1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 19 JUNE 1985, THE COMMISSION OF THE EUROPEAN COMMUNITIES BROUGHT AN ACTION UNDER ARTICLE 169 OF THE EEC TREATY FOR A DECLARATION THAT, BY BRINGING INTO FORCE PARAGRAPH 8*(1)*(4 ) OF THE BUNDESKINDERGELDGESETZ (( FEDERAL LAW ON FAMILY ALLOWANCES FOR DEPENDENT CHILDREN )), AS AMENDED ON 31 JANUARY 1975, ACCORDING TO WHICH A FAMILY ALLOWANCE PAYABLE UNDER GERMAN LEGISLATION IS NOT GRANTED FOR A CHILD IN RESPECT OF WHOM A PERSON IS ENTITLED TO COMPARABLE BENEFITS FROM "INTERNATIONAL OR SUPRANATIONAL INSTITUTIONS", THEREBY ALTERING THE SUPPLEMENTARY EFFECT OF THE FAMILY ALLOWANCES PROVIDED FOR BY THE STAFF REGULATIONS OF OFFICIALS OF THE EUROPEAN COMMUNITIES ( HEREINAFTER REFERRED TO AS "THE STAFF REGULATIONS ") AND THE CONDITIONS OF EMPLOYMENT OF OTHER SERVANTS OF THE EUROPEAN COMMUNITIES ( HEREINAFTER REFERRED TO AS "THE CONDITIONS OF EMPLOYMENT "), THE FEDERAL REPUBLIC OF GERMANY HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 67*(2 ) AND THE SECOND PARAGRAPH OF ARTICLE 68 OF THE STAFF REGULATIONS AND ARTICLE 20 OF THE CONDITIONS OF EMPLOYMENT .
2 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR THE FACTS OF THE CASE, THE COURSE OF THE PROCEDURE AND THE SUBMISSIONS AND ARGUMENTS OF THE PARTIES, WHICH ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .
3 IN THIS CASE IT IS NECESSARY TO STATE FIRST THE RELEVANT PROVISIONS OF COMMUNITY LAW AND THE PROVISION OF NATIONAL LAW CONTESTED BY THE COMMISSION .
4 ARTICLE 67*(2 ) OF THE STAFF REGULATIONS IS WORDED AS FOLLOWS : "OFFICIALS IN RECEIPT OF FAMILY ALLOWANCES SPECIFIED IN THIS ARTICLE SHALL DECLARE ALLOWANCES OF LIKE NATURE PAID FROM OTHER SOURCES; SUCH LATTER ALLOWANCES SHALL BE DEDUCTED FROM THOSE PAID UNDER ARTICLES 1, 2 AND 3 OF ANNEX VII ." THE ALLOWANCES REFERRED TO IN THAT ARTICLE ARE THE HOUSEHOLD ALLOWANCE, THE DEPENDENT CHILD ALLOWANCE AND THE EDUCATION ALLOWANCE .
5 THE SECOND PARAGRAPH OF ARTICLE 68 LAYS DOWN THE SAME RULE FOR OFFICIALS WHO HAVE NON-ACTIVE STATUS, WHO HAVE BEEN RETIRED IN THE INTERESTS OF THE SERVICE OR WHO ARE ENTITLED TO THE ALLOWANCE PROVIDED FOR IN ARTICLES 34 AND 42 OF THE FORMER STAFF REGULATIONS OF THE EUROPEAN COAL AND STEEL COMMUNITY .
6 ARTICLE 20 OF THE CONDITIONS OF EMPLOYMENT PROVIDES THAT THE RULE IN ARTICLE 67*(2 ) OF THE STAFF REGULATIONS IS TO APPLY BY ANALOGY TO OTHER COMMUNITY SERVANTS .
7 THAT RULE IS ALSO INTENDED TO APPLY BY ANALOGY TO RECIPIENTS OF A RETIREMENT PENSION, AN INVALIDITY PENSION OR A SURVIVOR' S PENSION PAYABLE BY THE COMMUNITIES, WHO BY VIRTUE OF ARTICLE 81 OF THE STAFF REGULATIONS ARE ENTITLED, UNDER THE CONDITIONS LAID DOWN IN ANNEX VII, TO THE FAMILY ALLOWANCES REFERRED TO IN ARTICLE 67 .
8 THE BUNDESKINDERGELDGESETZ, AS AMENDED ON 31 JANUARY 1975, PROVIDES IN PARAGRAPH 1*(1 ) THAT "ANY PERSONS DOMICILED OR HABITUALLY RESIDENT WITHIN THE AREA COVERED BY THIS LAW SHALL BE ENTITLED TO FAMILY ALLOWANCES IN RESPECT OF THEIR CHILDREN" AND IN PARAGRAPH 8*(1 ) THAT : "THE FAMILY ALLOWANCE SHALL NOT BE GRANTED FOR A CHILD IN RESPECT OF WHOM A PERSON IS ENTITLED, UNDER PARAGRAPH 2*(1 ), TO ONE OF THE FOLLOWING BENEFITS : 1 . ... 2 . ... 3 . ... 4 . BENEFITS WHICH ARE GRANTED IN RESPECT OF A CHILD BY AN INTERNATIONAL OR SUPRANATIONAL INSTITUTION AND WHICH ARE COMPARABLE TO THE FAMILY ALLOWANCE ." THAT PROVISION DEROGATES FROM THE AFORESAID GENERAL RULE .
9 THE COMMISSION STATES THAT ARTICLE 67*(2 ) OF THE STAFF REGULATIONS CONTAINS A PROVISION AGAINST THE OVERLAPPING OF FAMILY ALLOWANCES WHICH IS ALSO TO BE FOUND IN THE SECOND PARAGRAPH OF ARTICLE 68 OF THE STAFF REGULATIONS AND WHICH HAS BEEN EXTENDED TO OTHER COMMUNITY SERVANTS BY ARTICLE 20 OF THE CONDITIONS OF EMPLOYMENT . THAT RULE AGAINST THE OVERLAPPING OF BENEFITS REQUIRES OFFICIALS TO DECLARE ALLOWANCES OF LIKE NATURE PAID FROM OTHER SOURCES SO AS TO ENABLE THOSE ALLOWANCES TO BE DEDUCTED FROM THOSE PAYABLE UNDER THE STAFF REGULATIONS . IN ADOPTING ARTICLE 67*(2 ), THE COMMUNITY LEGISLATURE WISHED TO MAKE THE ALLOWANCES PROVIDED FOR BY THE STAFF REGULATIONS AND THE CONDITIONS OF EMPLOYMENT SUPPLEMENTARY TO THE BENEFITS OF LIKE NATURE PAYABLE UNDER THE VARIOUS NATIONAL SYSTEMS . ACCORDINGLY, THE PURPOSE OF THAT ARTICLE IS, INTER ALIA, TO LIMIT THE FINANCIAL BURDEN OF THE COMMUNITIES .
10 THE COMMISSION CONTENDS THAT THE PROVISION AGAINST THE OVERLAPPING OF BENEFITS WHICH WAS ADOPTED BY THE FEDERAL REPUBLIC OF GERMANY DISREGARDS THE SUPPLEMENTARY ROLE OF THE BENEFITS PROVIDED FOR BY THE STAFF REGULATIONS AND HAS THE EFFECT OF AUGMENTING THE FINANCIAL BURDEN OF THE COMMUNITIES IN THIS AREA .
11 IT IS CLEAR FROM THE COMMISSION' S APPLICATION, AS REGARDS THE SCOPE OF ITS CLAIMS, THAT IT SEEKS PRIMARILY THE APPLICATION IN FULL TO OFFICIALS, RETIRED OFFICIALS OR OTHER COMMUNITY SERVANTS "RESIDING OR DOMICILED" IN THE FEDERAL REPUBLIC OF GERMANY OF THE GENERAL SCHEME OF FAMILY ALLOWANCES PROVIDED FOR BY GERMAN LEGISLATION AND IT THEREFORE REQUIRES FAMILY ALLOWANCES TO BE PAID BY THE FEDERAL REPUBLIC OF GERMANY IN RESPECT OF ALL THE CHILDREN OF THOSE COMMUNITY OFFICIALS AND SERVANTS .
12 IN THE ALTERNATIVE, AND WHILST MAINTAINING ITS PRINCIPAL ARGUMENT, THE COMMISSION SEEKS A DECLARATION THAT THE FEDERAL REPUBLIC OF GERMANY IS REQUIRED, BY ARTICLE 67*(2 ) OF THE STAFF REGULATIONS AND THE "GENERAL PRINCIPLES" LAID DOWN BY THE STAFF REGULATIONS, TO PAY FAMILY ALLOWANCES IN RESPECT OF CHILDREN ONE OF WHOSE PARENTS IS AN OFFICIAL, A FORMER OFFICIAL IN RECEIPT OF A PENSION OR ANOTHER COMMUNITY SERVANT, IF THE OTHER PARENT CARRIES ON AN OCCUPATION ON GERMAN TERRITORY .
13 THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY CONTENDS, FOR ITS PART, THAT ARTICLE 67*(2 ) AND THE OTHER PROVISIONS IN QUESTION ARE MERELY RULES AGAINST THE OVERLAPPING OF BENEFITS AND ARE IN NO WAY BINDING ON THE MEMBER STATES, WHICH ARE ENTIRELY AT LIBERTY TO ORGANIZE THEIR OWN SOCIAL SECURITY LEGISLATION .
14 IT MUST BE BORNE IN MIND, FIRST, THAT THE STAFF REGULATIONS AND THE CONDITIONS OF EMPLOYMENT WERE ADOPTED BY MEANS OF COUNCIL REGULATION ( EEC, EURATOM, ECSC ) NO 259/68 OF 29 FEBRUARY 1968 ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1968 ( I ), P . 30 ) AND THAT, BY VIRTUE OF THE SECOND PARAGRAPH OF ARTICLE 189 OF THE EEC TREATY, THAT REGULATION HAS GENERAL APPLICATION, IS BINDING IN ITS ENTIRETY AND IS DIRECTLY APPLICABLE IN ALL MEMBER STATES . IT FOLLOWS THAT, AS THE COURT POINTED OUT IN PARTICULAR IN ITS JUDGMENT OF 20 OCTOBER 1981 IN CASE 137/80 COMMISSION V BELGIUM (( 1981 )) ECR 2393, IN ADDITION TO HAVING EFFECTS WITHIN THE COMMUNITY ADMINISTRATION, THE STAFF REGULATIONS AND THE CONDITIONS OF EMPLOYMENT ARE ALSO BINDING ON MEMBER STATES IN SO FAR AS THEIR COOPERATION IS NECESSARY IN ORDER TO GIVE EFFECT TO THOSE MEASURES . ACCORDINGLY, THE QUESTION ARISES WHETHER ARTICLE 67*(2 ) OF THE STAFF REGULATIONS IMPOSES BINDING OBLIGATIONS ON THE MEMBER STATES .
15 IT MUST BE POINTED OUT, FOR THOSE PURPOSES, THAT THE FAMILY ALLOWANCES AT ISSUE IN THIS CASE CONSTITUTE BENEFITS THE AWARD OF WHICH DEPENDS ON THE FAMILY CIRCUMSTANCES OF THE OFFICIAL CONCERNED . ACCORDINGLY, IN THE ABSENCE OF SPECIAL PROVISIONS, THE APPLICATION OF THE COMMUNITY SCHEME IN CONJUNCTION WITH A NATIONAL SCHEME COULD GIVE RISE TO CONFLICTS, INASMUCH AS ALLOWANCES COULD BE CLAIMED IN FULL UNDER BOTH SCHEMES IN RESPECT OF THE SAME SET OF FAMILY CIRCUMSTANCES . THE PURPOSE OF ARTICLE 67*(2 ) OF THE STAFF REGULATIONS IS PRECISELY TO RESOLVE CONFLICTS OF THAT KIND .
16 IF THE CONFLICTS IN QUESTION WERE GOVERNED BY PROVISIONS OF NATIONAL LAW, THEY MIGHT BE RESOLVED IN DIFFERENT WAYS ACCORDING TO THE MEMBER STATE WITHIN WHOSE TERRITORY THE OFFICIAL OR HIS SPOUSE CARRIED ON THEIR ACTIVITIES OR RESIDED . ARTICLE 67*(2 ) OF THE STAFF REGULATIONS MAKES IT POSSIBLE TO RESOLVE CONFLICTS BETWEEN THE COMMUNITY SCHEME AND THE VARIOUS NATIONAL SCHEMES, AS THE FAMILY ALLOWANCES PROVIDED FOR BY THE STAFF REGULATIONS ARE PAID TO THOSE ENTITLED TO THEM ONLY IN SO FAR AS THEY EXCEED THE AMOUNT OF THE COMPARABLE ALLOWANCES PAID UNDER A SCHEME ESTABLISHED BY THE LEGISLATION OF A MEMBER STATE . SINCE IT IS BASED ON ARTICLE 67*(2 ) ITSELF, THAT IS TO SAY ON A PROVISION CONTAINED IN A REGULATION ADOPTED PURSUANT TO THE SECOND PARAGRAPH OF ARTICLE 189 OF THE EEC TREATY, THE SUPPLEMENTARY EFFECT OF ALLOWANCES PAYABLE UNDER THE STAFF REGULATIONS IS BINDING ON THE MEMBER STATES AND CANNOT BE DISREGARDED BY NATIONAL LEGISLATION .
17 ONCE IT HAS BEEN ESTABLISHED THAT THE MEMBER STATES ARE BOUND BY THE OBLIGATIONS IMPOSED BY ARTICLE 67*(2 ) OF THE STAFF REGULATIONS AND THE OTHER PROVISIONS REFERRED TO ABOVE, THE NATURE OF THOSE OBLIGATIONS REMAINS TO BE DETERMINED .
18 IN THAT REGARD, ARTICLE 67*(2 ) MUST BE REGARDED AS FORMING PART OF THE GENERAL SYSTEM GOVERNING THE REMUNERATION WHICH THE COMMUNITIES ARE REQUIRED TO PAY THEIR OFFICIALS PURSUANT TO ARTICLE 62 OF THE STAFF REGULATIONS . THAT PROVISION INCLUDES FAMILY ALLOWANCES IN THE REMUNERATION TO WHICH THOSE OFFICIALS ARE ENTITLED . FOR THE SAME REASON, ARTICLE 67 IS INCLUDED IN SECTION 1, CHAPTER I, TITLE V OF THE STAFF REGULATIONS, WHICH IS HEADED "REMUNERATION ". ARTICLES 19 AND 61 OF THE CONDITIONS OF EMPLOYMENT ALSO TREAT THE FAMILY ALLOWANCES PAYABLE TO OTHER COMMUNITY SERVANTS AS REMUNERATION .
19 IN THE CONTEXT OF THE SYSTEM OF REMUNERATION, ARTICLE 67*(2 ), IN SO FAR AS IT PROVIDES THAT ALLOWANCES OF LIKE NATURE PAID FROM OTHER SOURCES ARE TO BE DEDUCTED FROM THOSE PAYABLE BY THE COMMUNITIES, CONSTITUTES AN EXCEPTION TO ARTICLE 62 OF THE STAFF REGULATIONS AND CANNOT THEREFORE BE GIVEN A BROAD INTERPRETATION .
20 EVEN IF THE EFFECT OF THAT PROVISION IS TO LIMIT THE FINANCIAL BURDEN OF THE COMMUNITIES, IT CANNOT REMOVE THE COMMUNITIES' OBLIGATION TO PAY FAMILY ALLOWANCES WHERE A MEMBER STATE CONFERS ENTITLEMENT TO FAMILY ALLOWANCES ON ALL PERSONS WITH DEPENDENT CHILDREN SOLELY ON THE BASIS OF THE CRITERION THAT THEY ARE DOMICILED OR HABITUALLY RESIDENT WITHIN ITS OWN TERRITORY .
21 THE SOLUTION TO WHICH SUCH AN INTERPRETATION WOULD LEAD IS MANIFESTLY DISCRIMINATORY, IN SO FAR AS IT WOULD BURDEN THE MEMBER STATES WHICH CONFER ENTITLEMENT TO FAMILY ALLOWANCES SOLELY BY REFERENCE TO THE CRITERION OF DOMICILE OR HABITUAL RESIDENCE WITH RESPONSIBILITY FOR PAYING THOSE ALLOWANCES IN RESPECT OF THE CHILDREN OF ANY OFFICIAL, RETIRED OFFICIAL OR OTHER COMMUNITY SERVANT DOMICILED OR HABITUALLY RESIDENT WITHIN THEIR TERRITORY, WHILST EXEMPTING FROM THAT BURDEN MEMBER STATES WHICH FINANCE FAMILY ALLOWANCES BY A SYSTEM OF CONTRIBUTIONS THAT IS NOT APPLICABLE TO COMMUNITY STAFF .
22 IN ITS APPLICATION THE COMMISSION ITSELF ACKNOWLEDGES, BY IMPLICATION, THAT THAT SOLUTION IS DISCRIMINATORY WHEN IT STATES THAT "IF A MEMBER STATE APPLIES FOR THE BENEFIT OF ITS INHABITANTS A GENERAL SCHEME OF BENEFITS FINANCED BY PUBLIC FUNDS, THAT SCHEME MUST ALSO APPLY TO COMMUNITY SERVANTS RESIDING IN THAT MEMBER STATE" BUT GOES ON TO CONCEDE THAT IT WOULD REQUIRE THAT STATE TO BEAR THE PRIMARY RESPONSIBILITY FOR FINANCING FAMILY ALLOWANCES IN RESPECT OF THE CHILDREN OF AN OFFICIAL ONLY WHERE THE OTHER SPOUSE IS WORKING . IN THAT REGARD, IT SHOULD BE NOTED THAT, IF THE SOLUTION WHICH IT ADVOCATES WERE TO BE ADOPTED, THE COMMISSION WOULD BE OBLIGED TO APPLY THE PROVISIONS OF THE STAFF REGULATIONS INFLEXIBLY AND WOULD BE UNABLE TO GRANT THE MEMBER STATES ANY REDUCTION IN THE FINANCIAL BURDENS IMPOSED ON EACH STATE BY ARTICLE 67*(2 ) OF THE STAFF REGULATIONS AND THE PROVISIONS RELATED THERETO .
23 IN ADDITION, THE SOLUTION ADVOCATED BY THE COMMISSION WOULD HAVE THE EFFECT OF REVERSING THE GENERAL RULE IN THE STAFF REGULATIONS, TO THE EFFECT THAT THE COMMUNITIES ARE REQUIRED TO PAY REMUNERATION TO THEIR OFFICIALS AND OTHER SERVANTS, AND ADOPTING AS THE GENERAL RULE THE EXCEPTIONS SUCH AS ARTICLE 67*(2 ) OF THE STAFF REGULATIONS AND THE OTHER PROVISIONS RELATED THERETO, AT ANY RATE IN CASES WHERE THE NATIONAL LEGISLATION OF A MEMBER STATE CONFERS ENTITLEMENT TO FAMILY ALLOWANCES SOLELY ON THE BASIS OF THE CRITERION OF DOMICILE OR HABITUAL RESIDENCE .
24 ACCORDINGLY, IN THE LIGHT OF THE FOREGOING CONSIDERATIONS, THE COMMISSION' S PRINCIPAL CLAIMS MUST BE REJECTED .
25 IT IS THEREFORE NECESSARY TO ASCERTAIN WHETHER THE COMMISSION' S ALTERNATIVE CLAIMS ARE COMPATIBLE WITH ARTICLE 67*(2 ) AND THE OTHER PROVISIONS IN QUESTION .
26 IN THAT REGARD, FAMILY ALLOWANCES, IN SO FAR AS THEY ARE COMPONENTS OF REMUNERATION, MUST BE REGARDED AS LINKED, IN THE SCHEME OF THE STAFF REGULATIONS, TO AN EMPLOYMENT RELATIONSHIP OR, IN GENERAL, TO A GAINFUL OCCUPATION .
27 HAVING REGARD TO THE FOREGOING CONSIDERATIONS, IT MUST BE ACKNOWLEDGED THAT ARTICLE 67*(2 ) APPLIES ONLY WHERE, IN RELATION TO A MEMBER STATE WHOSE LEGISLATION CONFERS ENTITLEMENT IN PRINCIPLE TO THE PAYMENT OF NATIONAL ALLOWANCES IN RESPECT OF A CHILD WHO IS ELIGIBLE FOR ALLOWANCES UNDER THE STAFF REGULATIONS, THERE IS A COMPARABLE LINK WITH CIRCUMSTANCES CONFERRING ENTITLEMENT TO THE AWARD OF ALLOWANCES UNDER THE STAFF REGULATIONS .
28 ACCORDINGLY, IT IS ONLY WHERE THE SPOUSE OF AN OFFICIAL, RETIRED OFFICIAL OR OTHER COMMUNITY SERVANT HAS OR HAS HAD PAID EMPLOYMENT IN A MEMBER STATE THAT ARTICLE 67*(2 ) OF THE STAFF REGULATIONS AND THE OTHER PROVISIONS RELATED THERETO PRECLUDE THAT STATE FROM WITHHOLDING PAYMENT OF THE FAMILY ALLOWANCES PROVIDED FOR BY ITS OWN LEGISLATION ON THE GROUND THAT THE SPOUSE MAY QUALIFY FOR ALLOWANCES UNDER THE STAFF REGULATIONS IN RESPECT OF THE SAME CHILD .
29 HAVING REGARD TO THAT INTERPRETATION OF ARTICLE 67*(2 ) AND THE SECOND PARAGRAPH OF ARTICLE 68 OF THE STAFF REGULATIONS, AND OF ARTICLE 20 OF THE CONDITIONS OF EMPLOYMENT, IT MUST BE HELD THAT THE COMMISSION' S ALTERNATIVE CLAIMS ARE WELL FOUNDED .
30 IT MUST THEREFORE BE HELD THAT THE FEDERAL REPUBLIC OF GERMANY HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 67*(2 ) AND THE SECOND PARAGRAPH OF ARTICLE 68 OF THE STAFF REGULATIONS AND ARTICLE 20 OF THE CONDITIONS OF EMPLOYMENT, IN SO FAR AS PARAGRAPH 8*(1)*(4 ) OF THE BUNDESKINDERGELDGESETZ, AS AMENDED ON 31 JANUARY 1985, PRECLUDES THE PAYMENT OF FAMILY ALLOWANCES FOR DEPENDENT CHILDREN UNDER NATIONAL LEGISLATION WHERE THE PERSON ENTITLED TO SUCH ALLOWANCES IS MARRIED TO A SERVING OFFICIAL, A RETIRED OFFICIAL OR ANOTHER SERVANT OF THE EUROPEAN COMMUNITIES AND IS EMPLOYED IN GERMANY .