
are solutions that lead to fair results, that are achiev-
able from an administrative point of view and that 
are also in line with the principles produced by the 
CJ. I will discuss a few different approaches to find-
ing a solution below but, of course, none of them 
can be conclusive.

900(

)  Article 31(1) of the new implementing regulation. The supplementary 
clarifications  predominantly  relate  to  combination  benefits.  If  a 
person  in  need  of  care  were  entitled  to  EUR  500  of  care  allowance 
in  the  competent  Member  State  together  with  another  EUR  500  of 
care benefits in kind (thus EUR 1 000 worth of entitlements to care 
benefits), the EUR 500 of care allowance may not be reduced when 
being exported to another Member State if the person in need of care 
claims EUR 400 of care benefits in kind in his/her state of residence, 
as the sum of EUR 1 000 has not been exceeded (only EUR 900 have 
been consumed).

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Past – Present – Future

1.  Always make the state of residence 

competent

Could  not  a  new  chapter  be  added  to  Regulation 
(EC)  No  883/2004  for  care  benefits  stating  that  it 
is  always  the  state  of  residence  alone  that  has  to 
provide  the  benefits,  and  indeed  both  benefits  in 
kind (which would be no change to the status quo) 
and benefits in cash (which would be new, as there 
would  then  no  longer  be  any  exports)?  Of  course, 
the  first  argument  against  a  solution  of  this  kind 
would  be  the  existing  case-law  of  the  CJ  on  care 
benefits.  Has  not  the  CJ  made  it  very  plain  that 
care  allowances  are  to  be  exported?  In  my  view 
the CJ has not done so; rather in the light of its first 
decision  that  care  benefits  are  to  be  regarded  as 
social  security  benefits  that  are  therefore  covered 
by  Regulation  (EEC)  No  1408/71,  it  would  have  to 
undertake a categorisation of care benefits into one 
of the existing chapters of coordination in the said 
regulation (given that there is no dedicated chapter 
for care benefits). Since, in the CJ’s view, these ben-
efits fit best into the chapter for sickness benefits, 
the  export  of  care  benefits  in  cash  would  be  the 
logical and inevitable consequence of this.

Could social security benefits be limited to the rel-
evant  residential  population  in  a  dedicated  coor-
dination  chapter?  There  is  a  clear  precedent  for 
this  in  terms  of  special  non-contributory  benefits, 
which are listed in Annex IIa to Regulation (EEC) No 
1408/71. As the CJ has found, certain benefits, which 
are primarily those that resemble social assistance 
and are closely connected with their social environ-
ment, can be excluded from export in compliance 
with  the  principles  of  the  EC Treaty (901).  Care  ben-
efits, too, are certainly closely linked to their social 
environment. There is thus an explicit possibility of 
listing benefits that serve solely to provide specific 
protection for the disabled in Annex IIa of Regula-
tion (EEC) No 1408/71, and care benefits are at the 

very least very close to this category of benefits (902). 
They  do,  however,  perhaps  lack  the  character  of  a 
‘special benefit’ as they are usually something that 
national systems allow any resident to claim (903).

I  do  see  another  way,  however,  of  achieving  the 
same result. On consideration, I believe that the key 
could lie in the highly varied organisation of these 
benefits at the national level (from benefits in kind 
to combined benefits to pure benefits in cash) (904). 
What  would  be  needed  would  be  to  carry  out  an 
assessment and then make an attempt to find uni-
form  coordination  independent  of  the  national 
organisational structure. It would be interesting to 
see  what  the  CJ  would  have  to  say  about  uniform 
coordination in which all care benefits were coordi-
nated as benefits in kind. The result of this would be 
that care benefits, too, would only ever be granted 
by  the  state  of  residence  in  question,  although  in 
contrast to the benefits listed in Annex IIa, the costs 
would be reimbursed by the competent state. This 
would primarily take account of the legal situation 
in many Member States — one example being Ger-
many — where care benefits are paid for by contri-
butions,  as  the  contributions  received  would  then 
always  be  balanced  out  by  an  obligation  on  the 

(

(

902

)  Article  4(2)(a)(ii)  of  Regulation  (EEC)  No  1408/71.  The  distinction 
between  these  benefits,  which  serve  solely  to  provide  specific 
protection  for  the  disabled,  and  care  benefits  is  anything  but 
clear. Thus,  the  CJ  itself  has  qualified  Belgian  aid  to  the  disabled  in 
application of the association agreement with Morocco as a benefit 
for the disabled within the meaning of Annex IIa to Regulation (EEC) 
No  1408/71  (the  decision  in  Case  C-358/02  Haddad,  dated  27  April 
2004,  not  yet  published),  although  it  was  then  removed  from  the 
annex under Regulation (EC) No 647/2005 (OJ L 117, 4.5.2005, p. 1). 
Was the removal of this benefit perhaps completely unnecessary?

903

)  The benefits could perhaps instead share the general characteristics 
of Luxembourg’s maternity allowance, which led to this Luxembourg 
benefit  having  to  be  removed  from  Annex  IIa  to  Regulation  (EEC) 
No  1408/71  in  the  wake  of  Case  C-43/99  Leclere  and  Deaconescu 
[2001]  ECR  I-4265.  It  would,  of  course,  be  possible  to  argue  that, 
for  this  Luxembourg  benefit  too,  there  were  no  other  coordination 
methods available either as a special non-contributory benefit or as a 
maternity benefit, but the judgment does seem to generally assume 
a  victory  for  the  export  obligation  pursuant  to  Article  42  of  the  EC 
Treaty  for  general  benefits,  which  is  to  say  all  benefits  available  on 
a uniform basis. Furthermore, the CJ has already found that Austria’s 
care allowance did not have the character of a special benefit within 
the meaning of Annex IIa to Regulation (EEC) No 1408/71 in the Jauch 
case. It can be assumed from this that only ‘genuine’ special benefits 
pursuant to these principles can be generally excluded from export.

(

901

)  See, for example, Case C-43/99 Leclere and Deaconescu [2001] ECR 

(

904

)  As we have already seen, this could be unique and not found in other 

I-4265, or Case C-160/02 Skalka [2004] ECR I-5613.

areas of benefits to this extent.

202

Bernhard Spiegel

sickness  benefits (908).  Looked  at  in  that  way,  there 
would be something to be said for such a solution.

It also needs to be pointed out that there can hardly 
be a Member State that has absolutely no benefits, 
of  whatever  kind,  for  those  in  need  of  long-term 
care.  A  number  of  states,  however,  regard  such 
systems not as part of social security but as part of 
social assistance, which is excluded from the scope 
of  Regulation  (EEC)  No  1408/71.  Coordination  can 
therefore  only  be  comprehensive  if  all  Member 
States  also  include  those  care  benefits  that  they 
regard  as  social  assistance.  I  imagine  that  the  ini-
tially eye-catching inequalities between individual 
Member States would then be significantly reduced. 
This is certainly a point that should be given further 
consideration (909).

2.  Differential supplements

For any solution with just one competent Member 
State,  however,  there  is  always  the  uncertainty  of 
how the CJ will deal with the issue if the said solu-
tion  means  that  access  to  higher  entitlements  in 
one  of  the  Member  States  is  denied.  If  we  follow 
the current coordination, according to which only 
the  competent  Member  State  has  to  export  care 
benefits in cash, this could be the case if the state 
of residence in question provides all residents with 
higher benefits in cash than the competent state. 
Could that coordination exclude such entitlements 
that  are  available  to  all  residents?  In  the  case  of 
family benefits, this situation is avoided by means 
of always guaranteeing at least this higher benefit 
amount by means of a differential supplement (910). 
I  believe  that  this  arrangement  could  also  be 

908(

)  For these, too, the scope and the cost level of the benefits in kind to 
be  reimbursed  by  the  competent  Member  State  are  dependent  on 
the situation in the state of residence or stay.

909(

)  The  partial 

inclusion  of  social  assistance 

in  the  coordination 
regulations  is  not  new.  Already,  social  assistance  entitlements  are 
covered  in  the  recovery  of  benefits  not  due  under  Article  111(3)  or 
Regulation (EEC) No 574/72.

part of the state in question to provide benefits (905). 
Thus,  where  an  Austrian  single  pensioner  lived  in 
Germany,  Austria  would  not  have  to  export  Aus-
trian care allowances but would have to reimburse 
all the relevant German care benefits, regardless of 
whether  they  were  benefits  in  kind,  combination 
benefits or simply German care allowances.

For me, the advantages of this solution are immedi-
ately apparent. Those in need of care would always 
receive the full package of care benefits provided by 
the state of residence; this means that there would 
be  no  difference  in  treatment  compared  with  the 
local population (906) and it would make it possible 
to best take account of the relevant social environ-
ment in the state of residence.

The flaws in this solution are also clear, however. For 
one  thing,  Member  States  that  do  not  themselves 
have a system for providing care would still have to 
reimburse the state of residence for providing such 
benefits (907).  On  the  other  hand,  competent  states 
that  do  themselves  have  a  system  for  providing 
care would be freed from any obligation to provide 
benefits  where  the  relevant  state  of  residence  did 
not  provide  such  benefits.  It  must  be  said,  how-
ever,  that  this  would  not  be  a  new  phenomenon, 
but  rather  a  natural  effect  of  the  coordination  of 

905

)  Under CJ case-law and the system pursuant to Annex IIa, a restriction 
to  residents  without  costs  being  paid  by  the  competent  Member 
State seems to be limited to special non-contributory benefits.

906

)  This  would  make  it  possible  to  avoid  extending  the  application  of 
the CJ judgment in Case C-352/06 Bosmann [2008] ECR I-3827 to the 
sphere of care benefits. I believe it would be no more than consistent 
if the principle derived from the said judgment that, where another 
Member State is competent pursuant to Title II of Regulation (EEC) No 
1408/71 (legislation applicable), entitlements for all residents of the 
state of residence in question do not need to be abolished, were to 
be extended to also cover care benefits for all residents. However, the 
full scope of this principle cannot yet be conclusively sounded out. In 
its report on ‘New forms of mobility’ (http://www.tress-network.org), 
the Tress Think Tank considers, amongst others, the idea of whether 
this ‘Bosmann  principle’  could  be  generally  applied  to  all  kinds  of 
competence  on  the  part  of  a  Member  State,  so  that  a  subsidiary 
competence  could  also  be  incumbent  upon  a  state  in  which  the 
person in question did not live but could derive entitlements through 
other points of contact.

(

(

(

907

)  The same effect would also hit Member States that do have a system 
for  providing  care  but  that  would  be  faced  with  sums  to  pay  that, 
as a result of the contrast between their own very low cost of living 
and the very high care allowances that would result from a person in 
need of care residing in a Member State with a very high cost of living, 
would be a number of times higher than their own benefits.

910(

)  This  is  laid  down  quite  clearly  by  Article  68  of  Regulation  (EC) 
No  883/2004.  I  work  on  the  basis,  however,  that  this  is  already  the 
case today (even if, pursuant to Regulation (EEC) No 1408/71, only the 
legal provisions of a single Member State apply within a family, which 
Member State is not the state of residence), when the judgment in Case 
C-352/06 Bosmann [2008] ECR I-3827 is taken to its logical conclusion.

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Past – Present – Future

explicitly  applied  to  care  benefits  in  order  to  pre-
vent future judgments to the contrary by the CJ.

Following  this  logic,  it  would  also  be  possible  to 
provide  for  an  obligation  on  the  part  of  the  com-
petent state to pay a differential supplement where 
there was a general fixing of the state of residence 
as  the  competent  state,  as  proposed  in  the  previ-
ous  point,  in  order  to  prevent  excessively  large 
disadvantages  for  the  people  in  question  in  rela-
tion  to  benefits  in  cash.  Thus,  where  an  Austrian 
single pensioner lived in Germany, it would initially 
be Germany, under the proposed new model, that 
would have to provide care benefits in kind, in cash 
and in combination, while Austria would then have 
to reimburse the costs. If, however, the amount due 
under  Austrian  care  allowance  were  higher  than 
the (total) value of the German benefits, Austria, as 
the competent state, would still have to pay a cor-
responding differential supplement. Although this 
would be complicated from an administrative point 
of  view,  it  would  certainly  withstand  examination 
by  the  CJ  as  the  higher  benefit  amount  in  either 
Member  State  would  always  be  guaranteed.  This 
solution, too, is not new. It is already in place in the 
coordination of family benefits (911).

3.  Adjustment to purchasing power in the 

state of residence

Another  possibility  would,  of  course,  be  to  leave 
the  unrestricted  export  of  care  benefits  in  cash  as 
the  rule  of  thumb  of  coordination  but  to  adjust 
the  amount  to  the  purchasing  power  in  the  state 
of  residence  in  question. Thus,  if  a  care  allowance 
amounting to EUR 100 under the legal provisions of 
the competent Member State is exported to anoth-
er Member State in which living costs only amount 
to  75  %  of  those  of  the  competent  state,  it  would 
be  possible  to  pay  out  the  care  allowance  only  in 

(

911

)  These  rules  could  also  serve  as  a  basis  for  laying  down  the 
supplementary  details  that  would  clearly  be  necessary,  such  as,  for 
example,  when  the  differential  supplements  are  to  be  assessed, 
how frequently they are to be paid and so on. (With regard to family 
benefits, see Administrative Commission Decision No 147, OJ L 235, 
23.8.1991, p. 21, and No 150, OJ C 229, 25.8.1993, p. 4.)

the amount of EUR 75. This solution, however, could 
be  an  expensive  one  for  many  Member  States,  as 
such an adjustment would, of course, have to take 
place in both directions. Thus, if the care allowance 
was exported to a Member State with higher living 
costs  than  the  competent  Member  State  —  let  us 
say they were 150 % of the living costs in the com-
petent state — that state would have to increase its 
care allowance to EUR 150 (912).

Of course, it needs to be asked, first of all, whether 
a solution of this nature would in any way accord 
with  the  principles  of  the  EC Treaty. This  solution 
could immediately be countered by the argument 
that Regulation (EEC) No 1408/71 previously pro-
vided  a  similar  situation.  A  special  arrangement 
for family benefits for France was initially allowed, 
whereby  it  only  had  to  pay  the  costs  of  benefits 
under  the  legislation  of  the  Member  States  in 
which  the  children  live (913),  even  though  all  the 
other Member States had to export the full amount 
of their benefits. The CJ found this special arrange-
ment  for  France  to  be  in  contravention  of  the 
principles  of  the  EC Treaty (914),  which  meant  that 
France had to apply the coordination that applied 
to  all  other  Member  States,  including  the  export 
of the unreduced level of family benefits. I am not 
entirely sure whether it was really the restriction of 
export that troubled the CJ most in this legal situ-
ation  or  whether  it  was  not  really  the  difference 
in coordination between France and all the other 
Member States (915). Particular attention should be 
given to the closing remarks of Advocate General 
Kokott  in  the  Hosse  case (916)  in  which  she  made 

(

912

)  At  first  sight  this  certainly  seems  unacceptable.  However,  we 
must not forget that this is exactly what happens in relation to the 
reimbursement of costs for sickness benefits in kind — the costs for 
the competent Member State are based on the level of costs in the 
Member State in which the benefits are granted.

(

913

)  Article 73(3) of Regulation (EEC) No 1408/71 in the version applicable 

at the time.

(

914
) 

Judgment in Case C-41/84 Pinna I [1986] ECR 1.

(

(

915

)  The CJ stated in a very easy-to-follow way that coordination on the 
basis of the differing social systems of the Member States is already 
very complicated, so that Community legislators must not add further 
differences (para. 21 of the judgment).

916

)  Closing remarks in Case C-286/03 Hosse [2006] ECR I-1771, para. 109, 
albeit  for  application  to  Regulation  (EC)  No  1612/68  rather  than  to 
Regulation (EEC) No 1408/71.

204

Bernhard Spiegel

reference to the possibility of indexing care allow-
ances  in  the  event  of  export  in  order  to  rule  out 
undesirable socio-political effects.

is  certainly  room  for  discussion  about 
There 
whether indexing of this nature would be possible 
at  all  under  the  strict  principles  of  the  EC Treaty. 
Personally, I think that this would be the least real-
istic  solution  for  a  new  coordination  of  care  ben-
efits. Above all, it would, of course, only represent 
a solution for care benefits in cash. They would not 
be capable of remedying the problems that result 
from the interaction of the various benefits in cash 
and in kind. 

III.  PenSIon SySTemS under 

The SeCond and ThIrd 
PIllarS

Having  looked  into  a  new  category  of  benefits  in 
the  previous  point,  where  European  legislators 
have not yet succeeded in providing new coordina-
tion adapted to these benefits, I would now like to 
turn to benefits for which it has already proved pos-
sible to put a new organisation in place.

a.  Background

In  the  past,  the  situation  relating  to  pensions 
was  at  least  relatively  clear  cut.  Regulation  (EEC) 
No  1408/71  covered  all  statutory  systems,  which 
belonged  almost  exclusively  to  what  is  known  as 
the  ‘first  pillar’ (917),  meaning  that  they  provided  a 
basic  provision  either  for  all  residents  or  only  for 
the  working  population.  Alongside  these,  systems 
developed at varying intensities — and depending 
on  the  socio-political  situations  in  the  individual 

917(

)  There  are  no  legally  binding  definitions  of  pension  systems  under 
the  first,  second  or  third  pillars.  It  is,  however,  customary,  to  regard 
public  systems  as  belonging  under  the  first  pillar,  works  systems  as 
belonging under the second pillar and private systems as  belonging 
under the third pillar (for more on this interpretation in the context of 
the first Austrian pensions strategy report see M. Pöltl, B. Spiegel and H. 
Stefanits ‘Österreichischer  Rentenstrategiebericht  —  die  europäische 
Dimension der österreichischen Pensionsdiskussion’ [Austrian pensions 
strategy  report  —  The  European  dimension  in  Austria’s  pensions 
debate], Soziale Sicherheit (Austria) 2/2003, p. 56 et seq. 72.

Member  States  —  under  the ‘second  pillar’,  which 
are mostly known as works pension schemes, and 
under  the ‘third  pillar’,  in  which  it  is  left  up  to  the 
private initiative of the individual to fill the gap in 
their  pension  protection,  this  category  generally 
being understood to include private insurance sys-
tems in which the state, possibly through the likes of 
tax incentives, still takes a leading role. The systems 
under the second and third pillars were not gener-
ally based on ‘legislation’, meaning that Regulation 
(EEC) No 1408/71 did not apply (918). It is interesting, 
of course, to look in more detail at which EC legal 
arrangements  apply  to  systems  which  are  located 
outside the scope of coordination under Regulation 
(EEC)  No  1408/71,  above  all  if  the  people  in  ques-
tion have made use of the freedom of movement. I 
want to restrict myself here, however, to the impact 
of Regulation (EEC) No 1408/71 (919).

The  provisions  on  assessment  under  Regulation 
(EEC)  No  1408/71  for  a  pension  covered  by  the 
regulation  can  be  simply  summarised  as  follows: 
every  Member  State  under  whose 
legislation 
periods  of  insurance  have  been  completed  first 
checks  whether  there  is  an  entitlement,  drawing 
on  the  periods  in  all  Member  States  (whether,  in 
other words, where necessary any qualifying peri-
ods provided under the national legislation could 
be  fulfilled  by  all  the  periods) (920). The  pension  is 
then  calculated  using  a  two-stage  process.  First-
ly,  the  calculation  is  made  for  the  amount  of  the 
theoretical  pension  to  which  there  would  be  an 
entitlement  if  all  the  periods  of  insurance  in  the 
Member  State  in  question  had  been  completed. 
This  amount  is  then  divided  in  proportion  to  the 

918(

)  With  regard  to  the  definition  of  legislation,  see  Article  1(j)  of 
Regulation (EEC) No 1408/71, which lays down explicitly that industrial 
agreements  (and  often  works  pensions  schemes)  are  not  covered, 
even  if  they  are  later  the  subject  of  a  decision  by  the  authorities 
rendering  them  compulsory,  unless  the  Member  State  in  question 
opts to apply Regulation (EEC) No 1408/71 through a declaration to 
that effect, something that has very rarely happened thus far.

919(

)  On  the  subject  of  change  in  European  social  security  systems,  with 
the focus on the privatisation of risks and the consequences this may 
have on coordination in the light of Regulation (EEC) No 1408/71, but 
also on the other impacts of EC law of a privatisation of that nature 
see ‘Meeting the challenge of change’ published by the Dutch Sociale 
Verzekeringsbank  (SVB)  as  a  summary  of  the  contributions  at  the 
conference of 30 and 31 October 1997 at Noordwijk aan Zee.

920(

)  Article 45 of Regulation (EEC) No 1408/71.

205

50 years of Social Security Coordination 

Past – Present – Future

appropriate fractions of the sum of the periods of 
insurance completed in all the Member States (the 
pro-rata calculation method) (921).

This method of calculation fits best where classical 
levy-funded (922)  systems  under  the  first  pillar  are 
being  dealt  with.  Let  us  illustrate  with  an  exam-
ple (923):  under  the  legislation  of  Member  State  A, 
an entitlement to a pension exists after 15 years of 
insurance. The  pension  due  is  based  on  the  aver-
age  income  over  the  preceding  10  years.  A  basic 
rate of 30  % of this average is due for the first 10 
years, with 2 % per year due for subsequent years. 
If  a  migrant  worker  has  worked  for  10  years  in 
Member State A and then continued employment 
for a further 30 years in Member State B, these 40 
years  will,  first  of  all,  of  course  be  sufficient  for  a 
pension  entitlement  in  Member  State  A. The  cal-
culation  is  made  as  follows:  the  theoretical  sum 
for  40  years  is  30  %  +  30  x  2  %  =  90  %;  only  the 
amount  reduced  according  to  the  period  ratio  of 
10/40 applies, however, namely 22.5 %.

b. 

Inclusion of capital-funded systems or 
pension account systems in Regulation 
(EEC) No 1408/71

The  example  worked  through  above  shows  that 
the  pro-rata  calculation  method  leads  to  fair  and 
socio-politically  desirable  results  in  the  case  of 
levy-funded  systems.  Assuming  identical  systems 
in all the Member States in question, this calcula-
tion leads to the total sum that would have been 
earned  if  the  careers  had  been  completed  in  a 
single Member State (924) — this test (‘what would 
have  happened  if  the  migrant  workers  of  the 
Member  State  in  question  had  never  left?’)  is  the 
CJ’s  classic  method  of  detecting  the  prohibited 

(

921

)  Article 46 of Regulation (EEC) No 1408/71.

(

922
) 

In funding by levy there is no direct link between the contributions 
paid by a person in the past and the future pension. Instead, current 
contributions’  revenue  is  immediately  allocated  to  those  already 
drawing pensions and serves to pay for those pensions.

(

923
) 

I am using a fictional pension calculation system to clarify the method 
of calculation.

(

924

)  Where identical calculation bases must also be assumed, which would 

never be the case in practice.

disadvantaging  of  migrant  workers (925).  What  is 
more, this method also leads to a fair distribution 
of the burdens between the Member States accord-
ing to the contributions paid. Under this method 
of calculation, it is usually irrelevant to the Mem-
ber State in question whether the insurance career 
was completed early on or later in life (926).

There  has,  however,  also  been  a  development  in 
pension systems. The classical distinction between 
levy-funded  systems  under  the  first  pillar  covered 
by  Regulation  (EEC)  No  1408/71  and  capital-fund-
ed (927)  or  pension  account  systems (928)  under  the 
second and third pillars that fall outside the scope 
of Regulation (EEC) No 1408/71 has become increas-
ingly blurred. For one thing, more and more Mem-
ber  States  introduced  systems  under  the  second 
pillar on a statutory basis, which therefore inevita-
bly  found  themselves  within  the  scope  of  Regula-
tion (EEC) No 1408/71. This is the case, above all, for 
states in which there is a statutory system, in addi-
tion to a basic provision providing flat-rate benefits, 
to  mirror  the  working  income  level  in  retirement. 
Examples of this that might be mentioned include 
the systems in most Scandinavian countries and also 
that in Switzerland (929). Other states converted their 
systems under the first pillar into pension account 
systems  or  even  into  capital-funded  systems  in 
order to get future developments, and in particular 

(

(

(

925

)  On  this  philosophy  see,  for  example,  Case  C-1/67  Ciechelski  [1967] 

ECR 235, or Case C-24/75 Petroni [1975] ECR 1149. 

926

)  The valorisation of older contributions in levy-funded systems does 
not have a negative impact in such cases either as foreign periods are 
in any case not drawn upon in determining the basis of calculation — 
cf., for example, Article 47 of Regulation (EEC) No 1408/71.

927

)  The  term  capital-funded  system  is  usually  used  to  refer  to  systems 
that  capitalise  the  contributions  paid  in  (i.e.  they  earn  interest  on 
them on the capital market) and then pay out the pension according 
to the capital available (where the remaining life expectancy of the 
persons  in  question  is  usually  factored  in  according  to  so-called 
‘mortality tables’). Under these pension schemes — operated on the 
model of life insurance — on average, more is never paid out in terms 
of pensions than was actually saved as capital. 

928

(

)  Pension account schemes are a newer appearance that, while the 
pension scheme is still based on the levy method (in other words 
the  contributions  received  are  used  immediately  to  pay  current 
pensions),  act  like  a  capital-funded  scheme  in  the  calculation  of 
the  benefit  paid  out.  In  other  words,  the  progress  of  the  capital 
market and life expectancy both have an impact on the individual 
benefit entitlement. 

(

929

)  This  categorisation  should,  of  course,  only  be  regarded  as  a  rough 
approach;  everyone  needs  to  be  aware  that  there  are  always  very 
many  intermediate  stages  and  borderline  cases  as  the  systems  are 
very diverse.

206

Bernhard Spiegel

costs, better under control. Examples of such pen-
sion account systems can be found in a number of 
the  new  Member  States,  but  also  in  Germany  and 
Austria. Because these systems are based on ‘legis-
lation’ (930),  they  inevitably  fall  within  the  objective 
scope of Regulation (EEC) No 1408/71.

However,  Regulation  (EEC)  No  1408/71  does  not 
contain  any  special  rules  for  capital-funded  sys-
tems  or  pension  account  systems.  We  therefore 
need  to  look  into  the  effects  of  the  regulation  in 
greater detail.

C.  Problems in the application of the pro-

rata calculation method

The consistent application of the pro-rata method 
of calculation could give rise to the most problems 
for this type of benefit (931). In such calculations — as 
referred to earlier — the person in question should 
always be in the position they would have been in if 
they had completed their entire career in the Mem-
ber  State  in  question.  For  capital-funded  systems 
and pension account systems, however, the critical 
factor is always when the contributions were paid. 
Contributions paid early in life have a much higher 
value  (due  to  interest  and  compound  interest  on 
the  capital)  within  the  subsequent  pension  than 
the same contributions paid in later on. The follow-
ing specific example will demonstrate this.

This  example  has,  once  again,  been  chosen  to  be 
relatively simple (932). Let us say that a person has a 
constant annual contribution income of EUR 1 000. 
If we then assume an average annual interest rate 

of  6  % (933),  over  a  career  beginning  in  1970  and 
going on until 2009 (40 years), the result would be 
EUR 164 948.78 (934), due to interest and compound 
interest  on  the  capital.  Since  the  benefits  (the 
monthly pensions) are always based on the capital 
saved this means that, even in the calculation pur-
suant to Regulation (EEC) No 1408/71, this is what it 
comes down to rather than the automatically gen-
erated monthly sums.

If, therefore, our test case has completed 10 years in 
the state in question with a capital-funded system, 
as  well  as  30  years  in  another  Member  State,  the 
classical pro-rata calculation method requires that 
the  monthly  benefit  be  calculated  on  the  basis  of 
10/40, i.e. EUR 41 237.20, of the capital theoretically 
saved for 40 years. According to the basic philoso-
phy  of  any  capital-funded  system,  however,  pay-
ments can only be made on the basis of what saved 
capital (at least on average (935)) is actually available. 
What is actually available from the 10 years of mem-
bership of the system is actually critically depend-
ent on the timing of when the contributions were 
paid. So, if these 10 years were at the beginning of 
the career, thus from 1970 to 1979, the total avail-
able  is  EUR  80 246.03,  which  is  almost  twice  as 
much capital as is actually to be granted as a ben-
efit. If, however, those 10 years came at the end of 
the career, thus between 2000 and 2009, then only 
EUR  12 655.86  is  available  (given  the  much  lower 
amounts  of  interest),  which  is  approximately  only 
one  third  of  the  amount  that  would  have  to  form 
the basis under the pro-rata method of benefit cal-
culation. I hope that this relatively simple example 
makes  clear  that  the  pro-rata  calculation  method 

(

(

(

930

)  Article 1(j) of Regulation (EEC) No 1408/71.

931

)  Various  Member  States  have  repeatedly  argued  that  the  pro-rata 
method of calculation cannot be applied to capital-funded systems 
or pension account systems and that there are therefore no problems 
resulting from this method of calculation. This is not a valid argument 
in  my  view  as,  in  the  absence  of  an  exception  under  Regulation 
(EEC)  No  1408/71,  the  general  principles  are  always  applicable  in 
accordance with the existing case-law of the CJ (see my comments 
on care benefits).

932

)  The example was taken from Austria’s memorandum of 14 May 2003 
to the Administrative Commission (CA.SS.TM. 156/03), which argued 
for an amendment of Regulation (EEC) No 1408/71 or Regulation (EC) 
No 883/2004 in order to take account of the particularities of capital-
funded schemes or pension account schemes.

933(

)  This  rate  could  be  seen  as  unrealistic  given  current  worldwide 
economic trends. However, in 2003 it was, in fact, a cautious forecast 
and it may turn out to be quite realistic over the longer term.

934(

)  This calculation is based on the formula Kn = Ko x (1 + p/100)n, where 
‘Ko’ represents the starting capital, ‘p’ represents the interest rate and 
‘n’ represents the period of interest in years.

935(

)  This,  taking  into  account  the  average  in  capital-funded  systems,  is 
based  on  the  consideration  that,  for  the  same  contributions,  one 
insured party will live longer, while another will not live as long; using 
the average makes it possible to ensure that the pay-outs made do 
not exceed the total capital actually available over all cases. When a 
parameter (most importantly the interest rate or the life expectancy 
at  the  fixed  pension  age)  changes,  the  benefit  must  be  adjusted 
accordingly.

207

50 years of Social Security Coordination 

Past – Present – Future

cannot be used for capital-funded systems or pen-
sion account systems.

It is, of course, the case that, even under Regulation 
(EEC) No 1408/71, the pro-rata calculation will not 
always be used. Thus, when there is a single entitle-
ment (i.e. when there is no need to add periods of 
insurance together to form the basis of the entitle-
ment (936))  the  solely  nationally  calculated  benefit 
amount  can  also  be  paid (937). The  precondition  for 
this, however, is that the pro-rata calculation cannot 
lead to a higher benefit amount — yet we proved 
exactly  the  opposite  in  the  preceding  paragraph, 
with  the  result  that  the  option  of  abandoning  the 
pro-rata calculation is unusable.

d.  Solution in Regulation (EC) 

No 883/2004

Following  constant  pressure  from  a  few  Member 
States,  the  Community  has  reached  the  decision 
that  new  separate  coordination  was  necessary  for 
these  special  benefit  systems (938).  For  that  reason, 
supplementary  rules  relating  to  capital-funded 
systems  and  pension  account  systems  are  being 
added  to  Regulation  (EC)  No  883/2004  in  the  first 
amendment  of  the  regulation (939).  It  is  being  clari-

(

936
) 

In a number of the new capital-funded schemes or pension account 
schemes there are no ‘qualification periods’ and benefit entitlements 
accrue after very short periods of membership of the scheme. There 
are also schemes, however, that still have long qualification periods 
(such as Austria’s pension account scheme, which requires 15 years 
of system membership); for that reason there are also cases in such 
schemes  where  it  is  necessary  to  add  periods  together  in  order  to 
trigger a benefit entitlement.

(

(

(

937

)  Article 46(1)(b) of Regulation (EEC) No 1408/71.

938

)  Prior  to  that,  there  had  only  been  selective  solutions  for  a  few 
individual Member States in Annex VI of Regulation (EEC) No 1408/71, 
such as I. France point 5, S. Austria point 8 (concerning the pension 
systems  of  the  liberal  professions)  and  point  10  (concerning  the 
pension account under the General Pensions Act (APG)) or AA. United 
Kingdom point 13.

939

)  The  necessary  opinion-forming  process  could  only  be  concluded 
after  Regulation  (EC)  No  883/2004  had  been  drawn  up.  The  first 
amendment  of  Regulation  (EC)  No  883/2004  is  being  published 
along  with  the  new  implementing  regulation,  and  it  will  not  only 
contain the missing annexes to Regulation (EC) No 883/2004 (in OJ 
L  200,  7.6.2004,  p.  1,  Annexes  II,  X  and  XI  of  the  regulation  and  the 
entries for the new Member States are missing), but also clarifications 
in the regulation itself, which have proved themselves necessary, in 
particular,  in  working  on  the  annexes  and  the  new  implementing 
regulation. This  package  is  currently  in  the  final  phase  of  decision-
making by the Council and Parliament, where there will now be no 
changes in the special arrangements under pension law that I have 
described as there is already agreement with the European Parliament 
on these issues.

fied, first of all, that, in systems where time periods 
play no role in the calculation, the national benefit 
amount  can  always  be  paid  out  (so  there  will  no 
longer  be  a  comparison  with  a  hypothetical  pro-
rata  benefit) (940).  This  arrangement  will  therefore 
apply where there is no need to add insurance peri-
ods  together  for  an  entitlement. When  it  is  neces-
sary  to  add  periods  together,  however,  it  will  also 
be possible to derive the amount available nation-
ally  in  the  benefit  calculation  from  such  systems 
(meaning  no  pro-rata  calculation  here,  either).  In 
order for the affected Member States to be able to 
make  use  of  this  option,  however,  it  is  necessary 
to  register  in  a  special  annex (941),  which  a  number 
of Member States have done. If, then, the Member 
State in question in our example has registered in 
this annex (942), it will immediately become possible 
for either EUR 80 246.03 or EUR 12 655.86 (depend-
ing on the timing of when the contributions were 
made) to be used for the pension calculation.

Additionally, however, provision was also made for 
states that were not eligible for inclusion in the said 
annex  whereby,  in  the  pro-rata  calculation  in  sys-
tems that take account, in their calculation, of ‘other 
factors  not  connected  to  periods’,  foreign  periods 
were  always  to  be  taken  to  be  the  average  of  the 
appropriate  basis  of  calculation  per  month (943). 
If  we  apply  this  arrangement  to  our  example,  the 
Member State in question would, when it comes to 
the foreign periods, use either EUR 80 246.03 divid-
ed by 120 or EUR 12 655.86 divided by 120 for each 
foreign  month  in  the  pro-rata  calculation,  which 
would result, for the 480 insured months (40 years) 

(

(

(

940

)  Article 52(5) of Regulation (EC) No 883/2004 in the version of the first 

amending regulation.

941

)  Annex VIII, Part II, of Regulation (EC) No 883/2004 in the version of the 

first amending regulation.

942

)  A  system  that  functions  on  a  purely  capital-funded  basis  that  pays 
interest  on  the  capital  in  accordance  with  compound  interest  is 
certainly  a  system  in  which  the  periods  are  unimportant  when 
calculating  the  amount  of  benefits.  However,  the  other  Member 
States rejected a system of this nature where, in the case of invalidity 
benefits, for example, apportionment periods were also to have the 
effect of increasing the benefit in the calculation, as these are periods, 
after all. For such systems the only remaining option is thus listing in 
Annex VIII, Part I, as the autonomous benefit is generally higher than 
that calculated using the pro-rata method.

(

943

)  Article 56(1)(d) of Regulation (EC) No 883/2004 in the version of the 

first amending regulation.

208

in  the  two  Member  States,  in  a  theoretical  sum  of 
either EUR 320 984.12 or EUR 50 623.44, which then, 
on reduction in proportion to the period (120/480), 
exactly mirrors the national starting basis again (944). 
This  means  that,  even  in  cases  where  the  periods 
spent  in  multiple  Member  States  have  to  be  add-
ed  together,  the  sum  to  be  awarded  corresponds 
exactly to the capital actually available.

Community legislators have thus responded to the 
new  benefit  systems  in  the  field  of  pensions  and 
come  up  with  reasonable  and  practicable  calcula-
tion  rules  for  capital-funded  systems  and  pension 
account  systems.  It  is  also  worth  noting  that  this 
new arrangement was effected entirely without any 
preceding judgments by the CJ (945). Can this change 
in the law thus perhaps be cited as the best practice 
model at the European level? 

Iv.  ChIld-rearIng beneFITS

Any discussion of new categories of benefits would 
be incomplete if it failed to cover child-rearing ben-
efits, which have emerged as a separate category of 
benefits in many Member States for the parent who 
actually  devote  themselves  to  raising  a  child (946). 
Dealing with this category of benefits comprehen-
sively, too, would require its own paper (947). In what 

(

944

)  Until  now  Article  47  of  Regulation  (EEC)  No  1408/71  on  the  basis 
of  calculation  for  pensions  has  not  provided  any  appropriate 
arrangement 
for  capital-funded  systems  or  pension  account 
systems.

(

945
) 

If we disregard Case C-205/05 Nemec [2006] ECR I-10745, in which the 
CJ found that foreign income certainly should be included alongside 
domestic income in the calculation of a benefit. The new arrangement 
described will have no impact on this issue, however.

(

(

946

)  See also the references in the introduction.

947

)  On  the  problems  of  coordinating  child-rearing  allowances, 

in 
particular  in  relation  to  the  special  situation  of  parents  who  take  a 
break from their professional activities in order to raise their child(ren), 
see also ‘Die Koordinierung von Familienleistungen — Praktische und 
rechtliche Fragen der Anwendung der VO 1408/71’ [The coordination 
of  family  benefits  —  Practical  and  legal  issues  in  the  application 
of  Regulation  (EEC)  No  1408/71]  in  Freizügigkeit  und  Soziale 
Sicherheit  [Freedom  of  movement  and  social  security],  published 
by  B.  Schulte  and  K.  Barwig,  Baden-Baden,  Nomos,  1998,  p.  210  et 
seq., or E. Eichenhofer, ‘Deutsches Erziehungsgeld und Europäisches 
Sozialrecht’  [German  child-rearing  allowance  and  European  social 
law], Sozialgerichtsbarkeit [German periodical] 10/97, p. 449 et seq. 
On  the  problems  from  an  Austrian  viewpoint,  see  S.  Holzmann-
für  EG-Wanderarbeitnehmer’ 
Windhofer, 
[Child-rearing allowances for EC migrant workers], Soziale Sicherheit 
[Austrian periodical] 1/2008, 26.

‘Kinderbetreuungsgeld 

Bernhard Spiegel

follows I will only pick out a few aspects so as not to 
completely neglect these benefits.

a.  Background

It can be assumed that child-rearing benefits, what-
ever they are known as under national legislation, 
and  wherever  they  are  based  within  the  national 
systems,  are  to  be  regarded  as  family  benefits  for 
the purposes of the application of Regulation (EEC) 
No 1408/71 (948). This means that coordination, as is 
envisaged for family benefits, also applies in full to 
these benefits (949).

b. 

Impact of the general coordination 
of family benefits on child-rearing 
benefits

First  of  all,  I  would  like  to  remind  you  of  the  gen-
eral  principles  of  coordination  for  family  benefits. 
The  place  of  residence  of  the  child  is  immaterial, 
so that a Member State that is competent for a par-
ent on the basis of the applicable legislation must 
also grant family benefits even if the children reside 
outside that state (950). Both parents may give rise to 
entitlements. If, as a result of this, the two parents 
are  subject  to  the  legislation  of  different  Member 
States,  there  will  be  competing  entitlements.  It  is 
determined  by  means  of  priority  rules (951)  which 
Member State is primarily competent and therefore 
has  to  issue  the  full  amount  due  according  to  its 
legislation,  and  which  Member  State  has  second-
ary competence and thus only has to pay a differ-
ential supplement if the entitlements in that state 
are  higher  than  those  in  the  state  with  primary 

948(

)  The CJ has made this clear in a series of judgments on a very wide range 
of  benefits  —  see,  for  example,  the  judgments  for  Cases  C-245/94 
Hoever and Zachow [1996] ECR I-4895, C-85/96 Martinez Sala [1998] 
ECR  I-2691,  C-275/96  Kuusijärvi  [1998]  ECR  I-3419,  C-153/03  Weide 
[2005] ECR I-6017, and C-543/03 Dodl and Oberholenzer [2005] ECR 
I-5049.

949(

)  Title III, Chapter 8, of Regulation (EC) No 883/2004. For family benefits 
I would first like to describe the arrangements under Regulation (EC) 
No  883/2004,  as  these  are  considerably  clearer  than  those  under 
Regulation (EEC) No 1408/71, though the principles of coordination 
remained  largely  unchanged  with  regard  to  benefits  for  those  in 
gainful employment.

950(

)  Article 67 of Regulation (EC) No 883/2004.

951(

)  Article 68 of Regulation (EC) No 883/2004.

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50 years of Social Security Coordination 

Past – Present – Future

competence. The state with primary competence is 
the  one  in  which  an  occupation  is  pursued,  but  if 
both parents pursue an occupation, then, in princi-
ple, it is the state of residence of the children that is 
primarily competent.

For  subsequent  considerations,  let  us  use  the  fol-
lowing example as a basis. A family lives in Member 
State  A,  where  the  father  also  works.  The  mother 
crosses the border to work in Member State B; she 
took parental leave under the labour law provisions 
of  that  state  (Member  State  B)  in  order  to  attend 
to  the  raising  of  her  12-month-old  daughter  (the 
working  relationship  with  the  employer  in  Mem-
ber State B remains intact) (952). First of all, we must 
describe the principles of coordination for ‘ordinary’ 
family  allowances  in  order  to  better  understand 
the  impact  on  child-rearing  benefits.  If  the  family 
allowance amounts to EUR 100 in Member State A 
and EUR 120 in Member State B, under this state of 
affairs,  Member  State  A,  as  the  state  of  residence, 
must pay its family allowance of EUR 100 in full as 
the state with primary competence, while Member 
State B has to top up this amount with a differential 
supplement of EUR 20.

C.  Open issues awaiting future regulation

As I have said already, the same coordination must 
also apply to child-rearing benefits. Let us assume 
then,  that  Member  State  A  has  a  flat-rate  child-
rearing allowance for all residents in the amount of 
EUR 150, while Member State B has a child-rearing 
allowance  in  the  form  of  an  income-replacement 
benefit  for  the  working  population  only  in  the 
amount of 80 % of the last received income (in our 
example, the mother earned EUR 1 000 per month 
before  giving  birth,  which  means  that,  under 
Member  State  B’s  legislation,  her  child-rearing 
allowance  would  amount  to  EUR  800).  Under  the 

(

952

)  As was stated in Decision No 207 of the Administrative Commission 
of  26  May  2005  (OJ  L  349,  31.12.2005,  p.  27),  for  the  provisions  of 
Regulation  (EEC)  No  1408/71,  in  the  case  of  parental  leave,  the 
continued  pursuing  of  an  occupation  is  to  be  presumed,  insofar  as 
this is viewed as equivalent under national law. It is not yet certain 
whether the same will apply under Regulation (EC) No 883/2004.

coordination of family benefits, first of all Member 
State A would have to pay its child-rearing allow-
ance (EUR 150), while Member State B would then 
have to make up the difference (i.e. EUR 650). From 
this example alone it is clear that the coordination 
for such child-rearing allowances with an income-
replacement  function  is  hard  to  explain  —  those 
affected  very  rarely  understand  why  it  is  not  the 
Member State in which they pursue their occupa-
tion that pays all of the child-rearing allowance. A 
further  complicating  factor  is  that,  according  to 
the interpretation of a few Member States, differ-
ential supplements are only paid out in arrears at 
the end of the year (953).

The  problem  becomes  even  clearer  if  we  switch 
the  two  systems  so  that  state  of  residence  A  pro-
vides  the  family  with  a  child-rearing  allowance 
in  the  form  of  an  income  replacement  at  80  %  of 
last  earned  income  and  Member  State  B  only  has 
a  flat-rate  child-rearing  allowance  of  EUR  150.  In 
this case, Member State A is the state with primary 
competence. Does this state therefore have to pay 
the  EUR  800  worth  of  income-replacement  child-
rearing allowance despite the fact that the mother 
earned  this  income  under  the  application  of  the 
legislation of Member State B (954)? What does Mem-
ber State A pay if its national law does have a child-
rearing allowance that has an income-replacement 
function  for  the  working  population  but  also  has 
a  flat-rate  child-rearing  allowance  for  those  not  in 
employment  of,  say,  EUR  200?  Since  the  mother 
is  not  subject  to  Member  State  A’s  legislation  as  a 
member of the working population (but is instead 
subject to Member State B’s legislation), does that 
mean  that  Member  State  A  can  then  only  award 
the benefit for those not in work (meaning only the 
EUR  200  rather  than  the  income-based  EUR  800)? 

(

(

953

)  This  interpretation  is  based,  amongst  other  things,  on  point  1(e)  of 
Decision  No  147  of  the  Administrative  Commission  of  10  October 
1990 (OJ L 235, 23.8.1991, p. 21) and point 5 of Decision No 150 of the 
Administrative Commission of 26 June 1992 (OJ C 229, 25.8.1993, p. 
5). 

954

)  The  judgments  in  Cases  C-137/04  Rockler  [2006]  ECR  I-1441  and 
C-185/04 Öberg [2006] ECR I-1453 would indicate this, although they 
were not based on Regulation (EEC) No 1408/71 but rather related to 
retired EU officials pursuant to Article 39 of the EC Treaty.

210

Bernhard Spiegel

Yet  another  variant  can  be  foreseen,  of  course. 
Let  us  say  the  father  earns  EUR  2  000  per  month 
in  Member  State  A;  theoretically,  this  income,  too, 
could be used as a basis for the calculation of the 
child-rearing  allowance,  leading  to  an  entitlement 
of  EUR  1  600 (955).  The  question  of  how  exactly  to 
proceed  in  this  set  of  circumstances  has  not  been 
cleared up as yet.

There  is  another  equally  important  problem  here 
though, namely, if we assume that Member State A 
had to pay out the EUR 800 worth of child-rearing 
allowance in our last example, what amount would 
Member State B have to pay as a differential supple-
ment? If the individual benefits are weighed against 
one another (956), Member State A pays out EUR 100 
in  family  allowance  and  EUR  800  in  child-rearing 
allowance, Member State B pays EUR 20 by way of a 
differential supplement for the higher family allow-
ance  but  no  differential  supplement  in  respect  of 
the  child-rearing  allowance,  as  the  child-rearing 
allowance  from  the  Member  State  with  primary 
competence  is  already  EUR  800.  If,  however,  the 
amounts  of  all  the  family  benefits  are  compared, 
then Member State B would not have to pay any dif-
ferential supplement at all, as the total of its family 
benefits (EUR 120 + EUR 150 = EUR 270) is less than 
the benefits due under Member State A’s legislation 
(EUR 100 + EUR 800 = EUR 900) (957).

These  are  just  a  few  of  the  many  questions  that 
arise  in  the  coordination  of  child-rearing  benefits 
pursuant  to  the  rules  for  the  other  general  family 
benefits. Unfortunately it also proved impossible, in 
drawing up the new Regulation (EC) No 883/2004, 

(

955

)  According  to  my  information,  this  could  be  the  solution  that  the 
Swedish administration found in Case C-275/96 Kuusijärvi [1998] ECR 
I-3419.

(

956
) 

It  will  doubtless  always  be  difficult  to  decide  with  certainty  here 
which benefits correspond to one another and which do not.

(

957

)  This  question  of  whether,  for  the  differential  supplements,  all  the 
benefits  should  be  compared  together  (the ‘one-basket  theory’),  or 
whether only the corresponding benefits should be compared (thus, 
in the rough division into ordinary family benefits and child-raising 
benefits, the ‘two-basket theory’), was fiercely debated by the Council 
in drawing up the new implementing regulation to Regulation (EC) 
No 883/2004. It did not prove possible to reach a consensus solution, 
however. The same also applies to the question of whether the entire 
family  should  be  considered  together  or  whether  the  comparison 
calculation should be carried out for each child.

to  find  satisfactory  answers  to  all  these  questions, 
although, from the overriding EC law point of view, 
all routes would be conceivable, in particular when 
it  comes  to  the  question  of  whether  all  benefits 
should be compared together or whether only cor-
responding benefits should be compared (958). Since 
the Member States are not proceeding in a uniform 
manner on these issues, clarifications by the CJ will 
be  the  way  forward,  although  these  will  lead  to 
further  dissatisfaction  on  the  part  of  the  Member 
States. Until there is agreement on these  issues in 
the  Council,  the  ball  will  be  left  in  the  CJ’s  court 
once again. 

v.  Summary

New categories of benefit always represent a chal-
lenge; initially for the Member States, who have to 
choose  the  right  coordination  mechanism  for  the 
said benefits. If the Member States are not guided 
in  making  this  choice,  then  it  must  be  expected 
that no uniform coordination will take place, which 
is  unsatisfactory  both  for  the  people  affected  and 
for the administrations in the Member States. This 
guidance  would  be  given  by  European  legislators, 
making  it  clear  and  unambiguous  which  methods 
of coordination are to be applied to new categories 
of benefit, where it must be possible, in any case in 
the  event  of  problems  with  the  application  of  the 
principles for the existing categories of benefit, to 
create new principles for new categories of benefit. 
It is, of course, also possible for the Administrative 
Commission to take a leading role by declaring, at 
least once, that what is at issue is a new category of 
benefit that is not limited to a single Member State 
and then being able to draw up proposals for solu-
tions. The least recommended route is leaving it up 
to the CJ to decide. This is because the CJ only ever 
has  the  option  of  applying  the  existing  principles 
of  coordination  and  always  has  to  categorise  new 
categories of benefit with the existing benefits that 

958(

)  Ultimately, overall the higher amount would always be guaranteed. 
This rules out, in any case, the possibility of financial disadvantage for 
people taking advantage of mobility.

211

50 years of Social Security Coordination 

Past – Present – Future

they  seem  most  closely  to  resemble,  and  that  can 
depend  on  the  chance  particularities  of  the  ques-
tions  referred  to  the  CJ  in  the  individual  case  in 
question. No one can reproach the CJ for that.

It must be assumed that this problem of coordinat-
ing  new  categories  of  benefit  will  come  up  again 
and  again (959).  How  can  we  attempt  to  learn  from 
past experience in a proactive way? I would suggest 
that the Member States should take more seriously 
their obligation to inform each other of changes to 

their  national  legal  positions  that  could  affect  the 
application of the regulations (960). The other Mem-
ber  States,  and  also  the  Commission,  would  then 
have  to  analyse  such  reports  closely  in  order  to 
recognise the advent of new categories of benefit 
early  and  to  seek  out  the  most  suitable  principles 
of  coordination  together  as  quickly  as  possible.  It 
is not harmonisation of the individual systems that 
should be aimed for but harmonisation of the coor-
dination. Unfortunately, that has happened far too 
little in the past.

(

959

)  Previous experience shows that systems of social protection are the 

fastest-changing areas of law in all the Member States.

(

960

)  Article 76(1)(b) of Regulation (EC) No 883/2004.

212

CROSS-BORdER  hEALThCARE : TOwARdS  
COORdiNATiON  OF T wO PATiENT  mOBiLiT y 
ROuTES

Jean-Claude Fillon

Jean-Claude Fillon
Ministries of Health, Solidarity and Public Accounts  
— Social Security Directorate (961) (France)

Jean-Claude Fillon is Deputy Head of the Community and International Affairs 
Division of the Social Security Directorate (DSS/DACI) of the French Ministries 
dealing  with  Solidarity,  Health  and  Public  Accounts.  In  this  capacity,  he  deals 
continually with Regulation 1408/71 and its implementation. He is member of 
the Administrative Commission on Social Security for Migrant Workers.

For the past 4 years, Jean-Claude Fillon has been member of trESS. As visiting 
expert, he has participated in several trESS national seminars. He is also member 
of the trESS Think Tank.

He has several publications to his name. A recent example includes FILLON, J.-C., 
“Soins transfrontaliers: les conséquences d’une approche marchande”, Liaisons 
Sociales Europe 2009, 223, 5-8 (*).

I. 

revIew oF exISTIng 
rouTeS 

a.  One, then two routes for covering the 
costs of cross-border healthcare

1. 

The regulatory route

(a)  Regulation (EEC) No 1408/71

Ever since 1959 and Regulation No 3, the route com-
monly called the regulatory route or primary access 
route  to  cross-border  healthcare  has  been  open 
with its first aspect concerning access without prior 
authorisation to emergency care (‘where his condi-
tion requires immediate medical care’) during tem-
porary residence on the territory of another Member 
State.  The  second  aspect,  concerning  access  with 
prior authorisation to so-called planned care (‘who 
will be cared for on the territory of another Member 

*( ) 

This contribution was translated from the original French version.

(

961

)  This contribution expresses the personal views of the author and is 

binding on him alone.

State without, for all that, transferring his residence 
there’), came out in 1964 with Regulation No 73/63/
EEC, Regulation No 3 in its initial version only pro-
viding, again with prior authorisation, for a worker 
entitled to benefits in the state in which he resides 
to  retain  that  benefit  when  he  transfers  residence 
to the territory of another Member State.

The route introduced in this way became even more 
important with the continual increase in the range 
of beneficiaries, firstly through case-law interpreta-
tion of the notion of a worker being considered as 
an  insured  worker  and  extending  to  people  cov-
ered by a worker scheme, a development reflected 
in the description of this notion in Regulation (EEC) 
No 1408/71, then subsequently by the extension of 
the latter to non-salaried workers and to members 
of their families, to students and members of their 
families  and  to  third-country  nationals  residing 
legally in a Member State, through Regulation (EC) 
No  859/2003,  for  those  who  were  excluded  from 
the  application  of  Regulation  (EEC)  No  1408/71 
solely on grounds of their nationality. It being most 

213

50 years of Social Security Coordination 

Past – Present – Future

particularly  a  question  of  emergency  care  during 
temporary  residence,  the  Council  had,  moreover, 
long  anticipated  extending  these  provisions  of 
Regulation  (EC)  No  883/2004  to  anyone  (Commu-
nity national) covered by the health insurance laws 
of a Member State.

It is worth noting that such importance is no longer 
alien, with the transition of the six Member States 
concerned  to  27,  and  to  31  with  the  extension  of 
the  EEA  to  non-member  countries  of  the  EU  and 
to  Switzerland  (which  last  February  confirmed  by 
a popular vote the importance it attaches to main-
taining  the  agreement  signed  with  the  EU  on  the 
free movement of persons).

But, in terms of quality, the measures have evolved 
over time. With regard to the first aspect, emergency 
care during a stay, the categorical approach of Regu-
lation (EEC) No 1408/71, due to personal extensions 
by  stages,  combined  with  the  Pierik  cases  (117/77 
and 182/78), led to a paradoxical situation in which 
active workers during a stay had fewer rights than 
pensioners during temporary residence. At the same 
time as the setting up of the European health insur-
ance card, Regulation (EC) No 631/2004 proceeded 
to align entitlements in the different categories from 
the top. For active workers, there is thus a transition 
from emergency care (‘whose condition immediate-
ly requires benefits during a stay in the territory of 
another Member State’) to the new common stand-
ard of care during a stay (‘whose condition requires 
benefits in kind which become necessary on medi-
cal grounds during a stay in the territory of another 
Member State, taking into account the nature of the 
benefits and the expected length of the stay’).

With regard to the second aspect, planned care, the 
development concerned the conditions under which 
a patient may not be refused prior authorisation. In its 
initial version, Regulation (EEC) No 1408/71, innova-
tive in relation to Regulation No 3, simply prescribed 
that  such  authorisation ‘may  not  be  refused  where 
the treatment in question cannot be provided for the 
person concerned within the territory of the Member 

214

State in which he resides’. The Court of Justice (CJ), in 
its  Pierik  judgments  already  referred  to,  stated  that 
the decisive nature thus afforded to the medical care 
could  lead  to  the  obligation  to  grant  authorisation 
even though the treatment in question did not fall 
within the healthcare basket of the competent state’s 
scheme. But in order to return power of assessment 
to the institutions on behalf of which the benefits are 
used, Regulation (EEC) No 2793/81 tightened up the 
provision by establishing that from now on authori-
sation ‘may  not  be  refused  where  the  treatment  in 
question is among the benefits provided for by the 
legislation  of  the  Member  State  on  whose  territory 
the person concerned resides and where he may not 
be  given  such  treatment  within  the  time  normally 
necessary  for  obtaining  the  treatment  in  question 
in the Member State of residence, taking account of 
his current state of health and the probable course 
of the disease’. Healthcare baskets and waiting lists 
are  binding.  We  shall  see  that  the  new  Regulation 
(EC) No 883/2004, with CJ case-law in mind, adopts 
a more open wording no longer allowing the usual 
waiting times that may exist in the state concerned 
to be raised as an objection.

Conceptually,  what  firstly  characterises  this  route 
is  that  the  care  received  is  covered  by  the  health 
insurance scheme of the state in which that care is 
received  on  behalf  of  the  competent  scheme  cov-
ering the insured person, that person enjoying the 
benefits  in  kind  of  the  local  scheme ‘as  if  he  were 
insured’ only for the time the benefits are provided, 
the duration of the entitlement being governed by 
the laws of the other state.

The  second  main  characteristic  is  the  distinction 
made between care during so-called residence for 
which  access,  according  to  the  regulations  of  the 
state  in  which  it  is  received,  is  given  without  the 
prior authorisation of the competent state, regard-
less of the nature — hospital or otherwise — of that 
care,  and  so-called  planned  care,  for  which  prior 
authorisation  is  always  required,  regardless  of  the 
nature — hospital or otherwise — of that care.

Jean-Claude Fillon

(b)  Regulation (EC) No 883/2004

The new coordinating regulation does not overturn 
the route offered by the previous regulation, rather 
it develops and supplements it.

There is a development, first of all, with regard to 
the  planned  care  aspect  insofar  as,  from  now  on, 
prior authorisation will not be able to be refused 
‘where  the  treatment  in  question  is  among  the 
benefits  provided  for  by  the  legislation  in  the 
Member State where the person concerned resides 
and  where  he  cannot  be  given  such  treatment 
within  a  time-limit  which  is  medically  justifiable, 
taking into account his current state of health and 
the probable course of his illness’. The healthcare 
basket  remains  binding,  but  the  normal  waiting 
lists no longer do, if the state of health of the per-
son concerned requires more immediate access to 
the  treatment  requested.  The  influence  of  case-
law,  which  will  be  examined  in  the  next  point,  is 
clear  and  the  desire  is  to  standardise  the  criteria 
that may justify refusing authorisation by aligning 
them  to  the  most  restrictive  ones,  those  relating 
to case-law.

Then, a supplement exists on two fronts. Firstly, the 
subsidiary  provisions  of  Article  34  of  Regulation 
(EEC)  No  574/72,  which  will  be  discussed  further 
below in point B.2(c), concerning only care during 
a stay, are extended to planned care and become 
the main means of reimbursement in both cases of 
costs incurred by insured persons, who thus have 
the  opportunity  from  the  outset  to  obtain  reim-
bursement  for  either  the  tariffs  charged  by  the 
state of stay or the tariffs charged by the compe-
tent  state,  depending  on  whether  they  approach 
the institution in the place of stay or the compe-
tent institution (the latter being able to do either, 
as  the  people  concerned  choose,  if  both  options 
are possible).

Secondly, and perhaps most importantly in respect 
of  our  subject-matter,  what  might  be  described 
as  equivalent  to  the  Vanbraekel  supplement  (see 

point B.2(b)) below) is introduced only for planned 
care,  since  the  insured  person,  who  will  initially 
have  chosen  cover  according  to  the  tariffs  of  the 
state in which the care was received and will, him-
self, have effectively paid for all or part of the cost 
of  treatment,  will  be  able  to  ask  the  competent 
institution  for  supplementary  reimbursement,  to 
the  extent  of  the  costs  which  he  will  have  effec-
tively  borne,  if  the  amount  of  the  costs  assumed 
by the institution in the place of stay (reimbursed 
afterwards  under  the  competent  scheme)  is  low-
er  than  the  amount  of  costs  that  the  competent 
institution would have borne if the care had been 
received in the competent state.

It will thus be seen that, while the two main charac-
teristics of this route remain in the new regulation, 
the first is transformed since, in all situations, both 
options  are  offered,  and  sometimes  in  addition  to 
one another, that of cover according to the tariffs of 
the state of care and that of cover according to the 
tariffs of the competent state.

2. 

The case-law route

(a) 

From Decker/Kohll to Stamatelaki

Heralded  in  by  the  two  historical  judgments  of 
8 April 1998 Decker (C-120/95) and Kohll (C-158/96), 
then  confirmed  and  examined  in  depth  with  the 
series of Vanbraekel (C-368/98), Smits and Peerbooms 
(C-157/99),  Müller-Fauré  and  van  Riet  (C-385/99), 
Inizan  (C-56/01),  Commission  v  France  (C-496/01), 
Leichtle (C-8/02),  Watts (C-372/04) and  Stamatelaki 
(C-444/05)  judgments,  provisionally  in  the  latter 
case,  CJ  case-law  introduced  a  second  route  for 
covering  cross-border  healthcare,  based  on  the 
economic freedoms of the internal market.

Recalling that travel by a patient to another Mem-
ber State to purchase healthcare goods and serv-
ices  did  indeed  amount  to  purchases  of  goods 
and services within the meaning of the EC Treaty 
and  that  the  fact  that  it  was  a  matter  of  reim-
bursements  of  medical  costs  by  a  social  security 

215

50 years of Social Security Coordination 

Past – Present – Future

institution  did  not  change  the  goods  or  services 
nature  of  the  products  and  care  purchased  in 
another Member State, the CJ considered that the 
fact  of  a  social  security  scheme,  regardless  of  its 
nature,  only  intervening  within  the  scope  of  its 
national  territory  with  regard  to  the  provision  of 
benefits in kind or reimbursement of health costs 
constituted  a  restriction,  depending  on  the  case, 
on the free movement of goods or the free provi-
sion of services.

The  schemes  of  Member  States  must  therefore, 
without  restriction,  reimburse  the  care  costs 
incurred by their insured in another Member State 
to the extent of the cost they would have incurred 
or  the  reimbursement  amount  they  would  have 
granted  if  the  same  care  had  been  received  on 
national  territory  or  provided  by  the  national 
health  service staff and organisations. The  condi-
tions  of  access  to  healthcare  or  reimbursement 
that exist on national territory, such as the neces-
sary referral via a GP in order to consult a special-
ist, are applicable to the care received in another 
Member State as long as they are not discrimina-
tory by their nature or in the means by which they 
are applied.

The  CJ  did,  however,  agree  that  an  obstacle,  a 
restriction  on  these  freedoms,  may  be  permitted 
if  it  is  justified  and  it  has,  to  date,  accepted  three 
elements constituting as many pressing reasons of 
general  interest  justifying  recourse  to  a  system  of 
prior authorisation, provided, in addition, that this 
system is proportionate and that it offers adequate 
procedural guarantees:

•	

•	

•	

the  risk  of  seriously  undermining  the  financial 
balance  of  the  social  security  system  of  the 
state concerned;
the  need  to  maintain  a  balanced  medical  and 
hospital service open to all to help attain a high 
level of health protection;
the  need  to  maintain  a  healthcare  capacity 
or  medical  competence  on  national  territory 
considered as essential for public health, and 

even for the survival of the population of the 
said state.

In  order  to  be  accepted,  the  undermining  of  the 
financial balance of a social security system must 
be  effective,  continuous  and  considerable,  but, 
conversely, with regard to the other two justifica-
tions, the CJ considered that they were constitut-
ed  by  nature  for  hospital  healthcare,  concluding 
that ‘the requirement that the assumption of costs 
by the national system of hospital treatment pro-
vided in another Member State be subject to prior 
authorisation  appears  to  be  a  measure  which  is 
both  necessary  and  reasonable’  (Watts,  op.  cit., 
para. 110).

The obligation with regard to proportionality also 
led  the  CJ  to  consider  that  prior  authorisation, 
required  as  part  of  an  authorisation  system  justi-
fied  in  this  way,  may  only  be  refused,  it  being  a 
question of a treatment covered by the regime of 
the  competent  state,  when  a  treatment  which  is 
the  same  or  equally  effective  for  the  patient  can 
be  obtained  without  undue  delay  in  that  state 
(covered  by  its  regime),  taking  into  account  the 
patient’s medical condition.

This  new  route,  also  known  as  the  Treaty  route, 
thus  has  two  main  characteristics  that  are  very 
different  from  those  of  the  regulatory  route. The 
first  is  that,  this  time,  it  is  the  insured  person’s 
usual scheme, the scheme of the competent state, 
that is directly applied in order to reimburse him, 
under the conditions and according to the tariffs 
of  that  scheme,  the  healthcare  costs  incurred  in 
another  Member  State.  The  second  is  that  the 
option of prior authorisation remains, but only for 
hospital care.

We  shall  also  see  that  all  the  cases  cited  above 
referred  to  planned  care  and  that  the  CJ  has  not 
yet, to date, come to a decision on the applicability 
of such case-law to healthcare during a stay. But it 
should  soon  be  forced  to  settle  this  matter  in  the 
Commission v Spain case (C-211/08).

216

Jean-Claude Fillon

(b)  The proposal for a directive

Following  the  exclusion  of  the  health  sector  from 
the proposal for a directive on services in the inter-
nal  market,  the  Commission  published  a  com-
munication  on  26  September  2006  launching  a 
consultation (962)  regarding  Community  action  on 
health services. The outcome of this broad consul-
tation provided food for thought which resulted in 
the  proposal  for  a  directive  on  the  application  of 
patients’ rights in cross-border healthcare (963) being 
forwarded to the Council and European Parliament 
on 2 July 2008 as part of a social package.

In  spite  of  its  title,  this  proposal  is  wider  in  scope 
than  simply  setting  a  framework  for  cross-border 
healthcare,  since  it  is  structured  around  three 
main topics, the other two of which concern com-
mon  principles  for  all  EU  health  systems  (quality 
and  safety  of  care)  and  European  cooperation  on 
healthcare  (European  reference  systems,  online 
healthcare, etc.).

We  are  concerned  here  only  with  the  first  topic, 
announced  as  a  transposition  and  a  systematisa-
tion of the case-law referred to in (a) above.

In  this  regard,  we  thus  find  in  the  proposal  the 
principle  (Article  6)  of  payment  by  the  Member 
State  of  affiliation,  in  the  form  of  a  reimburse-
ment,  of  the  costs  incurred  by  patients/insured 
persons in another Member State according to the 
laws applied by that state, this being equally valid 
for  deciding  what  care  is  reimbursable  (national 
healthcare  basket),  for  setting  the  reimburse-
ment amount within the limit of the costs actually 
incurred  according  to  the  cost  that  would  have 
been incurred if the care had been received in the 
state of affiliation and, finally, for setting the same 
conditions, criteria of eligibility and regulatory and 
administrative  formalities  concerning  the  care  as 
those that are imposed for the same kind of care 

962(

)  SEC(2006) 1195/4.

963(

)  COM(2008) 414 final.

received on national territory, provided, of course, 
that they are neither discriminatory nor constitute 
an obstacle to freedom of movement.

The same distinction is made between non-hospi-
tal  care,  the  reimbursement  of  which  may  not  be 
subject  to  any  prior  authorisation  (Article  7),  and 
hospital care.

The  latter  (Article  8)  is  at  first  widely  defined  as 
being healthcare requiring that the patient stay in 
hospital for at least one night and the types of care 
which, spelled out in an explicit list drafted and reg-
ularly updated by the Commission with the assist-
ance  of  an  ad  hoc  committee,  do  not  require  the 
patient to stay in hospital for at least one night, but 
which do call for highly specialised and cost-inten-
sive  medical  infrastructure  or  medical  equipment 
or which are associated with treatments presenting 
a particular risk to the patient or the population.

The  Member  State  of  affiliation  can  subject  the 
reimbursement of this hospital care to prior author-
isation, the proposal stating that each state may set 
up a prior authorisation system for its social security 
system to cover the care received in another Mem-
ber State and making national care part of its bas-
ket in order to avoid this payment actually or being 
likely to ‘seriously undermine the financial balance 
of  its  social  security  system  and/or  the  planning 
and rationalisation carried out in the hospital sec-
tor to avoid hospital overcapacity, imbalance in the 
supply of hospital care and logistical and financial 
wastage,  the  maintenance  of  a  balanced  medical 
and hospital service open to all, or the maintenance 
of treatment capacity or medical competence on its 
territory’. It adds that such a system shall be limited 
to what is necessary and proportionate to prevent 
such  impact  and  shall  not  constitute  a  means  of 
arbitrary discrimination and that the Member State 
must  make  public  all  relevant  information  on  the 
systems introduced in this way.

Provisions  also  govern  the  procedural  guarantees 
that must be provided by these prior authorisation 

217

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Past – Present – Future

systems (Article 9) and the right of patients to infor-
mation  on  receiving  cross-border  healthcare  (Arti-
cle  10),  establish  the  principle  of  the  competence 
of  the  legislation  of  the  state  in  which  the  care  is 
received  in  respect  of  the  rules  applicable  to  this 
care (Article 11) and oblige Member States to des-
ignate  national  contact  points  for  cross-border 
healthcare.  Finally,  it  will  be  noted  that  relation-
ships  with  Regulation  (EEC)  No  1408/71  (formerly 
(EC) No 883/2004) are envisaged in terms of sepa-
rate application and exclusive competence — if the 
regulation applies, the directive does not apply and 
vice  versa  —  by  Article  3,  but  with  priority  all  the 
same given by Article 9 to open-ended entitlement 
in respect of the regulation if the conditions mak-
ing  it  impossible  to  refuse  prior  authorisation  are 
met. We shall see later on that these wordings are 
associated with a reading of the relevant provisions 
of the regulations that is open to criticism.

The Council has already carried out an initial exami-
nation of this part of the proposal under the French 
Presidency  and  there  has  been  consensus  on  a 
number of main themes:

•	

•	

•	

firstly,  recalling  that  health  is  an  area  which 
essentially  comes  under  national  competence 
and that the directive must neither impose new 
obligations  on  Member  States  nor,  under  the 
guise of CJ case-law, bestow regulatory powers 
on the Commission;
next, transposing CJ case-law and nothing but 
that  case-law,  without  seeking  to  depart  from 
it  by  over-restrictive  provisions,  the  risk  there-
fore being to create a third route through this 
directive,  since  a  case-law  route  would  then 
continue to exist for those constituents or situ-
ations not covered by the directive, thus totally 
turning  away  from  the  objectives  of  clarifica-
tion and simplification;
finally, noting the full autonomy of the directive 
over the regulation and vice versa, the latter in 
the  future  being  designed  to  be  expanded  by 
provisions  simplifying,  coordinating  and  har-
monising the two routes.

A majority of Member States were, at this stage, and 
subject to the wording of the amended provisions, 
able to support the following major changes.

•	

•	

•	

Extension  of  the  scope  covered  to  all  health-
care, defined as the entirety of the goods and 
services  provided  or  prescribed  by  a  health 
professional  legally  exercising  his  activity  in 
the state in which the care is received, in place 
of a proposed definition restricted to the serv-
ices  provided  by  health  professionals  coming 
under a regulated profession within the mean-
ing of Directive 2005/36/EC on the recognition 
of  professional  qualifications. The  objective  is 
to include the non-specialised nature of case-
law and to avoid creating a third route, as stat-
ed above.
Subject  to  maintaining  a  generic  definition 
of  hospital  and  specialist  care,  setting  out  the 
list  of  such  care  (requiring  prior  authorisation 
in order to be accepted for reimbursement) at 
national level, considered more legitimate and 
appropriate, rather than at Community level by 
the Commission as provided for in the proposal. 
The Council’s objective here is to simultaneous-
ly  retain  control  at  national  level  of  a  defini-
tion  proving  essential  for  the  justification  and 
smooth running of the prior authorisation sys-
tem, as well as for the preservation of national 
competence  in  terms  of  the  organisation  and 
supply of healthcare, and to ensure the desired 
flexibility  and  adaptability  given  the  diversity 
of national systems and their respective health-
care  baskets  and  the  rapid  development  of 
medical techniques and cures.
It  being  a  matter  of  possibilities  of  introduc-
ing  a  prior  authorisation  system,  rejection  of 
the removal of the burden of proof effected by 
a proposal that would force Member States to 
demonstrate case by case that the lack of such 
a  system  would  jeopardise  the  financing  and/
or  organisation  of  the  supply  of  care  on  their 
territory and seek a better balance between the 
individual rights of patients to mobility within 
the Union and the maintenance of the capacity 

218

Jean-Claude Fillon

of  Member  States  to  regulate  and  plan  their 
own  healthcare  system. The  Council  favours  a 
strict resumption of case-law: right of Member 
States,  without  prior  authorisation  or  justifica-
tion, to introduce a prior authorisation system 
solely  for  hospital  and  specialist  care,  on  the 
basis of the justifications accepted by the CJ, as 
long as that system is, in other respects, propor-
tionate and contained by adequate procedural 
guarantees,  accompanied  by  an  obligation  to 
grant  the  authorisation  requested  when  the 
treatment  appears  on  the  list  of  treatments 
covered  by  the  national  scheme  and  a  treat-
ment  which  is  the  same  or  equally  effective 
for  the  patient  may  not  be  obtained  without 
undue delay in the competent state, taking into 
account the patient’s medical condition.
Finally,  with  regard  to  structuring  this  direc-
tive  with  the  coordinating  regulation,  the 
Council  has  proved  rather  agreeable  to 
improving  this  structuring  by  simplifying  it, 
the  directive  being  content  with  stating  that 
it applies without prejudice to the regulation, 
and  facilitating  it  simultaneously  by  extend-
ing the scope of the directive so that it is more 
consistent  with  that  of  the  regulation  and 
thus  by  reconciling  the  prior  authorisation 
system  with  that  of  the  regulation,  for  possi-
ble  merger  when  the  directive  is  transposed 
into national legislation.

•	

At the same time, the European Parliament has also 
begun to examine this proposal and, whilst its final 
decision in full session for this first reading was not 
known at the time this contribution was drafted, we 
can already infer from the work in committee that 
the proposed amendments:

•	

approximate  the  Council’s  guidelines  on  the 
definitions  of  healthcare  (but  excluding  long-
term  care  and  organ  transplants)  and  hospital 
care  (without,  however,  adopting  the  expres-
sion ‘hospital  and  specialist  care’),  and  on  the 
relationships between directive and coordinat-
ing regulation;

•	

depart  from  them  on  prior  authorisation  by 
maintaining  the  a  priori  conditions  laid  down 
for  its  implementation  by  exempting  patients 
suffering from rare diseases from this obligation, 
and by adding provisions on the reimbursement 
of transport costs, costs paid in advance and pri-
or notification of the reimbursement amount.

Without prejudging what the final vote in full session 
might be, we can deduce from the overall number of 
amendments  by  the  two  institutions  and  the  large 
number of differing amendments that the search for 
agreement at a second reading will require consider-
able effort on both sides in terms of conciliation and 
long explanation and negotiation sessions.

b.  Two routes different in nature and not 
always with the same end in view

1.  A second, more problematic route

(a)  Variable, uncontrolled application

By  its  nature,  case-law  of  this  importance,  being 
supplemented  from  judgment  to  judgment,  but 
at the same time not systematically since, beyond 
matters of principle, it is responding simply to spe-
cific  matters  raised  at  the  time  in  the  individual 
cases  under  examination,  does  not  always,  in  the 
absence of a joint Community provision or action, 
guarantee  total,  uniform  application  by  all  the 
Member States.

Although  the  general  character  of  the  said  case-
law,  applicable  to  all  affiliation  systems  regardless 
of their nature — health service, system of benefits 
in kind or insurance scheme — able to be deduced 
from  the  initial  judgments,  may  have  been  indis-
putably  confirmed  in  the  Watts  judgment,  it  has 
to be noted that still not all the Member States are 
applying it, whereas others apply it partially or with 
unilateral adaptations.

The  practical,  specific  information  on  the  options 
provided  by  this  means  of  accessing  cross-border 

219

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Past – Present – Future

healthcare,  its  characteristics  and  the  conditions 
under  which  it  is  applied  is  rarely  available  or  not 
immediately available to users, whilst the means of 
information  associated  with  the  coordinating  reg-
ulations  (sites,  brochures  and  so-called  ‘portable’ 
forms  such  as  the  E112)  are  consequently  incom-
patible and ignore this second route.

The  interpretations  that  the  Commission’s  depart-
ments  may  have  of  this  case-law  may  even  vary 
from one directorate to another and lead to appar-
ently  contradictory  actions.  This  is  the  case  with 
action  brought  for  non-application  of  case-law  to 
cases of care during a stay even though the propos-
al  for  a  directive  is  expressly  restricted  to  planned 
care and the proposal for an implementing regula-
tion is also restricted simply to planned care for the 
substitute  for  the  Vanbraekel  supplement,  or  with 
another  action  brought  against  extending  a  prior 
authorisation  system  to  cost-intensive  specialist, 
but non-hospital, care at the same time as the pro-
posal for a directive with which we are concerned 
opens  up  the  possibility  of  establishing  a  prior 
authorisation  system  for  non-hospital  specialist 
care.  Or,  again,  the  assertion  drawn  from  a  read-
ing of the judgments concerned that authorisation 
granted in respect of the regulation is tantamount 
to authorisation granted in respect of case-law and 
vice  versa  for  a  situation  and  care  that  may,  natu-
rally,  come  under  the  two  routes,  and  the  parallel 
assertion  concerning  the  proposal  for  a  directive 
that  the  scope  of  Regulation  (EC)  No  883/2004 
would be restricted — something we consider erro-
neous — simply to those cases in which authorisa-
tion  may  not  be  refused,  which  makes  it  possible 
to envisage for the Member States a choice beyond 
these cases between not granting authorisation or 
granting  valid  authorisation  only  in  respect  of  the 
directive (payment according to the tariffs applied 
by the competent state).

It  is  true  that,  insofar  as  the  main  principles  and 
guidelines  of  such  case-law  appear  fixed,  its  lim-
its  are  still  unclear  with  regard  to  certain  aspects, 
and  the  mechanisms  by  which  it  is  implemented 

(coverage  tariffs,  methods  of  breaking  down  the 
costs incurred, access to healthcare versus the state 
in which it is given, etc.) call for details that are not 
yet forthcoming.

Cases in progress will make it genuinely possible to 
specify or modify certain temporary limits. Thus the 
Commission v Spain case (C-211/08) will give the CJ 
the  opportunity  to  state  whether  its  case-law  can 
also,  as  seems  clear  to  us,  relate  to  care  during  a 
stay, whether covered directly or by way of a sup-
plement  (Vanbraekel  supplement).  Similarly,  the 
Commission v France  case  (C-512/08)  should  make 
it  possible  to  find  out  whether  the  criteria  identi-
fied  by  the  CJ  are  able  to  justify  a  system  of  prior 
authorisations applying to care received from non-
classic  hospital  bodies  or,  at  the  very  least,  clarify 
the notion of hospital treatment (964).

A third case — von Chamier-Glisczinki (C-208/07) — 
could present very contradictory results. It in fact 
relates  to  long-term  care  (coverage  of  the  costs 
of  staying  in  a  specialist  establishment).  Whilst 
extending  the  scope  of  healthcare  to  depend-
ency  care  or  loss  of  independence  would  not,  in 
our  opinion,  pose  any  more  of  a  problem  to  the 
CJ within the context of this case-law than that of 
the  coordinating  regulation,  the  real  issue  is  that 
Article  49  EC  is  not  applicable,  as  confirmed  by 
the counsel for the prosecution, the woman con-
cerned  not  having  gone  to  Austria  (stay)  to  buy 
these  long-term  care  services,  but  having  set  up 
residence there with her husband.

On  the  other  hand,  however,  the  counsel  for  the 
prosecution is of the opinion that an identical right 
to the reimbursement of such benefits in kind (with 
the conditions appropriate to hospital care) can be 

(

964
) 

In  a  recent  judgment  dated  10  March  2009  (Hartlauer,  C-169/07), 
the CJ noted that ‘It cannot be excluded from the outset that, as the 
Court has already ruled with respect to hospitals (…), establishments 
providing outpatient care such as doctors’ surgeries and outpatient 
clinics may also be the subject of planning. Planning which requires 
prior  authorisation  for  setting  up  new  providers  of  services  may 
prove indispensable for filling in possible gaps in access to outpatient 
care  and  for  avoiding  the  duplication  of  structures,  so  as  to  ensure 
medical care which is adapted to the needs of the population, covers 
the  entire  territory  and  takes  account  of  geographically  isolated  or 
otherwise disadvantaged regions’.

220

Jean-Claude Fillon

introduced on the basis of Article 18 EC (EU citizen-
ship). Were the CJ to go in this direction, case-law 
would  evolve  in  two  ways,  on  the  one  hand  by 
extending  its  scope  ratione  materiae  to  the  reim-
bursement of long-term care and, on the other, by 
extending its personal scope to people residing in a 
state other than the competent state and request-
ing,  on  the  basis  of  Article  18  EC,  the  latter  to 
reimburse  healthcare  or  healthcare  product  costs 
incurred in the state of residence.

(b)  A commercial route to accessing healthcare

In  undertaking  this  second  route,  as  soon  as  the 
patient/insured  person  goes  to  another  Member 
State to buy healthcare products or services there, 
he leaves the framework of the social security law 
coordination and enters the framework of the inter-
nal market. As soon as he is outside his borders and 
although  he  remains  an  EU  citizen,  he  is  divested 
of his status as an insured person (a person paying 
social security contributions) to become once more 
a simple economic subject, a purchaser of products 
and services on the single market (unregulated, to 
date, from the Community perspective as far as the 
healthcare sector is concerned) (965).

As  a  result,  he  is  no  longer,  as  within  the  context 
of the coordinating regulation, temporarily consid-
ered  as  an  insured  person  under  the  local  system 
and in respect of practitioners, providers and estab-
lishments in the state of stay:

•	

•	

•	

he  must  pay  costs  in  advance  and  in  all  cases 
settle his expenses;
he may find himself billed for costs at prices or 
tariffs different to those locally enforceable on 
insured persons or social security institutions;
he  no  longer,  or  at  least  statutorily,  benefits 
from  the  healthcare  protocols,  good  practices 
and  entitlements  laid  down  by  local  social 
security, nor from any easy access to healthcare 

that  may  be  reserved  to  people  paying  social 
security contributions.

Similarly, being outside national borders, he is una-
ble to benefit from the protection offered to him by 
his own system, since the healthcare professionals 
he  consults  have  no  connection  with  that  system 
and no obligations (966), other than those laid down 
by the rules of their professional code of ethics and 
the  general  public  health  laws  applicable  locally. 
He will only again become an insured person at the 
time  of  submitting  his  application  for  reimburse-
ment to his usual social security institution, based 
on  case-law  and  the  transpositions  that  already 
exist in some national laws.

In  its  current  state  and  without  any  containment, 
this route may therefore be described as commer-
cial with, as we have just pointed out, negative eco-
nomic effects on patients, except in cases where the 
costs of cover or reimbursement of the systems of 
affiliation are such that they can reimburse almost 
all  the  costs  incurred  in  a  state  in  which  the  level 
of healthcare costs, even with unrestricted tariffs, is 
very low.

But  in  the  latter  case,  a  supplementary  charge  is 
transferred  to  the  system  of  affiliation.  From  the 
latter’s  point  of  view,  it  should  also  be  noted  that 
the second route deprives it of its regulatory tools 
aimed  directly  at  healthcare  professionals,  provid-
ers and establishments in their activity, since they 
fall outside its scope of cover. It is then faced with 
‘unauthorised’  purchases  which  it  can  only  chal-
lenge with its financial limits of cover (internal tariffs 
or costs) and the conditions of access to and con-
sumption  of  healthcare  directly  enforceable  only 
on insured persons, hence without going through 
regulation  of  the  activity  or  practice  of  healthcare 
professionals,  as  long  as  these  conditions  are  not 
discriminatory (obstacles to freedom of movement) 
in the specific situations encountered.

(

965
) 

J. C. Fillon, ‘Soins transfrontaliers: les conséquences d’une approche 
marchande’ 
[Cross-border  healthcare:  the  consequences  of  a 
commercial approach], Liaisons Sociales Europe, 2009, No 223, 5–8.

966

(

)  Excluding,  of  course,  the  rare  case  in  which  the  healthcare 
professional is voluntarily associated with the said system. Similarly, 
a  cross-border  healthcare  cooperation  agreement  can  create  such 
associations locally. 

221

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Past – Present – Future

(c)  Difficulties in practical application

From  the  technical  viewpoint  of  the  application  of 
case-law by the competent institutions this time, the 
two routes clearly have different consequences.

As  far  as  the  institution  to  which  the  patient  is 
affiliated  is  concerned,  the  first,  so-called  regula-
tory  route  has  a  big  practical  advantage  because 
this  institution  does  not  need  to  concern  itself 
with  the  conditions  for  accessing  care,  nor  the 
conditions for covering the healthcare benefits or 
costs incurred, as it is the institution of the place of 
stay that deals with them through a sort of provi-
sion of services that it carries out on behalf of the 
first institution, and it does so by applying its own 
regulations  within  its  own  national  context.  Con-
versely, as we know, the first institution will have 
to reimburse the second in full and will therefore 
have no control over the final cost.

With  the  second,  so-called  case-law  route,  the 
competent  institution  does,  on  the  other  hand, 
have  control  over  this  cost  as  it  operates  within 
the limit of the cost that it would incur at home 
for the same care, but it has to battle significant 
technical difficulties to apply its regulations and 
norms  in  a  foreign  environment  operating  with 
regulations,  norms  and  practices  that  are  com-
pletely  different  to  those  in  force  on  its  own 
national territory, whether it is a matter of health-
care practitioners, suppliers or establishments. In 
addition,  depending  on  the  state  in  which  the 
care  is  received,  a  competent  institution  is,  in 
fact, with this route dealing with 26 diverse and 
differing worlds.

At  the  national  level,  there  is  necessarily  consist-
ency,  complementarity,  even  similarity  of  defini-
tions  between  the  public  health  sphere  and  the 
social security sphere, which is obviously not the 
case from one EU Member State to another given 
the lack of harmonisation generally in these social 
security  and  health  areas.  Moreover,  the  difficul-
ties will initially be issues of identifying drugs and 

products  that  are  described  under  trade  names 
different to those current in the competent state, 
medical  practices  and  procedures  that  may  be 
different  or  grouped  differently  for  making  up  a 
single  procedure  or  treatment  (from  an  adminis-
trative  point  of  view,  will  that  surgical  treatment 
of an organ lesion, for example, involve the same 
number  of  technical  and  human  procedures  and 
interventions  from  one  state  to  another?).  Differ-
ences  in  the  basket  of  care  available,  current  or 
recommended  medical  practices  for  treating  the 
same complaint, the same lesion, as well as admin-
istrative practices, will be added.

For  example,  how  can  the  national  reference 
amount for reimbursement easily be determined if 
it is expressed in the competent state by prices for 
hospital  costs  set  by  pathology,  when  the  insured 
person submits receipted invoices issued by a hos-
pital in another Member State where prices are set 
in terms of a daily price, if the pathology treated and 
the treatment given are not shown on the invoices? 
Medical  confidentiality  and  the  protection  of  per-
sonal data will, moreover, amount to such a case as 
much as obstacles to the clarification sought by the 
competent institution.

In  other  words,  close  cooperation  between  the 
institutions in the place of stay and the competent 
institutions  is  necessary  for  this  second  route  to 
be effective, a need for cooperation which reaches 
its  highest  point  when  it  involves  determining  a 
potential  Vanbraekel  supplement,  which  we  shall 
look  at  below (967),  since,  given  such  an  assump-
tion,  the  competent  institution  must  be  able  to 
find  out  within  a  reasonable  time  the  cost  of  the 
benefits in kind provided by the state that delivers 
the  healthcare  and  which  it  will  subsequently  be 
asked to reimburse within the context of the regu-
lation’s financial provisions and procedures.

(

967

)  The Administrative Commission specifically tackled these difficulties, 
via the procedures for applying Article 26, para. 5, of the implementing 
regulation  of  Regulation  (EC)  No  883/2004,  during  a  working  party 
meeting  on  13  November  2008  (see  introductory  note  CA.SS.TM. 
420/08 of 23 October 2008).

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Jean-Claude Fillon

At the current stage of development of this route, 
very  liberal  in  approach  in  a  contrasting  environ-
ment unregulated at Community level, the paradox 
lies  in  the  need  for  more  cooperation,  harmonisa-
tion, equivalence and standardisation for reconcil-
ing the rights of patients and the balance of national 
schemes, as well as their capacity to regulate their 
healthcare systems.

2.  Common points or convergence

Although  these  two  access  routes  to  cross-border 
healthcare  adopted  are  so  different  in  design  and 
orientation, the image of two parallel roads is hard-
ly appropriate to them and it is possible to identify 
points where they meet and overlay one another.

(a)  Prior authorisation and tariffs

The  first  point  of  contact  is  the  prior  authorisa-
tion that is able to be granted in certain situations. 
Admittedly,  the  scopes  are  different,  wider  in  the 
regulation  where  it  concerns  planned  care  as  a 
whole;  regardless  of  its  level  of  specialisation  and 
regardless of its cost, it is restricted only to hospital 
care  in  case-law.  Similarly,  the  situations  in  which 
such  authorisation  may  not  be  refused,  when  the 
treatment  envisaged  appears  on  the  list  of  treat-
ments covered by the national scheme, apparently 
differ  in  case-law,  which  refers  to  the  fact  that  a 
treatment  which  is  the  same  or  equally  effective 
for the patient may not be obtained without undue 
delay, taking into account the patient’s medical con-
dition, in the state in which he is residing, from the 
regulation,  which  refers  to  the  fact  that  this  treat-
ment may not, taking into account his current state 
of  health  and  the  probable  course  of  the  disease, 
be provided to the patient within the time normally 
necessary to obtain this treatment in the  Member 
State in which he resides.

But  the  CJ,  as  from  the  Inizan  judgment,  afforded 
the  latter  timescale  an  identical  interpretation  as 
that  it  had  clarified  for  the  words ‘without  undue 
delay’ appearing in the text of the former judgment 

and  it  will  conclude  in  its  judgment  to  the  Watts 
case, in which it had again been questioned about 
the meaning to be given to these expressions, that 
‘there is no reason which seriously justifies different 
interpretations depending on whether the context is 
Article 22 of Regulation No 1408/71 or Article 49 EC,  
since in both cases the question is (…) whether the 
hospital treatment required by the patient’s medi-
cal  condition  can  be  provided  on  the  territory  of 
his  Member  State  of  residence  within  an  accept-
able time which ensures its usefulness and efficacy’  
(para.  60).  As  stated  above,  Regulation  (EC)  No 
883/2004  did  away  with  any  risk  of  duality  in  the 
matter by reprising the same terms as case-law.

With regard to authorisation as such, the CJ in the 
Vanbraekel  judgment  stated  both  that  authorisa-
tion given in respect of national law (therefore also 
in respect of a national law having transposed the 
case-law directly or via the draft directive) must be 
considered as constituting authorisation in respect 
of the regulation and, albeit implicitly, that authori-
sation given in respect of the regulation was tanta-
mount  to  authorisation  in  respect  of  case-law  (for 
care  coming  within  their  two  respective  scopes, 
obviously),  since  application  of  the  regulation  did 
not then prevent any supplement being agreed in 
respect of case-law, especially in a case in which the 
latter accepted a system of prior authorisation.

If we add that in both cases, regulation or case-law, 
the prior authorisation system must offer adequate 
procedural guarantees, we can conclude that it will 
be  the  unity  of  the  prior  authorisation  system  as 
soon  as  a  state  decides  to  create  one.  Authorisa-
tion granted will be able to be used by the person 
concerned according to one or other route depend-
ing on his choice (on his interest) and the objective 
possibilities  of  using  one  or  the  other. The  system 
only becomes a dual one again (and in fact there is 
then only a need for prior authorisation in respect 
of one of the two routes) for non-hospital care.

The second point of contact are the tariffs employed 
by  the  institutions  for  reimbursing  the  costs  of 

223

50 years of Social Security Coordination 

Past – Present – Future

healthcare  received  by  their  insured  members  in 
another Member State.

may lawfully include amounts not directly billable 
to private individuals.

To the remark made by some states with a system 
of benefits in kind or a national health service that 
their internal regulations did not contain any finan-
cial  mechanisms  for  directly  reimbursing  insured 
persons for their costs, nor any tariffs for determin-
ing the amounts of such reimbursements, the CJ put 
forward  the  fact  that,  whilst  Community  law  does 
not  infringe  the  competency  of  Member  States  to 
design their own social security system, the require-
ments  to  implement  the  fundamental  freedoms 
guaranteed  by  the Treaty  inevitably  obliged  them 
to make adjustments to their system.

Thus this is, for example, the case of the provisions 
adopted  to  ensure  the  application  of  Articles  36 
and 63 of Regulation (EEC) No 1408/71 or Article 34  
of Regulation (EEC) No 574/72. The CJ added that 
there is nothing precluding the competent Mem-
ber  State  which  has  no  reimbursement  system 
from setting the reimbursement amounts (tariffs) 
able to be claimed by patients who have received 
healthcare  in  another  Member  State,  so  long  as 
those  amounts  are  based  on  objective,  non-dis-
criminatory  and  transparent  criteria  (Müller-Fauré 
and van Riet,  op.  cit.,  para.  107),  but  it  also  noted 
that  the  tariffs  and  mechanisms  put  in  place  to 
determine  the  amount  billed  to  the  competent 
state for healthcare received by its insured in the 
state  concerned  can  serve  as  relevant  reference 
instruments  for  determining,  in  that  state,  the 
reimbursement amounts to be granted to its own 
patients who have received healthcare in another 
Member State.

In any event, tariffs for the application of case-law 
which would, like healthcare, be different according 
to whether it involves working out billing for anoth-
er Member State or applying Article 34 of Regula-
tion  (EEC)  No  574/72,  or  reimbursing  cross-border 
healthcare according to case-law, would constitute 
discriminatory tariffs, unless it could be proved that 
the  billing  of  the  cost  of  benefits  to  other  states 

(b)  Vanbraekel supplement

From  the  outset,  the  CJ  had  to  clarify  that  Arti-
cle 22 of Regulation (EEC) No 1408/71 was not con-
cerned  with  this  case-law,  its  objective  not  being 
to regulate and in no way prevent reimbursement 
by the Member States according to their tariffs for 
costs incurred at the time of healthcare provided in 
another Member State, even without prior authori-
sation.  In  examining  Article  22  of  the  regulation 
more deeply, the CJ will conclude in the Inizan judg-
ment  already  referred  to  that  its  provisions  even 
help to facilitate the free movement of patients and 
the provision of cross-border medical services, thus 
that they do not include any component such as to 
affect its validity.

In addition, the applicability of Article 22 to health-
care  does  not  preclude  such  healthcare  from  also 
being able to fall within the scope of the provisions 
of  the  Treaty  on  the  free  movement  of  goods  or 
services, and therefore the person concerned from, 
at the same time, with regard to these latter provi-
sions, being entitled to access healthcare in another 
Member State under different reimbursement con-
ditions than those stipulated in the said article.

That being the case, ‘not intended to regulate any 
reimbursement  at  the  tariffs  in  force  in  the  Mem-
ber  State  of  registration,  Article  22  of  Regulation 
No 1408/71 does not have the effect of preventing 
or prescribing payment by that state of additional 
reimbursement  covering  the  difference  between 
the system of cover laid down by the legislation of 
that  state  and  the  system  applied  by  the  Member 
State of treatment, where the former is more advan-
tageous than the latter and such reimbursement is 
provided for by the legislation of the Member State 
of registration.

Article  59  of  the  EC  Treaty  is  to  be  interpreted 
as  meaning  that,  if  the  reimbursement  of  costs 

224

Jean-Claude Fillon

reimbursement tariffs in their regulations to reim-
burse their insured according to these tariffs, pro-
vided again that the person concerned agrees that 
this is how it is and that the amount of the costs 
submitted for reimbursement shall not exceed an 
amount  set  by  the  Administrative  Commission. 
Furthermore, it was added that the agreement of 
the person concerned is not necessary when the 
regulations of the state of stay do not provide for 
reimbursement tariffs.

recently, 

Regulation 

(EC) 
through 
More 
No  1386/2001,  this  second  procedure  has  itself, 
in  fact,  been  subdivided  into  two  sub-procedures 
offered  to  the  competent  institutions  with  reim-
bursement tariffs in their regulations to reimburse 
their  insured  according  to  these  tariffs:  with  the 
agreement  of  the  person  concerned  and  subject 
to the total costs not reaching the aforementioned 
threshold  if  the  state  of  stay  has  reimbursement 
tariffs,  without  the  agreement  of  the  person  con-
cerned  and  without  the  intervention  of  the  cost 
threshold  if  the  state  of  stay  does  not  have  reim-
bursement tariffs.

It  is  worth  noting  that  these  provisions,  certain-
ly  not  applicable  in  the  case  of  planned  care  and 
variable application procedures depending on the 
states concerned, but amended several times in the 
direction of a wider application, in practice amount 
to  the  same  for  the  insured  person  as  if  he  were 
offered  the  provisions  of  the  second  route. This  is 
another type of convergence, unlike the tools, but 
this time similar to the results in situations treated 
in the same way.

incurred on hospital services provided in a Member 
State of stay, calculated under the rules in force in 
that state, is less than the amount which application 
of  the  legislation  in  force  in  the  Member  State  of 
registration would afford to a person receiving hos-
pital treatment in that state, additional reimburse-
ment  covering  that  difference  must  be  granted  to 
the  insured  person  by  the  competent  institution’ 
(Vanbraekel, op. cit., para. 53).

Applicable also to non-hospital care costs (with-
out  prior  authorisation),  this  possibility  of  a 
supplement  perfectly  illustrates  that  the  paral-
lel  application  of  both  routes  is  reflected  here 
implicit, 
by  overlapping  accompanied  by  an 
but  clear,  rule  against  the  non-accumulation  of 
potential reimbursements.

(c)  Article 34 of Regulation (EEC) No 574/72

The  enjoyment  of  benefits  in  kind  in  the  event  of 
care during a stay being subject to the submission 
of the request for cover/reimbursement in the state 
of stay before the person concerned returns to his 
usual  state  of  residence,  Article  34  of  Regulation 
(EEC) No 574/72, in its initial version, creates a catch-
up  procedure  intended  to  enable  the  person  con-
cerned, when he has not fulfilled these formalities 
on the spot, to contact the institution to which he 
is affiliated to ask it to reimburse the costs incurred 
according  to  the  tariffs  which  would  have  been 
applied by the state of stay. The latter then needs to 
question the institution of the place of stay to find 
out what reimbursement it would have granted if it 
had been approached by the person concerned.

The  entry  of  Member  States  with  health  services 
making this procedure inapplicable and, in addi-
tion,  time-limits  imposed  by  some  institutions 
for  forwarding  the  information  requested  on 
the  reimbursements  they  would  have  granted, 
have  led  to  this  article  being  amended,  Regula-
tion  (EEC)  No  1249/92  supplementing  it  in  order 
to  introduce  into  it  a  simplified  derogatory  pro-
cedure enabling the competent institutions with 

As  stated  earlier  in  point  A.1(b),  the  implement-
ing regulation of Regulation (EC) No 883/2004 not 
only adopts these provisions, but extends them to 
planned  care  and  does  away  with  the  subsidiary 
or catch-up procedure nature of them by integrat-
ing  them  directly  into  the  articles  describing  the 
methods for covering healthcare during a stay and 
planned  care,  like  the  methods  of  cover  offered 
straight away to insured persons.

225

50 years of Social Security Coordination 

Past – Present – Future

II.  For approximation between  

the two routes

again  leads  us  to  coordinate  the  two  approaches 
more effectively.

a.  The reasons for such an approach

2.  Pressing needs for legal security  

1. 

Two already very intermingled routes

Although  very  different  in  origin  and  nature,  it  is 
therefore necessary to kill off the idea of two quite 
parallel  routes,  all  of  whose  components  are  at 
odds.  On  the  contrary,  we  have  just  pointed  out 
some common components: the prior authorisation 
system,  even  if  its  scope  of  cover  is  different  from 
one route to the other, and the reimbursement or 
financial coverage tariffs of the systems. Better still, 
both routes can sometimes be followed together in 
the sense of applying the regulations to start with, 
then by way of supplementing case-law in order for 
a  Vanbraekel  supplement  to  be  obtained  (moreo-
ver, there would seem to be nothing precluding a 
person  who  has  received  prior  authorisation  and 
contacted the institution to which he is affiliated in 
order to obtain reimbursement of his costs accord-
ing to that institution’s tariffs from then obtaining 
a  supplement  from  the  same  institution  enabling 
him to obtain the higher amount that would have 
been reimbursed by the institution of the place of 
stay if he had approached that institution).

Finally,  Article  34  of  Regulation  (EEC)  No  574/72 
shows  us  that  the  regulatory  route  may  also  lead 
to  a  situation  in  which  healthcare  costs  are  paid 
according  to  the  tariffs  of  the  institution  of  affili-
ation,  as  in  case-law,  a  perspective  extended  by 
the  implementing  regulation  of  Regulation  (EC) 
No  883/2004  to  all  healthcare  costs,  whether  they 
relate to care during a stay or planned care.

Such  intermingling  of  the  two  routes  in  these  cir-
cumstances is an initial reason for wishing to bring 
them closer and coordinate them, especially since 
they  share  common  tools,  prior  authorisation  and 
reimbursement  tariffs,  which  could  not  change  or 
be  amended  for  one  route  without  having  conse-
quences for the other. The concern for consistency 

226

and simplification

(a) 

The current situation as a source  
of legal uncertainty

From the point of view of the patient, the insured 
person,  the  current  situation  is  rather  unclear  and 
variable  from  one  Member  State  to  another,  even 
from one institution to another, depending on the 
extent  to  which  case-law  is  applied,  the  mecha-
nisms  are  understood  and,  finally,  depending  on 
agreed information initiatives.

in  setting  the 

The  proposed  directive, 
legal 
framework created by case-law and making sure 
that it is transposed into all national laws, as well 
as  understandably  insisting  on  the  need  for  full, 
systematic information initiatives, should in part 
remedy this observation.

But the very existence of these two routes for cov-
ering  costs  is  a  factor  that  leads  to  uncertainty 
because the advantages and disadvantages of both 
with regard to the specific situation facing the per-
son concerned are not immediately made known to 
him, are anyway difficult to translate into ex ante fig-
ures and depend on many factors (requirement or 
otherwise for prior authorisation, presence or oth-
erwise of the product or treatment in the healthcare 
basket of the local system and/or in the healthcare 
basket  of  the  system  of  affiliation,  etc.).  Added  to 
this, as far as the second route is concerned, is the 
impossibility  of  predicting  in  advance  what  tariffs 
will be charged by the local professionals, providers 
and establishments.

(b)  Remarkable complexity

Most  of  the  components  are  variable  from  one 
route to the other: the scope of prior authorisation 
(even  though  the  authorisation  system  is  unique), 

Jean-Claude Fillon

the scope of cover of both systems in the place of 
stay and affiliation (drugs covered by one and not 
the other, for example), the obligations in terms of 
range of access to healthcare (different conditions 
laid  down  by  each  of  the  two  systems  for  access 
to non-emergency hospital care, for example), the 
administrative formalities to which the coverage or 
reimbursement of costs are subject.

Such  complexity  is  not  just  reserved  to  patients, 
but  clearly  also  affects  the  institutions,  which  see 
their  management  costs  rise,  the  peak  currently 
being  reached  in  the  event  of  calculating  a  pos-
sible  Vanbraekel  supplement,  not  so  much  due  to 
the  fact  that  its  principle  is  fairly  simple  and  able 
to  be  applied  in  other  sectors  (family  allowances, 
for  example)  as  due  to  the  difficulty  in  gathering, 
identifying and costing the components by which 
it is calculated.

It also derives from the partial nature and often slow 
arrival of the information obtained by the interest-
ed parties, and from the occasional overlapping of 
the mechanisms, whether it is a case, of course, of 
the Vanbraekel supplement mentioned above or of 
the options offered by Article 34 of Regulation (EEC)  
No 574/72 and, before long, by Articles 25 and 26 of 
the new implementation regulation: how does one 
explain  simply  and  clearly  to  insured  persons  that 
both routes may sometimes in this way lead to the 
same financial result? The likely extension of case-
law to care during a stay through the judgment that 
will be given in the Commission v Spain case already 
referred  to  will  not  help,  from  this  viewpoint,  to 
modify this observation.

(c)  A lack of fairness

As stated earlier, the second route, currently neither 
standardised nor controlled, means the patient has 
to  pay  costs  in  advance  and  bear  the  unrestricted 
tariffs that may be higher or very much higher than 
the tariffs set or the costs borne by the social secu-
rity system of the state in which the care is given. It 
also suffers from insufficient, not to say sometimes 

a lack of, information on the procedures by which 
it  is  implemented,  its  consequences  and  the  com-
parative advantages and disadvantages of the two 
routes, on the one hand, and the cross-border sup-
ply of healthcare, on the other.

There  is,  as  a  result,  in  this  second  route,  a  clear 
source  of  flagrant  injustice  between  the  different 
categories  of  patients/insured  persons  according 
to whether or not they have the financial capacity 
to bear the amount of these costs whilst waiting for 
them to be reimbursed, as well as the ancillary costs 
(for transport, accommodation, etc.), which will, of 
course,  be  even  greater  if  long-distance  travel  or 
several  journeys  are  involved  depending  on  how 
phases  of  treatment  are  organised  and  staggered 
over a longer period.

The injustice also comes from the greater or lesser 
ability  of  the  interested  parties  to  obtain  the  rele-
vant  information,  to  be  given  advice,  for  example, 
on how to avoid queuing when resorting to cross-
border  healthcare,  or  even  to  find  out  the  reim-
bursement or coverage tariffs for the two systems, 
that of the place where the care is received and that 
of the place of affiliation.

The tendency has also been noticed of a potential 
facility thus afforded to the most well-off and best-
informed  patients  to  exercise  individual  choices 
beyond  simple  medical  need,  leading  to  the  risk 
of healthcare institutions or healthcare administra-
tion methods having to bear what one might then 
describe as comfort or greater comfort, in spite of 
the possibility offered of setting up a prior authori-
sation system for hospital and similar care.

3.  A ‘social security’ reorientation  

of the second route

Approximation  of  both  routes  also  affords  the 
opportunity  of  partially  remedying  the  disad-
vantages  already  highlighted  of  the  commercial 
approach  to  accessing  healthcare  in  the  second 
route. In keeping with the process of coordinating 

227

50 years of Social Security Coordination 

Past – Present – Future

the laws of the Member States to facilitate the free 
movement of persons and help improve their living 
standard (968), whilst ensuring a high level of health 
protection (969),  it  is  unthinkable  that  one  of  the 
routes offered to patients should lead to their sta-
tus as insured persons being set aside during their 
stay in the state in which the care is to be received, 
both  when  accessing  that  care  and  when  settling 
the associated costs.

This  access  and  settlement  may  be  subject  to  con-
ditions  and  observance  of  a  range  of  healthcare  as 
soon as it is shown to be justified and proportionate 
to the objective to be achieved, but not to the loss 
of status as an insured person. The information that 
the local system’s insured have or should have must 
be made available to them, whilst the professionals, 
providers  and  establishments  required  to  bill  them 
for healthcare products or services must do so at the 
same tariff, at the same cost, as that charged to the 
insured of the local system or borne by that system.

Private,  unrestricted  tariffs  are  not  justified  simply 
because  the  coverage  or  reimbursement  of  these 
costs is, in short, effected directly by the system of 
affiliation  rather  than  the  local  system  acting  on 
behalf of the former with regard to the objectives 
stated  above  and  assigned  to  the  coordination  of 
laws. It is a case of finding, here, a balance between 
free  movement  of  goods  and  services  and  free 
movement of persons (travel by the insured).

This  reorientation  must  also,  to  a  lesser  extent 
since  it  is  necessary  to  respect  —  save  for  volun-
tary  contractual  undertaking  on  their  part  —  the 
independence of these very healthcare profession-
als,  providers  and  establishments  with  regard  to 
the  system  of  a  Member  State  other  than  that  of 
their establishment, allow the systems of the states 

(

(

968

)  See  preamble  (1)  to  Regulation  (EC)  No  883/2004:  ‘The  rules  for 
coordination  of  national  social  security  systems  fall  within  the 
framework  of  free  movement  of  persons  and  should  contribute 
towards  improving  their  standard  of  living  and  conditions  of 
employment.’ 

969

)  See  Article  152(1)  EC,  first  sentence: ‘A  high  level  of  human  health 
protection is (...) ensured in the definition and implementation of all 
Community policies and actions.’

of  affiliation  to  maintain  a  number  of  elements  of 
control  or  implementation  of  regulatory  instru-
ments  when  their  insured  take  this  second  route: 
the assurance that the latter will not submit higher 
invoices for reimbursement as a result of unrestrict-
ed tariffs, the guarantee of conserving for this route 
the cooperation of local institutions on which they 
can  count  for  the  first  route:  information,  control 
of  the  services  provided  by  the  professionals  and 
establishments, patient medical check-ups, etc.

b.  What kind of support,  

what kind of mechanisms?

1. 

The instrument of this coordination

(a)  Directive or regulation

The  issue  of  knowing  what  the  most  appropri-
ate  legal  medium  ought  to  be  —  a  directive 
or  a  regulation,  in  actual  fact  Regulation  (EC)  
No  883/2004  —  for  transposing  CJ  case-law  on 
access  to  cross-border  healthcare  now  no  longer 
arises as it has been resolved in favour of a direc-
tive,  effectively  more  appropriate  for  modifying 
laws  to  make  them  compatible  with  the  rules  of 
the internal market, guaranteeing universal appli-
cation in conformity with this case-law whilst ena-
bling  each  state,  in  order  to  do  this,  to  take  the 
measures appropriate to the nature of its system’s 
operating method.

It now remains to determine the appropriate instru-
ment for coordinating the two routes for accessing 
cross-border healthcare and as much as the directive 
would, this time, be unsuitable for establishing the 
components  of  coordination  that  need  to  remain 
at  Community  level  and  must  not  be  transposed 
into  national  laws,  Regulation  (EC)  No  883/2004  is 
completely  suited  to  its  role  as  the  instrument  for 
coordinating national laws.

In fact, the result of the direct transposition of case-
law or its indirect transposition via the directive is 
to give the national laws a sort of internal module 

228

Jean-Claude Fillon

enabling them to be applied to healthcare received 
in  another  Member  State  (second  route),  without 
prejudice to their parallel application, without this 
module,  but  with  the  aid  of  the  external  module 
contained  in  the  regulation  (first  route). The  regu-
lation  will  coordinate  these  two  routes,  i.e.  the 
national  laws  operating  sometimes  without  their 
internal  Decker-Kohll  module,  sometimes  with  this 
module, by analogy with what it has long done in 
respect of pensions with the notions of a national 
or autonomous pension (sort of analogous second 
route)  and  a  proportionate  or  pro-rated  pension 
(pure construction by the regulation, creating a sort 
of analogous first route).

The grouping of the coordination rules for national 
laws  within  a  single  text  also  makes  it  possible  to 
make both routes and their relationships and inter-
actions safe, and to thus facilitate access by insured 
persons to a single regulation and simplifications.

It must also be pointed out that beyond the techni-
cal challenge of achieving this approximation, this 
new  coordination,  it  will  also  represent  for  Regu-
lation  (EC)  No  883/2004  the  political  challenge  of 
adapting  in  order  to  meet  the  needs  and  achieve 
the objectives referred to earlier (970).

(b)  Legal basis

Whilst the proposal for a directive is based on Arti-
cle  95  EC  which  makes  it  possible  to  adopt  ‘the 
measures  for  the  approximation  of  the  provisions 
laid  down  by  law,  regulation  or  administrative 
action in Member States which have as their object 
the  establishment  and  functioning  of  the  internal 
market’,  but  excluding  ‘the  provisions  relating  to 
the  free  movement  of  persons’,  Regulation  (EC)  
No 883/2004 is, for its part, mainly based on Arti-
cle 42 EC making it possible to adopt, ‘such meas-
ures in the field of social security as are necessary 
to provide freedom of movement for workers’ and 

(

970
) 

J. C. Fillon, ‘Trois défis pour la coordination des systèmes de sécurité 
sociale’  [Three  challenges  for  coordinating  social  security  systems], 
Liaisons Sociales Europe, 2008, No 198, 5–8. 

by  way  of  supplement  to  Article  308  EC,  which 
introduces the possibility of taking ‘the appropriate 
measures’ ‘if action by the Community should prove 
necessary to attain, in the course of the operation 
of the common market, one of the objectives of the 
Community,  and  this  Treaty  has  not  provided  the 
necessary powers’.

It  is  immediately  noticeable  that,  since  the  legal 
basis of the proposal for a directive does not allow 
intervention  in  the  area  of  the  free  movement  of 
persons,  it  also  could  not,  for  that  reason,  bring 
together all the components conducive to coordi-
nating the two routes.

Conversely,  the  regulation  is  able,  on  the  basis  of 
Article 42 EC, to effect this wider coordination due 
to  the  objectives  of  the  said  article,  the  fact  that 
such  coordination  only  relates  to  the  aspect  cov-
ered by the cross-border healthcare social security 
systems and, finally, the fact that it does not have to 
integrate the Decker-Kohll module referred to above 
into national laws, since this action will have been 
implemented by the directive.

In  addition,  the  contribution  of  Article  308  EC  in 
these  circumstances  is  twofold.  It  enables  coordi-
nation  to  be  extended  beyond  workers  alone  and 
thus  to  reach  patients  as  a  whole  coming  under  a 
social  security  system,  this  whole  constituting  the 
personal  scope  of  case-law  and  the  directive,  but, 
by making reference to any action apparently nec-
essary  to  implement,  within  the  operation  of  the 
internal market, one of the Community’s objectives, 
it  guarantees  that  any  component  of  this  wider 
coordination which may only doubtfully fall within 
the province of Article 42 EC would, in case of need, 
have its legal basis in this complementary article.

(c)  Contribution of Regulation (EC) No 883/2004

In its proposal for a directive, the Commission right-
fully emphasises the patient information initiatives 
that  Member  States  must  carry  out  and  stipulates 
that  states  must  set  up  a  national  contact  point 

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network  to  provide  and  publicise  the  necessary 
information and help patients to assert and protect 
their rights.

It must be emphasised that in designating the reg-
ulation as a medium for the measures to coordinate 
the two routes, thus in introducing the second route 
into the scope of Regulation (EC) No 883/2004 and 
its  implementing  regulation,  the  latter  is  afforded 
the benefit of the full logistics of these texts:

to  insured  persons  and  helping  to  make  it 
easier  for  them  to  exercise  their  rights,  an  ad 
hoc committee whose competencies on social 
security will naturally be able to be extended 
to the scope of the second route coordinated 
in the regulation.

2.  Guidelines for approximation

(a)  Proposed objectives

•	

•	

•	

•	

•	

•	

a  network  of  competent  institutions,  in  the 
place  of  stay  or  residence,  designated  institu-
tions  and  liaison  bodies  experienced  in  man-
aging people’s rights and their information on 
those rights;
a  beefed-up  set  of  obligations  and  rules 
on  cooperation,  and  data  and  information 
exchange  between  institutions  and  between 
institutions and beneficiaries;
a  network  under  construction  for  electronic 
data  exchange  between  these  social  security 
institutions, including with the healthcare pro-
fessionals and establishments acting on behalf 
on the local health insurance system: the EESSI 
(‘Electronic  exchange  of  social  security  infor-
mation’) network;
a multilingual information portal on social secu-
rity  rights  and  obligations  and  online  access 
to the services of the national institutions: the 
EULisses  (‘EU  links  and  information  on  social 
security’)  portal,  up  and  running  for  the  pen-
sions sector, under construction for extending 
this to other sectors (healthcare, etc.);
a  document  supporting  rights  of  access  to 
healthcare  during  a  stay:  the  European  health 
insurance  card  (EHIC),  currently  a  paper  docu-
ment,  but  whose  evolution  into  an  electronic 
transaction  card  (eEHIC),  able  to  be  used  for 
planned care, is under consideration;
finally,  with  the  Administrative  Commission, 
a  committee  for  the  monitoring,  interpreta-
tion, resolution of differences and changes in 
the  rules  for  covering  healthcare  with  regard 
to  the  regulation,  for  providing  information 

As mentioned above, the need for legal certainty is 
an argument in favour of approximating and coor-
dinating  the  two  routes,  which  supposes  that  the 
whole  mechanism  is  present  in  a  single  text,  the 
coordinating regulation, and is explicit. The mecha-
nism ought also to be both readable and thus clear 
in the options offered to the interested parties, on 
the  one  hand,  and,  on  the  other,  avoid  provisions 
which duplicate or overlap one another.

This  last  comment  also  ties  in  with  the  require-
ment  for  simplification,  which  should  also  lead 
to  a  mechanism  being  adopted,  one  certainly 
presenting  options,  but  unique  in  its  presenta-
tion  and  logic.  In  particular,  it  may  be  based  on 
the  uniqueness  of  the  prior  authorisation  system 
(authorisation criteria, procedural guarantees and 
cases in which authorisation may not be refused) 
and on the uniqueness of the tariffs used (ex post 
reimbursements as the competent state, notifica-
tion of the tariffs as the state of stay, exploitation 
of the amounts due submitted to the state of affili-
ation as the state of stay).

Simplification  also  supposes  that  the  insured  per-
son can easily, at important stages in the procedure, 
find out whether options are still open to him and, 
if so, what their practical and financial consequenc-
es might be. Similarly, preference must be given to 
direct systems and the use by a covering institution 
of  its  own  tariffs  and  not  those  of  another  institu-
tion. This  also  leads  to  the  search  to  avoid  proce-
dures that award Vanbraekel supplements, without, 
for  all  that,  eating  away  at  the  rights  of  insured 

230

Jean-Claude Fillon

persons, by endeavouring to ensure that the mecha-
nism adopted results in the interested parties being 
offered  the  fullest  cover  in  the  maximum  number 
of  cases  straight  away,  the  supplement  no  longer 
operating except in a very small potential number 
of cases or for very specific situations.

‘Social  security’  reorientation  of  the  second  route 
must  also  result  in  the  insured  being  guaranteed 
that,  regardless  of  his  coverage  option  —  local 
or  in  the  state  of  affiliation  —  the  costs  he  has  to 
pay  to  the  healthcare  professionals,  providers  and 
establishments are billed to him at the social secu-
rity tariff or cost and not according to unrestricted 
tariffs.  This  leads  to  insured  persons  being  issued 
with  a  unique  document  recognising  their  status 
and rights, able to be used regardless of the cover-
age option exercised, in order for the social security 
tariffs  or  costs  to  be  applied,  but  whose  method 
of  use  by  the  healthcare  professional,  provider  or 
establishment may vary according to the coverage 
option chosen.

The European health insurance card, after adapta-
tion if necessary, clearly seems like the proper medi-
um  for  enabling  this  wider  connection  between 
patients  and  healthcare  providers.  The  electronic 
version  of  this  card  currently  under  consideration 
will need to take this extension in its scope of use 
into account.

(b)  Constraints to be observed

It is quite clear that, since case-law on the second 
route is based directly on the articles in the EC Trea-
ty  concerning  the  internal  market,  it  may  not  be 
set aside by a regulation. As a result, the restriction 
imposed on the overall coordinating mechanism to 
be set up is that the insured patient is able, through 
the procedures and options offered by this mecha-
nism, to find the components that currently afford 
him case-law in the event of opting for the second 
route, i.e. to put it plainly, the possibility of obtain-
ing  the  reimbursement  of  his  healthcare  costs  in 
another  Member  State  under  the  conditions  and 

according to the tariffs of the system in the state of 
affiliation  and  without  prior  authorisation  for  care 
other than hospital care (and specialist care within 
the meaning of the proposal for the directive, if that 
is  confirmed  by  case-law  with  the  expected  judg-
ment in the Commission v France case, C-512/08, op. 
cit.). Were it otherwise, the coordinating regulation 
could result in patients losing the rights guaranteed 
to  them  by  their  national  law  pursuant  to  Articles 
28 and 49 EC.

Conversely, the first route, that based on recourse to 
the system of the state in which the care is received, 
is not intended to prevent direct application of the 
national law (second route) and also grants insured 
persons rights that they would not possess without 
the intervention of the regulation. This thus consti-
tutes a means granted by the legislator on the basis 
of  Article  42  EC  with  a  view  to  ensuring  the  free 
movement of workers, which may be accompanied 
by conditions or restrictions (see Inizan judgment, 
op. cit., paras 19 to 23), or even dispensed with in 
favour of other means or mechanisms.

Nevertheless,  both  for  reasons  of  non-regression 
and  the  guaranteeing  of  this  means,  it  appears 
necessary to allow as a second constraint that nei-
ther  should  the  patient  lose  the  components,  the 
facilities,  afforded  to  him  by  this  first  route:  appli-
cation of a law more consistent in terms of quality 
(conditions  of  cover  and  formalities)  and  quantity 
(coverage  tariffs  or  costs)  with  the  provision  of 
local  healthcare  and  the  tariffs  charged  by  profes-
sionals  and  establishment,  easy  access  to  quality 
healthcare, restriction or removal of cases in which 
advance payment of costs is required, etc.

It  would,  moreover,  be  absurd  not  to  take  as  a 
premise in this approximation exercise the reten-
tion of the components making up this first route, 
at the risk otherwise of encountering in the coor-
dinating regulation nothing more in this area than 
a copy of the directive under consideration, there-
fore  of  carrying  out  a  completely  pointless,  fruit-
less exercise.

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3. 

Some components of the mechanism

Thus,  between  these  objectives  and  constraints, 
we  glimpse  the  outlines  of  a  unique  coordinat-
ing  mechanism,  yet  one  that  is  polymorphic,  with 
multiple  choices  or  with  options,  simultaneously 
allowing  for  the  uniqueness  of  the  mechanism, 
the  clarity  and  simplicity  of  the  routes  for  access-
ing covered healthcare and options between these 
routes or along these routes, making it possible to 
retain  the  essential  components  of  both  routes  in 
favour of the patient, the insured person, and at any 
rate guaranteeing him a ‘social security’ approach.

It is not a matter here of describing a hypothetical 
mechanism, but of envisaging one in order to arrive 
at a few constituent components.

(a)  Prior authorisation

Whilst  it  is  accepted  that  the  prior  authorisation 
system  must  be  unique,  the  issue  remains  as  to 
alignment or non-alignment of the scopes of cover 
according to which one finds oneself in a situation 
in  which  the  system  of  the  competent  state  pays 
the costs directly or in a situation in which the sys-
tem of the state in which the care was received pays 
the costs on behalf of the first state.

The readability of the mechanism and its simplicity 
lead us to envisage, with regard to both situations, 
a  single  range  of  healthcare  dependent  on  prior 
authorisation. The  regulation  should  therefore  set 
a definition of this healthcare that would either be 
the one in the directive, or a more restrictive defini-
tion, thus compatible with the constraints resulting 
from cover under the second route.

However, such uniqueness of range is not an obli-
gation  and  we  may  entirely  envisage  for  the  first 
situation  a  range  that  is  equal  to  or  less  than  that 
of  the  directive  and  the  second  route,  and  a  wid-
er  range  for  the  second  situation,  for  example  for 
financial reasons. Thus the overall range of health-
care would be divided up into three sub-sets, one 

for which prior authorisation would be necessary in 
both situations, one for which authorisation would 
be necessary only in the second situation and, final-
ly,  one  for  which  no  authorisation  is  necessary  for 
either  situation.  It  should  be  noted  that  the  latter 
may  be  reduced  to  nothing  if,  as  is  currently  the 
case for planned care, authorisation in the second 
situation is always necessary.

Such divisions would enable institutions, in terms of 
the category of care under consideration, to cover 
their costs according to their own tariffs, but refuse 
to cover them (by refusing authorisation) according 
to the tariffs of the institutions of the place in which 
it was received when the latter are much higher.

Rather, for all that, we might propose envisaging a 
uniqueness of range simultaneously for reasons of 
readability and simplicity (no multiple or multi-fac-
eted lists), but also to ensure that patients are able 
to choose the most appropriate cover, the one most 
suited to the level of costs incurred, in other words 
the  level  of  the  tariffs  and  costs  billed  to  them  by 
healthcare professionals and establishments.

The  mechanism  will,  naturally,  need  to  preserve 
the  rules  common  to  both  routes  according  to 
which  the  authorisation  requested  may  not  be 
refused under specific circumstances in which the 
patient’s state of health and its foreseeable course 
are an issue.

(b)  Coverage tariffs

The  mechanism  must  take  into  account  the  fact 
that, after transposition of the directive, all national 
laws must include tariffs for reimbursement, within 
the  context  of  the  second  route,  of  costs  for  care 
received in the other Member States, tariffs which, 
as  mentioned  earlier,  will  or  must  be  the  same  as 
those applied in the context of the first route.

The implementing regulation of Regulation (EC) No 
883/2004 has already integrated this new situation 
and does not explicitly make the reimbursement by 

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Jean-Claude Fillon

the competent institution to the insured person of 
costs  incurred  in  another  Member  State  depend-
ent on the existence of reimbursement tariffs in the 
regulations  applied  by  that  institution,  their  exist-
ence being taken as established.

In  order  to  meet  the  aforementioned  objectives, 
the  mechanism  should  also  stipulate  that  health-
care  professionals,  providers  and  establishments 
required  to  invoice  products  or  care  to  patients 
proving  their  status  as  insured  persons  in  another 
Member  State,  but  not  applying  for  this  health-
care to be covered by the local system, must make 
out  that  billing  on  the  basis  of  the  tariffs  or  costs 
enforceable on the insured persons of that system 
or borne by that system, unless, of course, they are 
not  registered  or  associated  one  way  or  another 
with the said local system.

(c)  Choice competent law — local law

The constraints mentioned earlier make it compul-
sory to retain this major option in all situations, as 
already  provided  for  by  Articles  25  (care  during  a 
stay)  and  26  (planned  care)  of  the  implementing 
regulation of Regulation (EC) No 883/2004.

Conversely,  the  simplification  objectives  —  for 
insured  persons  as  well  as  for  institutions  —  lead 
to attempts to avoid routinely offering this option 
through  a  choice  to  be  exercised  by  the  person 
concerned,  either  before  receiving  healthcare  or 
afterwards.  In  some  situations,  for  example  when 
the  amount  of  the  costs  is  low  or  when  the  sup-
posed interest of the patient is clear (important dif-
ference and always in the same sense between the 
tariffs or costs borne or reimbursed), it is possible to 
envisage a predetermined option being offered by 
default, nevertheless allowing for the possibility of 
the person concerned choosing the other option.

A  difference  in  range,  as  mentioned  in  point  (a) 
above,  could  also  lead  to  predetermination  of 
choice for healthcare that would be covered direct-
ly by the competent institution at its tariffs without 

prior  authorisation  and  that  would  be  covered  by 
the  institution  of  the  place  of  stay  at  its  tariffs,  on 
behalf of the former institution, with prior authori-
sation. The fact for the insured person of not having 
requested prior authorisation could be considered 
as an option exercised in favour of reimbursement 
at the tariffs of the competent institution.

(d)  Separation care during a temporary stay — 

planned care

This  duality,  unless  any  prior  authorisation  system 
is  dispensed  with,  is  worth  keeping  precisely  to 
guarantee  access  without  prior  authorisation  to 
healthcare  during  a  stay,  as  is  already  the  case  in 
Regulation  (EEC)  No  1408/71  and  Regulation  (EC) 
No 883/2004.

If the CJ in the Commission v Spain case in progress 
(C-211/08) already referred to should state that the 
second route applies all the more to this care, it will 
also be possible to dispense with any prior authori-
sation for it in cases of reimbursement according to 
the tariffs of the competent state.

In fact, it is not possible to see how prior authorisa-
tion could be justified in such cases, even for major, 
cost-intensive treatment, even if the CJ did, in this 
context,  have  to  revive  the  notion  of  emergency 
care, a tighter notion than that of care during a stay. 
In this hypothetical circumstance, which would not 
help to simplify the mechanism we are looking for, 
it would, of course, be possible to envisage setting 
up prior authorisation for this route in the event of 
hospital  or  specialist  care  to  be  defined  that  was 
not, for the person concerned and in the situation 
under study, of an emergency-type nature, despite 
coming under so-called care during a stay.

But in any event, simplification, legal certainty and 
the guarantee of access to local healthcare are argu-
ments in favour of the lack of any prior authorisation 
for all care during a stay, regardless of the option for 
reimbursing the person concerned or covering the 
associated costs.

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(e) 

A simple procedure for minor expenses?

The interest of users makes it possible to envisage 
a simplified procedure for minor expenses, regard-
less  of  the  choices  made  in  other  respects  in  the 
mechanism as a whole, based simply on submitting 
the EHIC, direct settlement by the patient of these 
minor expenses and their — speedy and therefore 
almost automatic — reimbursement by the compe-
tent institution according to its own tariffs.

This type of cost can be determined either by refer-
ence to categories of healthcare or products (sim-
ple  consultation  of  a  practitioner  in  his  surgery, 
standard drugs, etc.), or by reference to a maximum 
amount of costs incurred during the stay, or a com-
bination of both criteria.

Such  a  procedure  would  be  very  helpful,  beyond 
strict  needs,  for  chronic  diseases,  for  example,  or 
long-term  pathological  conditions  (high  blood 
pressure  and/or  diabetes  stabilised  by  medical 
treatment, for example) requiring frequent repeat 
prescriptions  at  a  relatively  low  unit  cost.  But  it 
supposes, for reasons of efficiency and so that the 
patient  does  not  regret  going  through  the  local 
system (an option which ought, even in this hypo-
thetical  case,  to  remain  open?),  that  the  compe-
tent system ensures a high reimbursement rate for 
these costs or that the patient be covered by sup-
plementary private insurance that would operate 
in these cases.

It should be noted, in terms of simplifying things for 
the institutions and restricting operating costs, that 
by its nature such a procedure does not necessitate 
subsequent recourse to an inter-system reimburse-
ment in respect of Article 35 of Regulation (EC) No 
883/2004.

(f )  Containing the Vanbraekel supplement

down to the most minor details and the lack of joint 
tools (such as, to start with, directories of names of 
professionals,  establishments  or  products).  Neither 
is  it  a  question  of  returning  to  this  entitlement  of 
patients to obtain under any circumstance (the need 
for  prior  authorisation  apart)  the  amount  of  reim-
bursement or cover that the competent state would 
grant if the care were received on its territory.

The route that might be explored, since this supple-
ment is hard to manage, would be to act in such a 
way that the patient is encouraged to request the 
benefit as seldom as possible:

•	

•	

whether  by  ensuring  that  the  highest  amount 
of  cover  can  automatically  be  awarded  to  the 
patient  (which  supposes  that  the  competent 
institution is capable of determining in advance 
the  most  profitable  route  for  the  insured  per-
son,  and  to  do  this  systematically  in  a  given 
Member-State-to-Member-State 
relationship 
or more circumstantially, and to inform the lat-
ter of it);
or by creating channels to avoid recourse to this 
supplement, which would, for example, be the 
case  if  a  simple  procedure  such  as  that  envis-
aged in (e) above were set up.

We might equally wonder about the legal feasibility 
of setting a cost threshold below which, given the 
little  advantage  to  the  patient  and  the  significant 
operating  costs  to  be  taken  on,  the  request  for  a 
supplement might not be considered.

(g) Transport costs

The CJ, through a regrettable interpretation in our 
opinion,  but  one  assisted  by  the  use  of  a  double 
meaning of the term ‘benefits in kind’ in Article 22 
of Regulation (EEC) No 1408/71, considered it need-
ed to state in the Watts judgment, op. cit., then in 
the Acereda Herrera judgment (C-466/04):

There is no point here of returning to the difficulties 
of implementing such a supplement, given the dif-
ferences  that  exist  between  national  systems  right 

‘As is confirmed by the second subparagraph of Arti-
cle 22(2) of Regulation No 1408/71, the sole purpose 

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Jean-Claude Fillon

of Article 22(1)(c)(i) of that regulation is to confer on 
patients  covered  by  the  legislation  of  one  Member 
State  and  granted  authorisation  by  the  competent 
institution the right to have access to “treatment” in 
another Member State on conditions for reimburse-
ment as favourable as those enjoyed by patients cov-
ered by the legislation of that other state.

The obligation imposed on the competent institu-
tion by Articles 22 and 36 of Regulation No 1408/71 
therefore relates exclusively to the expenditure con-
nected with the healthcare received by the patient 
in  the  host  Member  State,  namely,  in  the  case  of 
hospital  treatment,  the  cost  of  medical  services 
strictly  defined  and  the  inextricably  linked  costs 
relating to the patient’s stay in the hospital for the 
purposes of his treatment.’

As we know, it immediately added that [since its pur-
pose] ‘is thus not to settle the question of ancillary 
costs, such as the cost of travel and any accommo-
dation other than in the hospital itself, incurred by a 
patient authorised by the competent institution to 
go to another Member State to receive there treat-
ment  appropriate  to  his  state  of  health,  Article  22 
of Regulation No 1408/71 does not make provision 
for, but also does not prohibit, the reimbursement 
of  such  costs’,  to  conclude  that  Article  49  EC  does 
not oblige the competent state to cover the trans-
port  costs,  amongst  other  ancillary  costs,  claimed 
by  a  patient  authorised  to  go  to  another  Member 
State  to  get  hospital  care  there  or  who  has  met 
with a refusal to grant authorisation which is subse-
quently found to be unjustified, that nevertheless, 
the  laws  of  the  competent  Member  State  impose 
on the national system a corresponding obligation 
to  cover  costs  as  far  as  the  treatment  provided  in 
a local establishment falling within the province of 
that system is concerned.

This  interpretation,  with  regard  to  benefits  in 
kind  pursuant  to  Article  22  of  Regulation  (EEC) 
No  1408/71  or  Article  19  of  Regulation  (EC)  No 
883/2004, will be set aside with regard to the latter 
thanks  to  the  addition  in  its  first  article,  through 

the  regulation  in  the  process  of  final  adoption 
amending Regulation (EC) No 883/2004 and deter-
mining the contents of its annexes, of a definition 
with  this  objective  in  view  of  benefits  in  kind  as 
being ‘benefits in kind provided for under the leg-
islation of a Member State which are intended to 
supply,  make  available,  pay  directly  or  reimburse 
the cost of medical care and products and services 
ancillary to that care. This includes long-term care 
benefits in kind’.

But  this  addition,  whilst  it  settles  the  matter  of 
transport costs able to be covered by the institution 
of the place of stay on its territory, if its laws provide 
for this and if it intervenes, does not settle the mat-
ter of transport costs between the competent state 
and the state of stay.

In this regard, it may not seem adequate to refer to 
the content of opposing laws, as recommended by 
the CJ, particularly when travel is not according to 
the patient’s wishes, but takes place out of neces-
sity because he is not able to receive without undue 
delay the care required by his state of health in the 
competent  state.  In  such  cases,  regarding  which 
prior  authorisation,  if  there  is  prior  authorisation, 
may not be refused, it would seem in keeping both 
with  the  principles  of  the  free  movement  of  per-
sons  and  the  fundamental  right  to  access  health-
care, and with the objective of fairness referred to 
above, to envisage an obligation on the competent 
state, regardless of the provisions of its laws, to cov-
er the transport costs associated with the necessary 
travel by the patient, within the limits of the costs 
of transport by the cheapest route compatible with 
his condition.

(h)  Procedure for direct payment by insurers

As  pointed  out  several  times  above,  the  fact  that 
the  patient  has  to  pay  costs  (settle  his  expenses) 
in advance before being able to benefit from reim-
bursement  by  the  competent  institution  is  one  of 
the characteristic features of the second route. But it 
is also one of the sources of injustice that goes with 

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50 years of Social Security Coordination 

Past – Present – Future

that  route,  since  adopting  it,  where  cost-intensive 
treatment  is  involved,  is  reserved  to  patients  who 
have the financial means or are able to obtain the 
financial means to make this advance payment.

But  in  view  of  the  objectives  to  be  attained,  we 
should  consider  that  this  state  of  affairs  is  not 
inevitable and that thought could be paid to rem-
edying it.

By  analogy  with  what  the  CJ  has  established  for 
ancillary  costs,  including  the  transport  costs  con-
sidered  in  the  previous  point,  it  would  not  be 
inconceivable,  where  the  laws  of  the  competent 
state  allow  the  principle  on  national  territory  of 
direct payment by insurers — in the sense of direct 
payment  to  the  establishment,  provider  or  pro-
fessional,  the  creditor  of  the  amount  of  the  costs 
incurred by the insured person, the reimbursement 
amount which is granted to the person concerned 
or  the  amount  of  cover  granted  by  the  system  for 
this healthcare — to extend this option to the ter-
ritory of another Member State, where the compe-
tent  state  reimburses,  according  to  its  own  rates, 
the cost of healthcare received there by one of its 
insured persons. Such an extension could then be 

usefully restricted to hospital care or to care for an 
amount above a threshold to be set.

And, in the same way as for transport costs, beyond 
this, the possibility could be envisaged of creating 
an  obligation  on  the  competent  state,  regardless 
of the options offered by its laws on the matter, of 
directly paying the establishment, provider or pro-
fessional  concerned  the  reimbursement  amount 
it grants to its insured when the latter goes to this 
other Member State out of necessity because he is 
unable to receive the treatment required by his con-
dition without undue delay in the competent state. 
In such cases, let us remember, prior authorisation, 
if there is prior authorisation, may not be refused. 
There could be a twofold restriction on this obliga-
tion:  firstly,  in  respect  of  the  patient,  that  of  find-
ing  himself  in  the  situation  described  above,  and, 
secondly,  in  respect  of  the  costs,  that  they  should 
relate  to  hospital  care  or  be  of  an  amount  higher 
than  a  threshold  to  be  set,  in  such  a  way  that  the 
operating costs generated by such a procedure are 
contained  by  reserving  it  solely  to  those  cases  in 
which the person concerned has no choice, on the 
one hand, and obliging him to make a considerable 
cash advance, on the other.

236

OvERALL  CONCLudiNg  REm ARkS  

Yves Jorens

Yves Jorens
Ghent University (Belgium)

Mr. Yves Jorens (°1968, Antwerp, Belgium) is currently Professor of Social Security 
Law (National and International) and European Social Law, at the Faculty of Law 
of the Ghent University in Belgium. He was a Former Head of an Independent 
Junior Research Group for European and International Social Security Law at the 
Max-Planck-Institute for foreign and international social law, Munich, Germany. 
He wrote a doctoral thesis on the judicial position of non-EU-nationals in Euro-
pean Social security law. Since many years he is working on European social law 
and social policy issues with respect to accession and integration into the Euro-
pean  Union, problems related to international  employment, health policy  and 
health care law. He has done a lot of research on and has a good knowledge and 
understanding of the national social security systems of the EU Member States.

He has a lot of experience of working in many Member States of the Europe-
an Union, in particular the recent Accession Countries as well as connections 
with  social  security  experts  in  many  of  these  countries.  He  is  also  very  active 
in  Southern  Africa  and  in  China.  He  was  expert  and Team  Leader  in  different 
Phare and Consensus programmes on European social law, as well as consultant 
for the Council of Europe. He is consultant for the European Union in different 
domains of European social security and European health care law and policy. 
Yves Jorens is Member and Scientific Mentor of the MISSOC-Secretariat (Mutual 
Information System on Social Protection in the EU). Currently he is also Project 
Director  and  Scientific  Manager  of  the  trESS-project  (Training  and  Reporting 
on European Social Security) commissioned by the European Commission, Em-
ployment, Social Affairs and Equal Opportunities Directorate, dealing with the 
Social Security co-ordination regulations for migrant workers.

During  the  last  two  days,  we  have  been  celebrat-
ing  50  years  of  European  coordination.  This  year, 
50 years have passed since the initial instrument of 
coordination, Regulation No 3, entered into force.

adopted text in the EU and the first real, legal instru-
ment, with due respect to Regulations Nos 1 and 2, 
which dealt respectively with the use of languages 
and the form of the laisser passer to be delivered to 
the Members of the European Parliament.

It has already been mentioned that the free move-
ment  of  persons  is  one  of  the  most  fundamental 
principles  of  the  European  Union.  The  principle 
that is closest to us all. If citizens want to make use 
of  this  freedom  of  movement,  they  must  not  lose 
rights in the field of social protection. This is still the 
basic objective of the regulation framework.

And  there  is  another  reason  why  we  should  cele-
brate. In this year of 50 years of regulation, a com-
pletely  new,  modernised,  simplified  framework, 
Regulation  (EC)  No  883/2004,  has  been  adopted 
and will soon become reality.

The  importance  of  this  objective  can  also  be 
deduced  from  the  fact  that  it  was  the  third  ever 

But  this  entirely  new  form  of  coordination  frame-
work  should  not  be  considered  as  even  a  tempo-
rary  culmination.  That  is  also  the  reason  why  this 

237

50 years of Social Security Coordination 

Past – Present – Future

conference  is  in  one  or  another  way  a  brave  task. 
We are celebrating 50 years, we are celebrating the 
adoption of a new instrument, and at a time when 
this new instrument is not even yet in force, we are 
already discussing forthcoming issues and perhaps 
new adaptations to this framework. But it remains 
essential that the coordination rules keep pace with 
the  evolving  legal  and  societal  context  in  which 
they operate and that the process of modernisation 
and simplification be taken further.

But what can we learn from 50 years of history and, 
in addition, how can we already draw conclusions 
and look ahead?

I  will  only  try  to  focus  on  some  of  the  results  of  
50 years of history and point out some of the main 
challenges. For more details, please refer to the var-
ious written contributions.

No  legislation  is  closer  to  the  everyday  needs  of 
people  than  the  regulation.  The  regulation  is  a 
translation  and  the  expression  of  the  desire  to 
protect  European  citizens  and  to  encourage  their 
mobility.  But  perhaps  no  legislation  is  so  compli-
cated or in such constant need of interpretation as 
the regulations.

Simon Roberts has reminded us of the main rea-
sons and principles behind EC coordination regu-
lations,  and  Rob  Cornelissen  has  looked  back  at 
the important achievements of 50 years of regu-
lation.  The  exclusive  application  of  national  law 
could  have  harmful  consequences  for  people 
moving  from  one  Member  State  to  another.  In 
general,  national  social  security  legislation  fails 
to take into account the specific situation of peo-
ple who have worked or resided in another state. 
National legislations organise their social security 
schemes  according  to  national  objectives.  The 
Community regulations aim to rectify the effects 
of this ‘principle of territoriality’ on migrant work-
ers  and  the  members  of  their  families.  This  pur-
pose has been achieved by numerous provisions in 
the regulations, which have been developed and 

strengthened over the years, such as the exclusive 
and mandatory effect of the rules on conflicts of 
law,  the  aggregation  of  periods  of  insurance  for 
entitlement  to  benefits,  and  the  waiving  of  resi-
dence  clauses  and  cross-border  recognition  of 
facts. Principles that are still valid although some 
of them are under pressure.

The  social  security  systems  of  the  Member  States 
are facing all kinds of challenges. The starting point 
of coordination is to accept the national social secu-
rity  schemes  as  they  are,  with  all  their  differences 
in  benefits,  procedures,  organisation  and  funding. 
Therefore, changes in national systems also have a 
bearing on the coordination of social security form-
ing  the  bridge  between  the  various  schemes.  It  is 
true that the existing coordination system has been 
able to deal with the introduction of a whole set of 
new benefits in the national legislation of the vari-
ous Member States. But we should not forget that 
this  flexibility  has  been  mainly  realised  thanks  to 
the  case-law  of  the  Court  of  Justice  (CJ),  and  not 
because the legislator has adapted the regulations. 
Mr Cornelissen has given us some examples of this 
sometimes fascinating interaction between the CJ 
and the legislature.

Through  different  important  cases,  the  CJ  has 
indeed created progress in the field of these coordi-
nation regulations. The names of people have been 
recorded for eternity.

Sean Van Raepenbusch has shown us that CJ case-
law  on  social  security  coordination  is  extremely 
rich  and  counts  well  over  500  preliminary  rulings, 
making  the  coordination  regulations  arguably  the 
most ‘successful’,  or  if  you  wish,  the  most  conten-
tious  piece  of  Community  legislation. These  cases 
are  the  result  of  a  dialogue  between  the  national 
judges and the CJ.

The role of national judges cannot be overestimat-
ed.  It  is  they  who  feed  the  CJ  with  references  for 
preliminary rulings. So we are happy to have seen 
so many judges among the participants.

238

Yves Jorens

The  CJ  has  indeed  been  in  the  driving  seat  when 
it comes to the development of the social security 
coordination acquired. For 40 years, it has consist-
ently  interpreted  the  regulations’  provisions  in  a 
dynamic and constructive fashion. The CJ has clear-
ly  favoured  a  teleogical  interpretation,  always  tak-
ing  into  account  the  objectives  of  the  regulations 
and their rationale — which ultimately is to foster 
the free movement of persons.

One of the difficulties with which the regulations are 
confronted  is  how  to  translate  and  to  incorporate 
the interpretations and progress made by case-law 
into  this  regulation.  This  is  an  important  but  bur-
densome  task,  as  it  is  a  question  of  making  rights 
accessible  to  European  citizens.  European  legisla-
tion  must  in  that  respect  not  forget  that  precisely 
the free movement of person as interpreted by the 
CJ does not produce a wide variety of options; on 
the contrary, it produces limited room for manoeu-
vre to work out the coordination framework.

But  we  have  also  mentioned  that  the  regulations 
should  follow  societal  changes.  One  of  these  first 
challenges  has  been  pointed  out  by  Eberhard 
Eichenhofer.

The relative autonomy of decentralised entities that 
today  play  a  growing  role  in  social  security  does 
not  mean  that  they  are  insular.  Community  law  is 
addressed to the Member States; these states can-
not evade the commitments imposed on them by 
Community  law,  by  devolving  their  legislative  or 
administrative  powers  to  internal  entities.  Hence, 
regional  systems  of  social  security  of  the  Member 
States are bound by the EC coordinating regulations 
and, therefore, the regional branches of social secu-
rity systems of the Member States must respect all 
the provisions to be found in those regulations. The 
question  as  to  the  extent  to  which  differences  in 
treatment between internal and cross-border cases 
are authorised is not dealt with by EC law; it must be 
tackled in the framework of national law. According 
to this speaker, to the extent that reverse discrimi-
nation would run counter to national constitutional 

law,  less  favourable  treatment  of  purely  internal 
cases  in  relation  to  intra-Community  cases  would 
be unlawful.

Another development at the heart of the regulations 
which  requires  our  attention  is  the  influence  that 
social security is currently receiving from the much 
larger framework represented by competition law, 
the free movement of services, the free movement 
of  goods,  the  free  movement  of  persons,  etc. The 
necessary conclusions should be drawn concerning 
the  actual  consequences  that  this  engenders  for 
the current coordination framework. Social security 
therefore suddenly finds itself once again at the cen-
tre of the political debate, the essential question of 
which is that of the role of social security in relation 
to the welfare state. The dangers are great. Is it that 
‘the rot has set in’ as Jean-Philippe Lhernoud put it 
so  neatly? The  European  legislator  once  again  has 
his feet on the ground, if I may say so. The case-law 
of the CJ concerning free citizenship and the free-
dom  of  movement  of  persons,  as  Eleanor  Spaven-
ta  shows  very  clearly,  has  a  significant  impact  on 
social security benefits apart from the regulations. 
The European Community imposes obligations on 
the Member States which they had not thought of. 
It itself, this is a positive trend. Indeed, the fact is to 
be  welcomed  that,  besides  European  regulations, 
there is a framework on the basis of which citizens 
of the Union can impose their rights and certainly 
where  an  addition  to  existing  rights  is  involved. 
But the danger runs deeper. The CJ has established 
a  new  approach  concerning  the  interpretation  of 
the  link  between  primary  and  secondary  legisla-
tion. Secondary legislation constitutes the basis of 
the rights accorded to the citizens of the Union. If 
the  latter  do  not  satisfy  the  conditions  of  second-
ary legislation, they may have recourse to primary 
legislation which here constitutes a ceiling for their 
rights. In the latter case, the judge should proceed 
to  an  assessment  of  the  actual  circumstances  and 
verify whether the refusal is justified and meets the 
requirement  of  proportionality.  The  great  danger 
lies in the fact that new obligations arise and these 
obligations  go  beyond  the  difficult  compromise 

239

50 years of Social Security Coordination 

Past – Present – Future

achieved within secondary Community law, possi-
bly  after  years  of  negotiation. The  restrictions  and 
points of departure of the regulations are in ques-
tion. Regulations may therefore well have clarified 
rights, but political choices may then possibly con-
stitute a restriction rather than an advantage.

It is therefore not easy, as Jean-Claude Fillon clearly 
shows  in  the  field  of  healthcare,  to  reconcile  the 
two.  For  the  application  of  two  routes  does  not 
necessarily  work  in  parallel  and  leads  to  inevita-
ble  imprecision  for  the  citizen  concerned  as  well 
as  to  problems  of  application  for  the  administra-
tions concerned. The adaptation of the regulations 
to  this  new  trend  will  be  an  extremely  difficult 
but nevertheless necessary task in order to obtain 
greater clarity and protection of citizens’ rights. Fur-
thermore,  the  fact  that  the  second  route  is  often 
characterised by a case method, the result of which 
is  difficult  to  predict  and  that  different  bodies  are 
concerned (such as the various DG), will undoubt-
edly lead to long-term, very, very hard work…

But this trend cannot be considered solely unilater-
ally as a danger and a negative development. This 
development  in  fact  offers  us  the  opportunity  to 
reflect  again  and  to  consider  the  concrete  objec-
tives  of  the  regulations.  Perhaps  this  offers  us  the 
opportunity  to  emphasise  the  role  of  the  regula-
tions  once  again  in  their  capacity  as  instruments 
of European solidarity and thus in becoming — or 
becoming  once  again  —  the  engine  of  European 
social integration of the individuals concerned.

A recurrent problem is that of defining the scope 
of the regulations. Developments within national 
social  security  systems  to  take  account  of  new 
economic or political challenges led to the birth of 
a completely new list of benefits. However, the dis-
cussion is always about the issue of whether these 
benefits were included in the objective scope and, 
in particular, in which chapter. The actual category 
is  of  great  significance  because,  depending  on 
which  chapter  is  applicable,  other  coordination 
rules apply. The final decision is then often taken 

by the CJ. Bernhard Spiegel is right when he says 
that a ‘constant race’ is taking place. Will legislators 
manage to act first? Or will the CJ get there first? 
The very fact that the final decision of the CJ has 
often resulted in necessary outbreaks of sweat ulti-
mately results in consideration being given every 
so  often  to  the  drawing  up  of  a  separate  coordi-
nation  regime.  This  is  because  it  is  realised  that 
the  current  rules  are  not  completely  attuned  to 
the characteristics of these new benefits. As some 
of  these  benefits  are  unknown  in  other  Member 
States, negotiations can be, as Simon as has already 
said, ‘très, très dures’. This is not a new problem but 
one  that  has  existed  from  the  beginning.  Let  us 
consider the example of special, non-contributory 
benefits  and  the  difference  between  social  secu-
rity  and  social  assistance  which  —  even  after  a 
political comparison has been made — has still led 
to a certain resistance in some Member States and 
even  to  special  proceedings  by  the  Commission 
against  the  Council.  Bernhard  Spiegel  and  Maxi-
milian Fuchs have dealt with some of these areas 
in their contributions. Some of their examples also 
follow on from Mr Van Raepenbusch’s proposition 
that, on the one hand, the CJ plays a role as a driv-
ing force, but, on the other, always pronounces a 
judgment in a particular situation, which can then 
have a life all of its own.

Some of the examples they cite also clearly demon-
strate the need to adjust the regulatory framework 
to these new benefits. Let us consider care benefits 
which can only be coordinated with difficulty in the 
current  framework.  Or  let  us  think  of  the  example 
of pension schemes under the second and third pil-
lars. If negotiations reach a satisfactory conclusion, 
this  might  incidentally  be  one  of  the  first  amend-
ments  to  Regulation  (EC)  No  883/2004.  In  view  of 
the  importance  of  these  last  benefits,  this  is  also 
an  important  step,  but  it  is  not  ruled  out  that  in 
future  questions  may  also  be  raised  about  a  divi-
sion of the first and second pillar in the regulation. 
In  his  contributions  on  unemployment  benefits, 
Maximilian Fuchs discusses some important trends 
including  the  combination  of  unemployment  and 

240

Yves Jorens

funding benefits. It cannot be denied that there are 
still some awkward points between the regulation 
and the ambitions of Europe to expand a European 
employment  market.  But  there  is  also  the  trend 
towards  an  active  welfare  state  in  which  social 
security no longer primarily aims to pay cash bene-
fits but would rather avoid having to pay these. This 
active welfare state not only raises questions about 
the  description  of  the  objective  scope  (e.g.  reha-
bilitation benefits, distinction between unemploy-
ment  and  invalidity),  but  also  about  the  concrete 
validity of the regulation which is also problematic 
in this framework, for example in relation to export 
or applicable law.

On many occasions it has indeed been mentioned 
that  developments  in  the  labour  market  have  a 
great  impact  on  the  coordination  framework.  In 
his  contribution,  Paul  Minderhoud  has  described 
the  migration  trends  and  the  new  perspectives.  It 
has  to  be  admitted  that  traditionally,  in  particu-
lar  compared  with  the  USA,  migration  within  the 
EU  remains  rather  limited;  1.2  million  citizens  of 
EU Member States have migrated out of a total of 
almost 500 million. However, he also pointed to the 
new migration patterns, and in particular the idea 
of  circular  migration.  Shorter  terms  of  migration 
also impact the question of integration into the rel-
evant state and the right to benefits. Migrant work-
ers  who  move  for  shorter  terms  have  presumably 
more interest in remaining insured and covered by 
the state of origin than in becoming insured in the 
state where they are going to work. As Yves Jorens 
mentioned,  exactly  these  new  types  of  migration 
also  put  under  pressure  the  actual  framework  of 
the lex loci laboris and, more generally, the general 
principles behind applicable legislation. Important 

questions  need  to  be  asked:  if  it  is  perhaps  not 
time  precisely  in  the  light  of  the  free  movement 
of persons to question the exclusive effect and the 
neutral  effect  of  the  conflicting  rules?  Is  avoiding 
administrative complications what free movement 
is about? What is the interest of the worker?

We  started  our  conference  by  asking  if  we  could 
award a golden medal to our regulation. I think the 
answer is yes. Of the research that has been done 
within  the  framework  of  the Tress  network,  a  net-
work  looking  at  the  implementation  of  the  regu-
lations  throughout  the  different  Member  States, 
the  conclusion  could  be  drawn  that  the  system  is 
working rather well. This may not hide the fact that 
a  number  of  gaps,  shortcomings  and  inconsisten-
cies can always be identified. But whether it would 
deserve  a  diamond  is  something  we  will  only  be 
able to judge in 10 years. We will indeed have to see 
what Regulation (EC) No 883/2004 brings us.

The regulations are an important step towards the 
concrete realisation of European citizenship. In this 
respect  European  citizenship  contributes  to  the 
legitimacy of Europe, offering the necessary social 
protection to persons who have made use of their 
freedom  of  movement,  protecting  the  diversity 
and the specificity of the different Member States. 
The evolution is important and perhaps it confirms 
what Umberto Eco once said, ‘I wish to be a Europe-
an born in Italy’. Over the last two days we may have 
perhaps  wished  to  be  a  European  born  in  Prague, 
this beautiful European capital.

We  would  like  to  thank  all  of  you  for  celebrating 
with us these 50 years of European coordination of 
social security.

241

50 years of Social Security Coordination 

Past – Present – Future

ANNExE : SOmE  PhOTOS   
OF CONFERENCE PARTiCiPANTS

gabriela Pikorova, 

Ivo van der Steen, 

Acting President  
of CA.SS.TM,  
Czech Ministry of Labour 
and Social Affairs (Chair)

Dutch Ministry  
of Foreign Affairs  
(Round table  
of stakeholders)

rolf Schuler, 

jana lovsin, 

Hessisches  
Landessozialgerricht  
(Round table  
of stakeholders)

Slovenian Ministry of 
Labour, Family and Social 
Affair (Round table  
of stakeholders)

Carlos g. de Cortazar, 

bernd Schulte,

Spanish Permanent  
Representation to the EU 
(Round table  
of stakeholders)

Max Planck Institute  
for Foreign and  
International Social Law  
(Round table  
of stakeholders)

herwig verschueren, 

Paul Palsterman, 

University of Antwerp  
and Brussels  
(Round table  
of stakeholders)

ACV - CSC  
(Belgian trade union)  
(Round table  
of stakeholders)

242

Annexe

loes van embden, 

jörg Tagger,

BusinessEurope (Round 
table of stakeholders)

European Commission, 
DG EMPL Unit E/3 (Round 
table of stakeholders)

Ivo van damme, 

Christoph Schumacher, 

Belgian Federation  
of Enterprises (Round 
table of stakeholders)

German Federal Ministry 
of Labour and Social 
Affairs (Round table  
of stakeholders)

dorina Tsotsorou, 

eva lukacs, 

Greek Ministry of 
Employment and Social 
Protection (Round table 
of stakeholders)

jiri kral, 

director General for 
Social and Family 
Policy, Czech Ministry of 
Employment and Social 
Affairs (Closing speech)

Hungarian Ministry  
of Health (Round table  
of stakeholders)

243

European Commission

Fifty years of social security coordination: Past — Present — Future
report of the conference celebrating the 50th anniversary of the european Coordination of Social Security 

Luxembourg: Publications Office of the European Union

2010 — 243 pp. — 21×29.7 cm

ISBN 978-92-79-14867-5
doi 10.2767/94087

In May 2009 a conference marking the 50th anniversary of the European coordination of social security 
was held in Prague, Czech Republic. This report contains the major speeches given during the two-day 
event on topics ranging from the history of social security to cross-border healthcare. 

This publication is available in printed format in English, French and German.