European Commission v Republic of Austria.
Date: 2012-10-04
38. As the Court has held on numerous occasions, the status of citizen of the Union is destined to be the fundamental status of nationals of the Member States, enabling those among such nationals who find themselves in the same situation to receive, as regards the material scope of the FEU Treaty, the same treatment in law irrespective of their nationality, subject to such exceptions as are provided for in that regard (see, to that effect, Case C-184/99 Grzelczyk  [2001] ECR I-6193, paragraph 31, and Case C-224/98 D’Hoop  [2002] ECR I-6191, paragraph 28).
39. Every citizen of the Union may therefore rely on Article 18 TFEU, which prohibits any discrimination on grounds of nationality, in all situations falling within the scope ratione materiae of EU law, and those situations include the exercise of the freedom conferred by Article 21 TFEU to move and reside within the territory of the Member States (see Case C-85/96 Martínez Sala  [1998] ECR I-2691, paragraph 63; Case C-209/03 Bidar  [2005] ECR I-2119, paragraphs 32 and 33; and Case C-158/07 Förster  [2008] ECR I-8507, paragraphs 36 and 37; and Case C-73/08 Bressol and Others  [2010] ECR I-2735, paragraph 31).
40. In addition, it is apparent from that case-law that that prohibition also covers situations concerning the conditions of access to vocational training, and that both higher education and university education constitute vocational training ( Bressol and Others , paragraph 32).
41. It follows that a national of a Member State who is studying in Austria may rely on the right, enshrined in Articles 18 TFEU and 21 TFEU, to move and reside freely within the territory of the host Member State, without being subject to direct or indirect discrimination on grounds of their nationality ( Bressol and Others , paragraph 33).
42. Regarding the issue whether reduced transport fares such as those granted by certain Länder in Austria come within the scope of the Treaties for the purposes of Article 18(1) TFEU, it should be observed that, in holding that access to training comes within the scope of EU law, the Court has held previously that national aid granted to students to cover their maintenance costs, social benefits provided for by a national, non-contributory scheme and so-called tideover allowances provided for by national legislation intended for unemployed youth seeking their first employment all come within the scope thereof (see Bidar , paragraph 42; Grzelczyk , paragraph 46, and D’Hoop , paragraphs 34 and 35).
43. It follows that a scheme providing for reduced transport fares for students comes within the scope of the FEU Treaty in so far as it enables them, directly or indirectly, to cover their maintenance costs.
44. As to the Republic of Austria’s argument to the effect that the reduced transport fares should be considered a family benefit for the purposes of Regulation No 1408/71, it should be observed that, even if the conflict rules laid down in that regulation do apply to citizens of the Union pursuing their studies in a Member State other than their Member State of origin and whose parents have no link with the host Member State, categorising the reduced fares in this manner still does not justify unequal treatment on grounds of nationality in respect of those citizens.
45. It should be borne in mind, first of all, that certain benefits coming within the specific scope of Regulation No 1408/71 have been held by the Court also to constitute social benefits or advantages subject to the principle of equal treatment on grounds of nationality under other provisions of EU law relating to the free movement of persons (see, to that effect, Martínez Sala , paragraph 27).
46. Second, it must be pointed out that Regulation No 1408/71 does not set up a common scheme of social security, but allows different national social security schemes to exist. Its sole objective is to ensure the coordination of those schemes (Case C-503/09 Stewart  [2011] ECR I-6497, paragraph 75 and the case-law cited).
47. Although Member States retain the power to organise their social security schemes, with the result that, in the absence of harmonisation at EU level, it is for them to determine the conditions concerning the right or duty to be insured with a social security scheme as well as the conditions for entitlement to benefits, in exercising those powers, they must none the less comply with the law of the European Union and, in particular, with the provisions of the FEU Treaty giving every citizen of the Union the right to move and reside within the territory of the Member States ( Stewart , paragraphs 75 to 77 and the case-law cited).
49. It should be recalled in that regard that the principle of non-discrimination on grounds of nationality, enshrined as a general principle in Article 18 TFEU and laid down specifically in respect of Union citizens coming within the scope of Directive 2004/38 in Article 24 thereof, prohibits not only direct discrimination on grounds of nationality but also all indirect forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result (see Bressol and Others , paragraph 40).
51. Such inequality of treatment is contrary to the principles which underpin the status of citizen of the Union, referred to in paragraph 38 of this judgment, that is, the guarantee of the same treatment in law in the exercise of the citizen’s freedom of movement ( D’Hoop , paragraph 35).
52. According to settled case-law, indirect discrimination on grounds of nationality 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 objective of the national provisions (see D’Hoop , paragraph 36; Case C-147/03 Commission  v Austria  [2005] ECR I-5969, paragraph 48; and Bressol and Others , paragraph 41).
54. Since Article 24(2) is a derogation from the principle of equal treatment provided for in Article 18 TFEU, of which Article 24(1) of Directive 2004/38 is merely a specific expression, it must be interpreted narrowly.
55. Although, as evidenced by paragraph 43 of the present judgment, the reduced transport fares granted to the students concerned constitute maintenance aid for them, only maintenance aid for studies ‘consisting in student grants or student loans’ come within the derogation from the principle of equal treatment provided for in Article 24(2) of Directive 2004/38.
56. Any other interpretation of that provision would run counter to not only its wording but also to the Court’s obligation to interpret that derogation in accordance with the provisions of the Treaty, including those relating to Union citizenship (see, to that effect, Joined Cases C-22/08 and C-23/08 Vatsouras and Koupatantze  [2009] ECR I-4585, paragraph 44).
59. In so far as the Republic of Austria’s argument is intended to question whether there is an obligation on a host Member State to finance students who are not integrated there, it should be borne in mind that the Court has held previously, in respect of the provisions relating to Union citizenship, that it is legitimate for a host Member State to wish to ensure that there is a genuine link between a claimant to a benefit and the competent Member State (see, to that effect, D’Hoop , paragraph 38; Case C-138/02 Collins  [2004] ECR I-2703, paragraph 67; Bidar , paragraph 57; and Vatsouras and Koupatantze , paragraph 38).
60. Although EU law relating to the free movement of persons and, in particular, students, allows for a certain degree of financial solidarity as amongst nationals of the host Member State and nationals of other Member States (see, to that effect, Grzelczyk , paragraph 44), as stated in recital 10 in the preamble to Directive 2004/38, persons exercising their right of residence, including students, should not become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, under Article 21 TFEU and the provisions of Directive 2004/38, the right of residence for Union citizens and their family members for periods in excess of three months is subject to conditions.
62. It should be observed, however, first, that the proof required to demonstrate the genuine link must not be too exclusive in nature or unduly favour an element which is not necessarily representative of the real and effective degree of connection between the claimant to reduced transport fares and the Member State where the claimant pursues his studies, to the exclusion of all other representative elements (see, to that effect, D’Hoop , paragraph 39, and Stewart , paragraph 95).
63. Second, as the Advocate General has noted in point 76 of her Opinion, the genuine link required between the student claiming a benefit and the host Member State need not be fixed in a uniform manner for all benefits, but should be established according to the constitutive elements of the benefit in question, including its nature and purpose or purposes. The objective of the benefit must be analysed according to its results and not according to its formal structure (see, to that effect, Vatsouras and Koupatantze , paragraphs 41 and 42).