CELEX: 62003CJ0209
Language: en
Date: 2005-03-15
Title: Judgment of the Court (Grand Chamber) of 15 March 2005.#The Queen, on the application of Dany Bidar v London Borough of Ealing and Secretary of State for Education and Skills.#Reference for a preliminary ruling: High Court of Justice (England & Wales), Queen's Bench Division (Administrative Court) - United Kingdom.#Citizenship of the Union - Articles 12 EC and 18 EC - Assistance for students in the form of subsidised loans - Provision limiting the grant of such loans to students settled in national territory.#Case C-209/03.

Case C-209/03
      The Queen, on the application of Dany Bidar
      v
      London Borough of Ealing and Secretary of State for Education and Skills
      (Reference for a preliminary ruling from the High Court of Justice of England and Wales, Queen’s Bench Division (Administrative
         Court))
      
      (Citizenship of the Union – Articles 12 EC and 18 EC – Assistance for students in the form of subsidised loans – Provision limiting the grant of such loans to students settled in national territory)
      Opinion of Advocate General Geelhoed delivered on 11 November 2004 
      Judgment of the Court (Grand Chamber), 15 March 2005 
      Summary of the Judgment
      1.     EC Treaty – Scope of application for the purposes of the prohibition of any discrimination on grounds of nationality – Assistance
            provided to students to cover their maintenance costs – Included – National legislation reserving the grant of such assistance
            to students settled in the national territory – Not possible for students who are nationals of other Member States to be regarded
            as settled – Not permissible
      (Art. 12 EC)
      2.     Preliminary rulings – Interpretation – Temporal effect of interpretative judgments – Retroactive effect – Limits imposed by
            the Court – Conditions – Significance for the Member State concerned of the financial consequences of a judgment – Not decisive
      (Art. 234 EC)
      1.     Assistance, whether in the form of subsidised loans or of grants, provided to students lawfully resident in the host Member
         State to cover their maintenance costs falls within the scope of application of the Treaty for the purposes of the prohibition
         of discrimination laid down in the first paragraph of Article 12 EC.
      
      That provision must be interpreted as precluding national legislation which grants students the right to such assistance only
         if they are settled in the host Member State, while excluding a national of another Member State from obtaining, as a student,
         the status of settled person, even if that national is lawfully resident and has received a substantial part of his secondary
         education in the host Member State and has consequently established a real link with the society of that State.
      
      It is indeed legitimate for a Member State to grant such assistance only to students who have demonstrated a certain degree
         of integration into the society of that State. It cannot, however, require the students concerned to establish a link with
         its employment market. On the other hand, the existence of a certain degree of integration may be regarded as established
         by a finding that the student in question has resided in the host Member State for a certain length of time.
      
      However, by precluding any possibility of a national of another Member State obtaining settled status as a student, that legislation
         makes it impossible for such a national, whatever his actual degree of integration, to enjoy the right to assistance, and
         consequently prevents him from being able to pursue his studies under the same conditions as a national of that State who
         is in the same situation.
      
      (see paras 48, 57-59, 61-63, operative part 1, 2)
      2.     The interpretation the Court gives to a rule of Community law is limited to clarifying and defining the meaning and scope
         of that rule as it ought to have been understood and applied from the time of its coming into force. It follows that the rule
         as thus interpreted may, and must, be applied by the courts even to legal relationships arising and established before the
         judgment ruling on the request for interpretation, provided that in other respects the conditions enabling an action relating
         to the application of that rule to be brought before the courts having jurisdiction are satisfied. It is only exceptionally
         that the Court may, in application of the general principle of legal certainty inherent in the Community legal order, be moved
         to restrict the possibility for any person concerned of relying on a provision it has interpreted with a view to calling in
         question legal relationships established in good faith. The financial consequences which might ensue for a Member State from
         a preliminary ruling do not in themselves justify limiting the temporal effect of the ruling.
      
      (see paras 66-68, operative part 3)

      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
            
            JUDGMENT OF THE COURT (Grand Chamber)15 March 2005(1)
         
         
               (Citizenship of the Union  –  Articles 12 EC and 18 EC  –  Assistance for students in the form of subsidised loans  –  Provision limiting the grant of such loans to students settled in national territory)
               
             In Case C-209/03,REFERENCE for a preliminary ruling under Article 234 EC from the High Court of Justice of England and Wales, Queen's Bench
            Division (Administrative Court), made by decision of 12 February 2003, received at the Court on 15 May 2003, in the proceedings
            
            
            The Queen(on the application of Dany Bidar)
            
            v
            
            London Borough of Ealing,Secretary of State for Education and Skills,
            
            
            
            THE COURT (Grand Chamber),,
            
             composed of V. Skouris, President, P. Jann, C.W.A. Timmermans, A. Rosas, K. Lenaerts (Rapporteur) and A. Borg Barthet, Presidents
            of Chambers, J.‑P. Puissochet, R. Schintgen, N. Colneric, M. Ilešič, J. Malenovský, J. Klučka and U. Lõhmus, Judges,
            
             Advocate General: L.A.Geelhoed,Registrar: H. von Holstein, Deputy Registrar,
             having regard to the written procedure and further to the hearing on 28 September 2004,after considering the observations submitted on behalf of:
            
            –
             Mr Bidar, by R. Scannell and M. Soorjoo, Barristers, and J. Luqmani, Solicitor,
            
            –
             the United Kingdom Government, by R. Caudwell, acting as Agent, E. Sharpston QC and C. Lewis, Barrister,
            
            –
             the Danish Government, by J. Molde, acting as Agent,
            
            –
             the German Government, by C.‑D. Quassowski and A. Tiemann, acting as Agents,
            
            –
             the French Government, by G. de Bergues and C. Bergeot-Nunes, acting as Agents,
            
            –
             the Netherlands Government, by C.M. Wissels and H.G. Sevenster, acting as Agents,
            
            –
             the Austrian Government, by E. Riedl, acting as Agent,
            
            –
             the Finnish Government, by T. Pynnä, acting as Agent,
            
            –
             the Commission of the European Communities, by N. Yerrell and M. Condou, acting as Agents,
            
            
            
            after hearing the Opinion of the Advocate General at the sitting on 11 November 2004,
         gives the following
         
         
         Judgment
         1
            
          This reference for a preliminary ruling concerns the interpretation of the first paragraph of Article 12 EC and Article 18
         EC.
         
         
         
         2
            
          The reference was made in the course of proceedings between Mr Bidar and the London Borough of Ealing and the Secretary of
         State for Education and Skills concerning the refusal of his application for a subsidised student loan to cover his maintenance
         costs.
         
         
            
               Legal background
            Community legislation
         
         3
            
          The first paragraph of Article 12 EC provides:
         ‘Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination
         on grounds of nationality shall be prohibited.’
         
         
         
         4
            
          Article 18(1) EC reads as follows:
         ‘Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject
         to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect.’
         
         
         
         5
            
          Article 149 EC provides:
         ‘1.     The Community shall contribute to the development of quality education by encouraging cooperation between Member States and,
         if necessary, by supporting and supplementing their action, while fully respecting the responsibility of the Member States
         for the content of teaching and the organisation of education systems and their cultural and linguistic diversity.
          2.       Community action shall be aimed at:
         
         
         
          
         –
            developing the European dimension in education, particularly through the teaching and dissemination of the languages of the
               Member States,
            
         
         
         
         
          
         –
            encouraging mobility of students and teachers, by encouraging inter alia, the academic recognition of diplomas and periods
               of study,
            
         
         
         
         
          
         –
            promoting cooperation between educational establishments,
         
         
         
         
          
         –
            developing exchanges of information and experience on issues common to the education systems of the Member States,
         
         
         
         
          
         –
            encouraging the development of youth exchanges and of exchanges of socio-educational instructors,
         
         
         
         
          
         –
            encouraging the development of distance education.
         
         
         …
          4.       In order to contribute to the achievement of the objectives referred to in this Article, the Council:
         
         
         
          
         –
            acting in accordance with the procedure referred to in Article 251, after consulting the Economic and Social Committee and
               the Committee of the Regions, shall adopt incentive measures, excluding any harmonisation of the laws and regulations of the
               Member States,
            
         
         
         
         
          
         –
            acting by a qualified majority on a proposal from the Commission, shall adopt recommendations.’
         
         
         
         
         
         6
            
          Council Directive 90/364/EEC of 28 June 1990 on the right of residence (OJ 1990 L 180, p. 26) provides in Article 1(1) that
         the Member States are to grant the right of residence to nationals of Member States who do not enjoy this right under other
         provisions of Community law and to members of their families, provided that they themselves and the members of their families
         are covered by sickness insurance in respect of all risks in the host Member State and have sufficient resources to avoid
         becoming a burden on that State’s social assistance system during their period of residence.
         
         
         
         7
            
          Under Article 3 of that directive, the right of residence is to remain for as long as the beneficiaries of that right fulfil
         the conditions laid down in Article 1 of the directive.
         
         
         
         8
            
          According to the seventh recital in the preamble to Council Directive 93/36/EEC of 29 October 1993 on the right of residence
         for students (OJ 1993 L 317, p. 59):
         ‘… in the present state of Community law, as established by the case-law of the Court of Justice, assistance granted to students,
         does not fall within the scope of the [EEC] Treaty within the meaning of Article 7 thereof [later Article 6 of the EC Treaty,
         now, after amendment, Article 12 EC]’.
         
         
         
         9
            
          Article 1 of that directive provides:
         ‘In order to lay down conditions to facilitate the exercise of the right of residence and with a view to guaranteeing access
         to vocational training in a non-discriminatory manner for a national of a Member State who has been accepted to attend a vocational
         training course in another Member State, the Member States shall recognise the right of residence for any student who is a
         national of a Member State and who does not enjoy that right under other provisions of Community law, and for the student’s
         spouse and their dependent children, where the student assures the relevant national authority, by means of a declaration
         or by such alternative means as the student may choose that are at least equivalent, that he has sufficient resources to avoid
         becoming a burden on the social assistance system of the host Member State during their period of residence, provided that
         the student is enrolled in a recognised educational establishment for the principal purpose of following a vocational training
         course there and that he is covered by sickness insurance in respect of all risks in the host Member State.’
         
         
         
         10
            
          Article 3 of that directive provides:
         ‘This Directive shall not establish any entitlement to the payment of maintenance grants by the host Member State on the part
         of students benefiting from the right of residence.’
         
         
         
         11
            
          Directives 90/364 and 93/96 were repealed with effect from 30 April 2006 by 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 2004 L 229, p. 35), which, in accordance with Article 40, must be transposed
         by the Member States by 30 April 2006.
         
         National legislation
         
         12
            
          In England and Wales, financial assistance for students to cover maintenance costs is, under the Education (Student Support)
         Regulations 2001 (‘the Student Support Regulations’), provided essentially by means of loans. 
         
         
         
         13
            
          Under the Student Support Regulations, students who are recipients of a loan receive 75% of the maximum amount of the loan,
         while the remaining 25% is granted on the basis of the financial position of the student and of his parents or partner. The
         loan is provided at an interest rate which is linked to the rate of inflation and is therefore below the normal rate for a
         commercial loan. The loan is repayable after the student completes his studies, provided that he is earning in excess of GBP
         10 000. If that is the case, he pays an annual amount equivalent to 9% of the income earned above GBP 10 000, until the loan
         is repaid in full.
         
         
         
         14
            
          Under regulation 4 of the Student Support Regulations, a person is eligible for a student loan for a designated course if
         he falls within one of the situations mentioned in Schedule 1 to those regulations.
         
         
         
         15
            
          Under paragraph 1 of that schedule, a person is eligible to receive a student loan if he is settled in the United Kingdom
         within the meaning of the Immigration Act 1971 and meets the residence conditions referred to in paragraph 8 of the schedule,
         namely:
         
         (a)
            he is ordinarily resident in England and Wales on the first day of the first academic year of the course;
         
         
         (b)
            he has been ordinarily resident throughout the three-year period preceding that day in the United Kingdom and Islands; and
         
         
         (c)
            his residence in the United Kingdom and Islands has not during any part of that three-year period been wholly or mainly for
               the purpose of receiving full-time education.
            
         
         
         
         
         16
            
          As regards migrant workers and members of their families covered by Regulation (EEC) No 1612/68 of the Council of 15 October
         1968 on freedom of movement for workers within the Community (OJ, English Special Edition 1968 (II), p. 475), paragraphs 4
         to 6 of Schedule 1 to the Student Support Regulations do not require them to be settled in the United Kingdom and make their
         eligibility for a student loan subject to the same residence conditions, while considering that they satisfy the condition
         of ordinary residence in paragraph 8(b) of that schedule from the time when they reside in the European Economic Area.
         
         
         
         17
            
          Under the Immigration Act 1971 a person is settled in the United Kingdom if he is ordinarily resident there without being
         subject to any restriction on the period for which he may remain in the territory.
         
         
         
         18
            
          However, it is apparent from the case-file that under United Kingdom law a national of another Member State cannot, in his
         capacity as a student, obtain the status of being settled in the United Kingdom.
         
         
         
         19
            
          As regards tuition fees, the Student Support Regulations provide for financial support on the same conditions for nationals
         of the United Kingdom and those of other Member States.
         
         The main proceedings and the questions referred for a preliminary ruling
         
         20
            
          In August 1998 Mr Bidar, a French national, entered the territory of the United Kingdom, accompanying his mother who was to
         undergo medical treatment there. It is common ground that in the United Kingdom he lived with his grandmother, as her dependant,
         and pursued and completed his secondary education without ever having recourse to social assistance.
         
         
         
         21
            
          In September 2001 he started a course in economics at University College London.
         
         
         
         22
            
          While Mr Bidar received assistance with respect to tuition fees, his application for financial assistance to cover his maintenance
         costs, in the form of a student loan, was refused on the ground that he was not settled in the United Kingdom.
         
         
         
         23
            
          In the proceedings brought by him against that refusal, Mr Bidar submits that, by making the grant of a student loan to a
         national of a Member State conditional on his being settled in the United Kingdom, the Student Support Regulations introduced
         discrimination prohibited under Article 12 EC. He submits, in the alternative, that, even if it were accepted that the provision
         of a grant falls outside the scope of the Treaty, that is not the case with an application for assistance in the form of a
         subsidised loan.
         
         
         
         24
            
          The Secretary of State for Education and Skills, who is the responsible authority for making the Student Support Regulations,
         contends, on the other hand, that the provision of assistance for maintenance costs, whether in the form of a grant or a loan,
         does not fall within the scope of Article 12 EC, as the Court acknowledged in Case 39/86 Lair [1988] ECR 3161 and Case 197/86 Brown [1988] ECR 3205. Even if such assistance were to fall within the scope of the Treaty, the conditions for granting that assistance
         would guarantee the existence of a direct link between the recipient of the assistance and the State which finances it.
         
         
         
         25
            
          The national court observes that student loans represent a cost to the State, because of the reduced rates of interest and
         possible problems with repayment, a cost which the Secretary of State for Education and Skills estimates at the equivalent
         of 50% of the amount of the loans. The average loan made to a student for the academic year 2000/01 is said to be GBP 3 155.
         If the 41 713 nationals of the European Union who studied in England and Wales during that year without being settled there
         had received student loans, the probable cost to the State would thus have been GBP 66 million.
         
         
         
         26
            
          According to the national court, Mr Bidar is not covered by Regulation No 1612/68 and cannot claim any right to a student
         loan on the basis of Directive 93/96.
         
         
         
         27
            
          In those circumstances, the High Court of Justice of England and Wales, Queen’s Bench Division (Administrative Court), decided
         to stay the proceedings and refer the following questions to the Court for a preliminary ruling:
         
         ‘1.
            Whether, given the decisions of the Court of Justice of the European Communities in … Lair … and … Brown … and developments in the law of the European Union, including the adoption of Article 18 EC and developments in relation
               to the competence of the European Union in the field of education, assistance with maintenance costs for students attending
               university courses, such assistance being given by way of either (a) subsidised loans or (b) grants, continues to fall outside
               the scope of the application of the EC Treaty for the purposes of Article 12 EC and the prohibition on discrimination on grounds
               of nationality?
            
         
         
         2.
            If either part of question 1 is answered in the negative, and if assistance with maintenance costs for students in the form
               of grants or loans [does] now fall within the scope of Article 12 EC, what criteria should the national court apply in determining
               whether the conditions governing eligibility for such assistance are based on objectively justifiable considerations not dependent
               on nationality?
            
         
         
         3.
            If either part of question 1 is answered in the negative, whether Article 12 EC may be relied upon to claim entitlement to
               assistance with maintenance costs from a date prior to the date of the judgment of the Court of Justice in the present case
               and, if [not], whether an exception should be made for those who initiated legal proceedings before that date?’
            
         
         
         The questions referred for a preliminary rulingQuestion 1
         
         28
            
          By its first question, the national court asks essentially whether, in the present state of Community law, assistance to students
         in higher education intended to cover their maintenance costs, in the form of a subsidised loan or a grant, falls outside
         the scope of the Treaty, in particular the first paragraph of Article 12 EC.
         
         
         
         29
            
          According to the order for reference, the claimant in the main proceedings is not covered by Regulation No 1612/68.
         
         
         
         30
            
          In that context, the national court wishes to know whether assistance granted to students to cover their maintenance costs
         is within the scope of application of the Treaty within the meaning of the first paragraph of Article 12 EC, which states
         that, without prejudice to any special provisions contained in the Treaty, any discrimination on grounds of nationality is
         prohibited within that scope of application.
         
         
         
         31
            
          To assess the scope of application of the Treaty within the meaning of Article 12 EC, that article must be read in conjunction
         with the provisions of the Treaty on citizenship of the Union. Citizenship of the Union is destined to be the fundamental
         status of nationals of the Member States, enabling those who find themselves in the same situation to receive the same treatment
         in law irrespective of their nationality, subject to such exceptions as are expressly provided for (Case C‑184/99 Grzelczyk [2001] ECR I‑6193, paragraphs 30 and 31, and Case C‑148/02 Garcia Avello [2003] ECR I‑11613, paragraphs 22 and 23).
         
         
         
         32
            
          According to settled case-law, a citizen of the European Union lawfully resident in the territory of the host Member State
         can rely on Article 12 EC in all situations which fall within the scope ratione materiae of Community law (Case C‑85/96 Martínez Sala [1998] ECR I‑2691, paragraph 63, and Grzelczyk, paragraph 32).
         
         
         
         33
            
          Those situations include those involving the exercise of the fundamental freedoms guaranteed by the Treaty and those involving
         the exercise of the right to move and reside within the territory of the Member States, as conferred by Article 18 EC (see
         Case C-274/96 Bickel and Franz [1998] ECR I‑7637, paragraphs 15 and 16, Grzelczyk, paragraph 33, and Garcia Avello, paragraph 24).
         
         
         
         34
            
          Moreover, there is nothing in the text of the Treaty to suggest that students who are citizens of the Union, when they move
         to another Member State to study there, lose the rights which the Treaty confers on citizens of the Union (Grzelczyk, paragraph 35).
         
         
         
         35
            
          As is apparent from Case C‑224/98 D’Hoop [2002] ECR I‑6191, paragraphs 29 to 34, a national of a Member State who goes to another Member State and pursues secondary
         education there exercises the freedom to move guaranteed by Article 18 EC.
         
         
         
         36
            
          Furthermore, a national of a Member State who, like the claimant in the main proceedings, lives in another Member State where
         he pursues and completes his secondary education, without it being objected that he does not have sufficient resources or
         sickness insurance, enjoys a right of residence on the basis of Article 18 EC and Directive 90/364.
         
         
         
         37
            
          With regard to social assistance benefits, the Court held in Case C‑456/02 Trojani [2004] ECR I‑0000, paragraph 43, that a citizen of the Union who is not economically active may rely on the first paragraph
         of Article 12 EC where he has been lawfully resident in the host Member State for a certain time or possesses a residence
         permit.
         
         
         
         38
            
          It is true that the Court held in Lair and Brown (paragraphs 15 and 18 respectively) that ‘at the present stage of development of Community law assistance given to students
         for maintenance and for training falls in principle outside the scope of the EEC Treaty for the purposes of Article 7 thereof
         [later Article 6 of the EC Treaty, now, after amendment, Article 12 EC]’. In those judgments the Court considered that such
         assistance was, on the one hand, a matter of education policy, which was not as such included in the spheres entrusted to
         the Community institutions, and, on the other, a matter of social policy, which fell within the competence of the Member States
         in so far as it was not covered by specific provisions of the EEC Treaty.
         
         
         
         39
            
          However, since judgment was given in Lair and Brown, the Treaty on European Union has introduced citizenship of the Union into the EC Treaty and added to Title VIII (now Title
         XI) of Part Three a Chapter 3 devoted inter alia to education and vocational training (Grzelczyk, paragraph 35).
         
         
         
         40
            
          Thus Article 149(1) EC gives the Community the task of contributing to the development of quality education by encouraging
         cooperation between Member States and, if necessary, by supporting and supplementing their action, while fully respecting
         the responsibility of those States for the content of teaching and the organisation of education systems and their cultural
         and linguistic diversity.
         
         
         
         41
            
          Under paragraphs 2 and 4 of that article, the Council may adopt incentive measures, excluding any harmonisation of the laws
         and regulations of the Member States, and recommendations aimed in particular at encouraging the mobility of students and
         teachers (see D’Hoop, paragraph 32).
         
         
         
         42
            
          In view of those developments since the judgments in Lair and Brown, it must be considered that the situation of a citizen of the Union who is lawfully resident in another Member State falls
         within the scope of application of the Treaty within the meaning of the first paragraph of Article 12 EC for the purposes
         of obtaining assistance for students, whether in the form of a subsidised loan or a grant, intended to cover his maintenance
         costs.
         
         
         
         43
            
          That development of Community law is confirmed by Article 24 of Directive 2004/38, which states in paragraph 1 that all Union
         citizens residing in the territory of another Member State on the basis of that directive are to enjoy equal treatment ‘within
         the scope of the Treaty’. In that the Community legislature, in paragraph 2 of that article, defined the content of paragraph
         1 in more detail, by providing that a Member State may in the case of persons other than workers, self-employed persons, persons
         who retain such status and members of their families restrict the grant of maintenance aid in the form of grants or loans
         in respect of students who have not acquired a right of permanent residence, it took the view that the grant of such aid is
         a matter which, in accordance with Article 24(1), now falls within the scope of the Treaty.
         
         
         
         44
            
          That interpretation is not invalidated by the argument put forward by the governments which have submitted observations and
         by the Commission concerning the limitations and conditions referred to in Article 18 EC. Those governments and the Commission
         observe that, while citizenship of the Union enables nationals of the Member States to rely on the first paragraph of Article
         12 EC when they exercise the right to move and reside within the territory of those States, their situation falls within the
         scope of application of the Treaty within the meaning of Article 12 EC only, in accordance with Article 18(1) EC, subject
         to the limitations and conditions laid down in the Treaty and by the measures adopted to give it effect, which include those
         laid down by Directive 93/96. Since Article 3 of that directive excludes the right to payment of maintenance grants on the
         part of students benefiting from the right of residence, those grants are still outside the scope of the Treaty.
         
         
         
         45
            
          In this respect, it is indeed the case that students who go to another Member State to start or pursue higher education there
         and enjoy a right of residence there for that purpose under Directive 93/96 cannot base any right to payment of maintenance
         assistance on that directive.
         
         
         
         46
            
          However, Article 3 of Directive 93/96 does not preclude a national of a Member State who, by virtue of Article 18 EC and Directive
         90/364, is lawfully resident in the territory of another Member State where he intends to start or pursue higher education
         from relying during that residence on the fundamental principle of equal treatment enshrined in the first paragraph of Article
         12 EC.
         
         
         
         47
            
          In a context such as that of the main proceedings where the right of residence of the applicant for assistance is not contested,
         the assertion, made by some of the governments which have submitted observations, that Community law allows a Member State
         to take the view that a national of another Member State who has recourse to social assistance no longer fulfils the conditions
         of his right of residence and if appropriate to take measures, within the limits imposed by Community law, for the removal
         of that national (see Grzelczyk, paragraph 42, and Trojani, paragraph 45) is moreover immaterial.
         
         
         
         48
            
          In the light of all the foregoing, the answer to Question 1 must be that assistance, whether in the form of subsidised loans
         or of grants, provided to students lawfully resident in the host Member State to cover their maintenance costs falls within
         the scope of application of the Treaty for the purposes of the prohibition of discrimination laid down in the first paragraph
         of Article 12 EC.
         
         Question 2
         
         49
            
          By its second question, the national court seeks to know the criteria which a national court must apply to determine whether
         the conditions of granting assistance to cover the maintenance costs of students are based on objective considerations independent
         of nationality.
         
         
         
         50
            
          For this purpose it should first be examined whether the legislation at issue in the main proceedings distinguishes on the
         ground of nationality between students who apply for such assistance.
         
         
         
         51
            
          It must be recalled here that the principle of equal treatment prohibits not only overt discrimination based on nationality
         but also all covert forms of discrimination which, by applying other distinguishing criteria, lead in fact to the same result
         (see, inter alia, Case 152/73 Sotgiu [1974] ECR 153, paragraph 11; Case C‑57/96 Meints [1997] ECR I‑6689, paragraph 44; and Case C‑212/99 Commission v Italy [2001] ECR I‑4923, paragraph 24).
         
         
         
         52
            
          As regards persons not covered by Regulation No 1612/68, paragraph 1 of Schedule 1 to the Student Support Regulations requires,
         for the grant to students of assistance to cover their maintenance costs, that the person concerned is settled in the United
         Kingdom for the purposes of national law and satisfies certain residence conditions, namely that of residing in England and
         Wales on the first day of the first academic year and that of having resided in the United Kingdom and Islands for the three
         years preceding that day.
         
         
         
         53
            
          Such requirements risk placing at a disadvantage primarily nationals of other Member States. Both the condition requiring
         an applicant for that assistance to be settled in the United Kingdom and that requiring him to have resided there prior to
         his studies are likely to be more easily satisfied by United Kingdom nationals.
         
         
         
         54
            
          Such a difference in treatment can be justified only if it is based on objective considerations independent of the nationality
         of the persons concerned and is proportionate to the legitimate aim of the national provisions (see Bickel and Franz, paragraph 27, D’Hoop, paragraph 36, and Garcia Avello, paragraph 31).
         
         
         
         55
            
          According to the United Kingdom Government, it is legitimate for a Member State to ensure that the contribution made by parents
         or students through taxation is or will be sufficient to justify the provision of subsidised loans. It is also legitimate
         to require a genuine link between the student claiming assistance to cover his maintenance costs and the employment market
         of the host Member State.
         
         
         
         56
            
          On this point, it must be observed that, although the Member States must, in the organisation and application of their social
         assistance systems, show a certain degree of financial solidarity with nationals of other Member States (see Grzelczyk, paragraph 44), it is permissible for a Member State to ensure that the grant of assistance to cover the maintenance costs
         of students from other Member States does not become an unreasonable burden which could have consequences for the overall
         level of assistance which may be granted by that State.
         
         
         
         57
            
          In the case of assistance covering the maintenance costs of students, it is thus legitimate for a Member State to grant such
         assistance only to students who have demonstrated a certain degree of integration into the society of that State.
         
         
         
         58
            
          In this context, a Member State cannot, however, require the students concerned to establish a link with its employment market.
         Since the knowledge acquired by a student in the course of his higher education does not in general assign him to a particular
         geographical employment market, the situation of a student who applies for assistance to cover his maintenance costs is not
         comparable to that of an applicant for a tideover allowance granted to young persons seeking their first job or for a jobseeker’s
         allowance (see, in this regard, D’Hoop, paragraph 38, and Case C‑138/02 Collins [2004] ECR I‑0000, paragraph 67, respectively).
         
         
         
         59
            
          On the other hand, the existence of a certain degree of integration may be regarded as established by a finding that the student
         in question has resided in the host Member State for a certain length of time.
         
         
         
         60
            
          With respect to national legislation such as the Student Support Regulations, the guarantee of sufficient integration into
         the society of the host Member State follows from the conditions requiring previous residence in the territory of that State,
         in this case the three years’ residence required by the United Kingdom rules at issue in the main proceedings.
         
         
         
         61
            
          The additional condition that students are entitled to assistance to cover their maintenance costs only if they are also settled
         in the host Member State could admittedly, like the requirement of three years’ residence referred to in the preceding paragraph,
         correspond to the legitimate aim of ensuring that an applicant for assistance has demonstrated a certain degree of integration
         into the society of that State. However, it is common ground that the rules at issue in the main proceedings preclude any
         possibility of a national of another Member State obtaining settled status as a student. They thus make it impossible for
         such a national, whatever his actual degree of integration into the society of the host Member State, to satisfy that condition
         and hence to enjoy the right to assistance to cover his maintenance costs. Such treatment cannot be regarded as justified
         by the legitimate objective which those rules seek to secure.
         
         
         
         62
            
          Such treatment prevents a student who is a national of a Member State and who is lawfully resident and has received a substantial
         part of his secondary education in the host Member State, and has consequently established a genuine link with the society
         of the latter State, from being able to pursue his studies under the same conditions as a student who is a national of that
         State and is in the same situation.
         
         
         
         63
            
          The answer to Question 2 must accordingly be that the first paragraph of Article 12 EC must be interpreted as precluding national
         legislation which grants students the right to assistance covering their maintenance costs only if they are settled in the
         host Member State, while precluding a national of another Member State from obtaining the status of settled person as a student
         even if that national is lawfully resident and has received a substantial part of his secondary education in the host Member
         State and has consequently established a genuine link with the society of that State.
         
         Question 3
         
         64
            
          By its third question, the national court asks the Court whether, if the Court were to rule that assistance to cover the maintenance
         costs of students falls within the scope of application of the Treaty within the meaning of the first paragraph of Article
         12 EC, the effects of such a judgment should be limited in time.
         
         
         
         65
            
          The United Kingdom, German and Austrian Governments request the Court, should it so rule, to limit in time the effects of
         its judgment, except as regards judicial proceedings brought before the date of that judgment. In support of their request,
         they rely in particular on the financial implications raised by the national court.
         
         
         
         66
            
          It should be recalled that the interpretation the Court gives to a rule of Community law is limited to clarifying and defining
         the meaning and scope of that rule as it ought to have been understood and applied from the time of its coming into force.
         It follows that the rule as thus interpreted may, and must, be applied by the courts even to legal relationships arising and
         established before the judgment ruling on the request for interpretation, provided that in other respects the conditions enabling
         an action relating to the application of that rule to be brought before the courts having jurisdiction are satisfied (see
         Case 61/79 Denkavit italiana [1980] ECR 1205, paragraph 16, and Case 24/86 Blaizot [1988] ECR 379, paragraph 27).
         
         
         
         67
            
          It is only exceptionally that the Court may, in application of the general principle of legal certainty inherent in the Community
         legal order, be moved to restrict the possibility for any person concerned of relying on a provision it has interpreted with
         a view to calling in question legal relationships established in good faith (see Blaizot, paragraph 28; Case C‑163/90 Legros and Others [1992] ECR I‑4625, paragraph 30; and Case C‑262/96 Sürül [1999] ECR I‑2685, paragraph 108).
         
         
         
         68
            
          Moreover, it is settled case-law that the financial consequences which might ensue for a Member State from a preliminary ruling
         do not in themselves justify limiting the temporal effect of the ruling (see, inter alia, Grzelczyk, paragraph 52).
         
         
         
         69
            
          The Court has taken that step only in quite specific circumstances, where there was a risk of serious economic repercussions
         owing in particular to the large number of legal relationships entered into in good faith on the basis of rules considered
         to be validly in force and where it appeared that both individuals and national authorities had been led into adopting practices
         which did not comply with Community legislation by reason of objective, significant uncertainty regarding the implications
         of Community provisions, to which the conduct of other Member States or the Commission may even have contributed (see Grzelczyk, paragraph 53).
         
         
         
         70
            
          In the present case, it suffices to state that the information provided by the United Kingdom, German and Austrian Governments
         is not capable of supporting their argument that this judgment might, if its effects were not limited in time, entail significant
         financial consequences for the Member States. The figures referred to by those governments in fact relate also to cases which
         are not similar to that at issue in the main proceedings.
         
         
         
         71
            
          Consequently, the answer to Question 3 must be that there is no need to limit the temporal effects of the present judgment.
         
         
         Costs
         72
            
          Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court,
         the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs
         of those parties, are not recoverable.
         
         
         
         
         
         
            
            
         
         
          On those grounds, the Court (Grand Chamber) rules as follows:
         
            
            
             
               1.
                  Assistance, whether in the form of subsidised loans or of grants, provided to students lawfully resident in the host Member
                     State to cover their maintenance costs falls within the scope of application of the EC Treaty for the purposes of the prohibition
                     of discrimination laid down in the first paragraph of Article 12 EC.
                  
               
            
            
            
             
               2.
                  The first paragraph of Article 12 EC must be interpreted as precluding national legislation which grants students the right
                     to assistance covering their maintenance costs only if they are settled in the host Member State, while precluding a national
                     of another Member State from obtaining the status of settled person as a student even if that national is lawfully resident
                     and has received a substantial part of his secondary education in the host Member State and has consequently established a
                     genuine link with the society of that State.
                  
               
            
            
            
             
               3.
                  There is no need to limit the temporal effects of the present judgment.
               
            
            [Signatures]
      
      
          1 –
            
            Language of the case: English.