Elodie Giersch and Others v État du Grand-Duché de Luxembourg.
Date: 2013-06-20
5. Financial aid from the State for higher education studies is governed by the Law of 22 June 2000 on State financial aid for higher education ( Mémorial  A 2000, p. 1106), as amended by the Law of 26 July 2010 ( Mémorial  A 2010, p. 2040) (‘the amended Law of 22 June 2000’).
12. Ms Giersch and Ms Hodin and Mr Taminiaux reside in Belgium and stated their intention of pursuing their studies in that Member State in the course of the 2010/2011 academic year. Mr Stemper resides in Germany and stated his intention of pursuing studies in the United Kingdom.
26. Referring to paragraph 23 of Case C-3/90 Bernini [1992] ECR I-1071, the tribunal administratif notes in addition that, according to the case-law of the Court, aid granted for maintenance and education in order to pursue university studies evidenced by a professional qualification constitutes for the student who benefits therefrom a social advantage within the meaning of Article 7(2) of Regulation No 1612/68.
27. Equally, according to the referring court, which refers to paragraph 24 of Case C-212/05 Hartmann [2007] ECR I-6303, the financing of studies granted by a Member State to the children of workers constitutes, for a migrant worker, or for a frontier worker, a social advantage within the meaning of Article 7(2) of Regulation No 1612/68, where the worker continues to support the child concerned. In such a case, the national courts points out that, in conformity with paragraph 28 of Bernini , that child may rely upon Article 7(2) of Regulation No 1612/68 in order to obtain study finance under the same conditions as are applicable to the children of national workers, equal treatment pursuant to Article 7(2) of Regulation No 1612/68 also being intended to prevent discrimination to the detriment of descendants dependent on the worker.
30. Third, in so far as the existence of indirect discrimination is concerned, the tribunal administratif notes that the principle of equal treatment prohibits all forms of covert discrimination which, by applying other criteria of differentiation, in fact lead to the same result. Referring to paragraph 53 of Case C-209/03 Bidar  [2005] ECR I‑2119, the tribunal administratif states that a residence requirement, since it may primarily place nationals of other Member States at a disadvantage, because it is likely to be more easily satisfied by Luxembourg nationals could, in that context, be regarded as discriminatory.
34. In that regard, it must be borne in mind that Article 45(2) TFEU expressly provides that freedom of movement for workers is to entail the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment.
35. Article 7(2) of Regulation No 1612/68 is the particular expression, in the specific area of the grant of social advantages, of the principle of equal treatment enshrined in Article 45(2) TFUE, and must be accorded the same interpretation as that provision (Case C-287/05 Hendrix  [2007] ECR I‑6909, paragraph 53).
37. That provision equally benefits both migrant workers resident in a host Member State and frontier workers employed in that Member State while residing in another Member State (Case C-213/05 Geven  [2007] ECR I-6347, paragraph 15, and Case C-542/09 Commission  v Netherlands  [2012] ECR I-0000, paragraph 33).
38. According to settled case-law, assistance granted for maintenance and education in order to pursue university studies evidenced by a professional qualification constitutes a social advantage within the meaning of Article 7(2) of Regulation No 1612/68 (Case 39/86 Lair [1988] ECR 3161, paragraph 24, and Commission  v Netherlands  paragraph 34).
39. The Court has also held that study finance granted by a Member State to the children of workers constitutes, for the migrant worker, a social advantage within the meaning of Article 7(2) of Regulation No 1612/68, where the worker continues to support the child ( Bernini , paragraphs 25 and 29; Case C-337/97 Meussen  [1999] ECR I-3289, paragraph 19; and Commission v Netherlands , paragraph 35).
40. The members of a migrant worker’s family are the indirect recipients of the equal treatment granted to the worker under Article 7(2) of Regulation No 1612/68. Since the grant of funding for studies to a child of a migrant worker constitutes a social advantage for the migrant worker, the child may himself rely on that provision in order to obtain that funding if, under national law, such funding is granted directly to the student (Case 316/85 Lebon  [1987] ECR 2811, paragraphs 12 and 13; Bernini  paragraph 26; and Commission  v Netherlands , paragraph 48).
41. The Court has also consistently held that the equal treatment rule laid down both in Article 45 TFEU and in Article 7 of Regulation No 1612/68 prohibits not only overt discrimination by reason of nationality but also all covert forms of discrimination which, by the application of other distinguishing criteria, lead in fact to the same result (see Case C-57/96 Meints  [1997] ECR I-6689, paragraph 44; C-147/03 Commission v Austria  [2005] ECR I‑5969, paragraph 41; Case C‑269/07 Commission  v Germany  [2009] ECR I-7811, paragraph 53; and Commission  v Netherlands , paragraph 37).
44. By contrast, in so far as it provides for a distinction based on residence, a measure such as that at issue in the main proceedings is liable to operate mainly to the detriment of nationals of others Member States, as non-residents are in the majority of cases foreign nationals (see, inter alia, Case C-224/97 Ciola  [1999] ECR I-2517, paragraph 14; Case C‑382/08 Neukirchinger  [2011] ECR I-139, paragraph 34; and Commission  v Netherlands , paragraph 38).
45. In that context, it is immaterial whether, in some circumstances, the contested measure affects, as well as nationals of other Member States, nationals of the Member State in question who are unable to meet such a criterion. In order for a measure to be treated as being indirectly discriminatory, it is not necessary for it to have the effect of placing all the nationals of the Member State in question at an advantage or of placing at a disadvantage only nationals of other Member States, but not nationals of the State in question (see, to that effect, Case C‑388/01 Commission v Italy [2003] ECR I‑721, paragraph 14; Commission  v Netherlands , paragraph 38; and Case C-172/11 Erny  [2012] ECR I-0000, paragraph 41).
46. The difference in treatment which arises from a condition of residence being imposed on students who are the children of frontier workers thus constitutes indirect discrimination on the ground of nationality which is in principle prohibited, unless it is objectively justified. In order to be justified, it must be appropriate for securing the attainment of a legitimate objective and must not go beyond what is necessary to attain that objective (see, to that effect, Case C‑73/08 Bressol and Others  [2010] ECR I‑2735, paragraphs 47 and 48, and Commission  v Netherlands , paragraph 55).
The pursuit of a legitimate objective
51. As regards the justification based on the additional burden which would result from non-application of the residence requirement, it should be borne in mind that, although budgetary considerations may underlie a Member State’s choice of social policy and influence the nature or scope of the social protection measures which it wishes to adopt, they do not in themselves constitute an aim pursued by that policy and cannot therefore justify discrimination against migrant workers (see Commission  v Netherlands , paragraph 57 and case-law cited).
52. To accept that budgetary considerations may justify a difference in treatment between migrant workers and national workers would imply that the application and the scope of a rule of European Union law as fundamental as the principle of non-discrimination on grounds of nationality might vary in time and place according to the state of the public finances of the Member States (see Commission  v Netherlands , paragraph 58 and case-law cited).
53. With regard to the social objective, it should be pointed out that the promotion of higher education is an objective in the public interest, acknowledged at the level of the European Union, as stated inter alia by the Austrian and Luxembourg Governments.
56. It follows that an action undertaken by a Member State in order to ensure that its resident population is highly educated and to promote the development of the economy pursues a legitimate objective which can justify indirect discrimination on grounds of nationality.
The appropriateness of the residence condition
63. In that regard, it should be noted that the Court has already held that migrant and frontier workers, since they have participated in the labour market of a Member State, have in principle created a sufficient link of integration with the society of that State, allowing them to benefit from the principle of equal treatment, as compared, respectively with national workers and resident workers. The link of integration arises, in particular, from the fact that, through the taxes which they pay in the host Member State by virtue of their employment there, migrant and frontier workers also contribute to the financing of the social policies of that State (see, to that effect, Case C-379/11 Caves Krier Frères  [2012] ECR I-0000, paragraph 53).
64. However, it must be held that, with regard inter alia to frontier workers, the Court has allowed certain grounds of justification concerning legislation which distinguishes between residents and non-residents carrying out a professional activity in the State concerned, depending on the extent of their integration in the society of that Member State or their attachment to that State (see, to that effect, Hartmann , paragraphs 35 and 36; Geven , paragraph 26; and Hendrix , paragraphs 54 and 55).
68. It must therefore be held that the condition of residence provided for under the amended Law of 22 June 2000 is appropriate for attaining the objective of promoting higher education and of significantly increasing the proportion of Luxembourg residents who hold a higher education degree.
72. The Court has already accepted that a condition of residence may be disproportionate if it is too exclusive in nature because it favours an element which is not necessarily representative of the real and effective degree of connection and excludes all other representative elements (see Joined Cases C-11/06 and C-12/06 Morgan and Bucher  [2007] ECR I-9161, paragraph 46 and case-law cited, and Case C-503/09 Stewart  [2011] ECR I-0000, paragraph 95 and case-law cited).
76. In that regard, it must be stated that the system of financial aid at issue in the main proceedings is too exclusive in nature. By requiring the student to reside in the territory of the Member State concerned, the law favours an element which is not necessarily the sole representative element of the actual degree of attachment between the party concerned and that Member State (see, to that effect, Commission  v Netherlands , paragraph 86).
77. In particular, to the extent that State financial aid for higher education studies is intended to encourage the pursuit of such studies both in Luxembourg and in any other country, the existence of a reasonable probability that the recipients of that aid will return to settle in Luxembourg and make themselves available to the labour market of that Member State, in order to contribute to its economic development, may be established on the basis of elements other than a prior residence requirement in relation to the student concerned.
78. A sufficient attachment of the student in question with the Grand Duchy such as to make it possible to conclude that that probability exists may also be derived from the fact that that student resides alone or with his parents in a Member State which borders upon the Grand Duchy of Luxembourg and that, for a significant period of time, his parents have worked in Luxembourg and live near to that Member State.
79. With regard to the possibilities open to the Luxembourg legislature, it can be observed, in line with the Commission’s submission at the hearing, that where the aid granted consists in, for example, a loan, a system of financing which made the grant of that loan, or even the outstanding balance thereof, or its non-reimbursement, conditional on the student who receives it returning to Luxembourg after his or her studies abroad in order to work and reside there, could attain the objective pursued, without adversely affecting the children of frontier workers. In addition, the risk of duplication with equivalent financial aid paid in the Member State in which the student resides, with or without his parents, could be avoided by taking that aid into account in the grant of the aid paid by the State of the Grand Duchy of Luxembourg.
83. It follows from all the above considerations that the answer to the question referred is that:
– Article 7(2) of Regulation No 1612/68 must be interpreted as precluding, in principle, legislation of a Member State such as that at issue in the main proceedings, which makes the grant of financial aid for higher education studies conditional upon residence by the student in that Member State and gives rise to a difference in treatment, amounting to indirect discrimination, between persons who reside in the Member State concerned and those who, not being residents of that Member State, are the children of frontier workers carrying out an activity in that Member State;
– While the objective of increasing the proportion of residents with a higher education degree in order to promote the development of the economy of that same Member State is a legitimate objective which can justify such a difference in treatment, and while a condition of residence, such as that provided for by the national legislation at issue in the main proceedings, is appropriate for ensuring the attainment of that objective, such a condition nevertheless goes beyond what is necessary in order to attain the objective pursued, to the extent that it precludes the taking into account of other elements potentially representative of the actual degree of attachment of the applicant for the financial aid with the society or with the labour market of the Member State concerned, such as the fact that one of the parents, who continues to support the student, is a frontier worker who has stable employment in that Member State and has already worked there for a significant period of time.
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