1 BY ORDER OF 17 FEBRUARY 1981 WHICH WAS RECEIVED AT THE COURT ON 30 MARCH 1981 THE VERWALTUNGSGERICHT ( ADMINISTRATIVE COURT ) STUTTGART REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY TWO QUESTIONS AS TO THE INTERPRETATION OF ARTICLE 7 ( 1 ) OF THE EEC TREATY AND ARTICLE 7 ( 2 ) OF REGULATION NO 1612/68 OF THE COUNCIL OF 15 OCTOBER 1968 ON FREEDOM OF MOVEMENT FOR WORKERS WITHIN THE COMMUNITY ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( II ), P . 475 ).
2 THOSE QUESTIONS HAVE BEEN RAISED IN A DISPUTE ON A MATTER OF ADMINISTRATIVE LAW CONCERNING THE GRANT OF A CHILDBIRTH LOAN BETWEEN A MARRIED COUPLE , WORKERS OF ITALIAN NATIONALITY RESIDING IN THE FEDERAL REPUBLIC OF GERMANY , AND THE LANDESKREDITBANK BADEN-WURTTEMBERG , AN INSTITUTION INCORPORATED UNDER PUBLIC LAW AND PLACED UNDER THE DIRECTION OF THE LAND OF BADEN-WURTTEMBERG .
3 THE LANDESKREDITBANK GRANTS LOANS , UPON APPLICATION , ON THE BASIS OF GUIDELINES LAID DOWN BY THE COMPETENT AUTHORITY OF THE LAND OF BADEN-WURTTEMBERG , INTER ALIA ON THE BIRTH OF A CHILD . THE CHILDBIRTH LOANS , WHICH ARE FREE OF INTEREST AS A RESULT OF SUBSIDIES ALLOCATED BY THE LAND , ARE GRANTED FOR A TERM OF SEVEN YEARS UP TO AN AMOUNT OF DM 8 000 , WHICH MAY BE INCREASED TO DM 12 000 IN EXCEPTIONAL CASES . THEY MAY BE GRANTED TO MARRIED COUPLES ONLY WHERE AT LEAST ONE OF THE SPOUSES IS A GERMAN NATIONAL AND THE FAMILY INCOME DOES NOT EXCEED A SPECIFIED AMOUNT . ACCORDING TO THE INFORMATION PROVIDED BY THE NATIONAL COURT , THIS SYSTEM OF CHILDBIRTH LOANS WAS INTRODUCED WITH A VIEW TO STIMULATING THE BIRTH RATE OF THE GERMAN POPULATION AND IN ORDER TO REDUCE THE NUMBER OF VOLUNTARY ABORTIONS .
4 IN THE PRESENT CASE , THE PLAINTIFFS IN THE MAIN ACTION , MR AND MRS REINA , APPLIED FOR THE GRANT OF A LOAN ON THE BIRTH OF TWINS . THE LANDESKREDITBANK BADEN-WURTTEMBERG REJECTED THEIR APPLICATION ON THE GROUND THAT UNDER THE ABOVE-MENTIONED GUIDELINES , A LOAN MAY BE GRANTED ONLY IF AT LEAST ONE SPOUSE IS A GERMAN NATIONAL . THE PLAINTIFFS THEN BROUGHT AN ACTION BEFORE THE VERWALTUNGSGERICHT STUTTGART CHALLENGING THE CONFORMITY OF THAT REQUIREMENT WITH COMMUNITY LAW .
5 SINCE IT TOOK THE VIEW THAT IT REQUIRED A RULING OF THE COURT OF JUSTICE TO ENABLE IT TO GIVE JUDGMENT , THE VERWALTUNGSGERICHT STUTTGART REFERRED THE FOLLOWING QUESTIONS TO THE COURT OF JUSTICE FOR A PRELIMINARY RULING . ' ' 1 . MUST ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 1612/68 OF THE COUNCIL OF 15 OCTOBER 1968 ON FREEDOM OF MOVEMENT FOR WORKERS WITHIN THE COMMUNITY ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( II ), P . 475 ) BE CONSTRUED AS MEANING THAT IT PUTS OTHER NATIONALS OF THE EEC ON AN EQUAL FOOTING WITH GERMAN NATIONALS IF , PURSUANT TO INTERNAL ADMINISTRATIVE GUIDELINES AND WITHOUT THERE BEING ANY LEGAL ENTITLEMENT THERETO , A CREDIT INSTITUTION INCORPORATED UNDER PUBLIC LAW GRANTS UPON APPLICATION IN THE EVENT OF THE BIRTH OF A CHILD INTEREST-FREE LOANS TO MARRIED COUPLES WHOSE INCOME DOES NOT EXCEED A CERTAIN AMOUNT FOR THE PURPOSE OF AVERTING , ALLEVIATING OR REMOVING FINANCIAL DIFFICULTIES AND IN RESPECT OF WHICH LOANS THE LAND OF BADEN-WURTTEMBERG PROVIDES THE INSTITUTION WITH ASSISTANCE FOR THE SERVICING OF DEBTS ON THE BASIS OF THE FUNDS APPROPRIATED FROM TIME TO TIME IN THE STATE BUDGET , WITH THE AIM INTER ALIA OF COUNTERING BY MEASURES FOR FAMILY ASSISTANCE THE DECLINE IN THE BIRTH RATE IN THE FEDERAL REPUBLIC OF GERMANY AND REDUCING THE NUMBER OF VOLUNTARY ABORTIONS? 2.IF ARTICLE 7 ( 2 ) OF REGULATION ( EEC ) NO 1612/68 IS NOT APPLICABLE , IS ARTICLE 7 ( 1 ) OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY OF 25 MARCH 1957 TO BE CONSTRUED AS MEANING THAT IN THE CIRCUMSTANCES REFERRED TO ABOVE IT PRECLUDES DISCRIMINATION BETWEEN OTHER NATIONALS OF THE EEC AND GERMAN NATIONALS AS REGARDS THE GRANT OF CHILDBIRTH LOANS? ' ' PROCEDURE
6 THE LANDESKREDITBANK HAS CHALLENGED THE ADMISSIBILITY OF THE REFERENCE FOR A PRELIMINARY RULING ON THE GROUND THAT THE VERWALTUNGSGERICHT WAS INCORRECTLY COMPOSED WHEN IT MADE THE ORDER REFERRING THE MATTER TO THE COURT . WHEN DOING SO , THE VERWALTUNGSGERICHT WAS COMPOSED OF THREE JUDGES BY PROFESSION WHEREAS THE RELEVANT PROVISIONS OF GERMAN PROCEDRAL LAW REQUIRE , IN ADDITION , THE PARTICIPATION OF TWO LAY JUDGES .
7 IN THAT REGARD , IT IS NECESSARY TO RECALL THAT ARTICLE 177 OF THE EEC TREATY CONFERS ON THE COURT JURISDICTION TO GIVE PRELIMINARY RULINGS ON QUESTIONS OF COMMUNITY LAW REFERRED TO IT BY A COURT OR TRIBUNAL OF ONE OF THE MEMBER STATES . UNDER THE SCHEME OF THAT PROVISION , IT IS FOR THE COURT TO CONSIDER , WITH A VIEW TO CONFIRMING ITS OWN JURISDICTION , WHETHER IT IS DULY SEIZED OF A MATTER BROUGHT BEFORE IT BY A COURT OR TRIBUNAL OF A MEMBER STATE . HOWEVER , IN VIEW OF THE DISTRIBUTION OF FUNCTIONS BETWEEN ITSELF AND THE NATIONAL COURT , IT IS NOT FOR THE COURT TO DETERMINE WHETHER THE DECISION WHEREBY A MATTER IS BROUGHT BEFORE IT WAS TAKEN IN ACCORDANCE WITH THE RULES OF NATIONAL LAW GOVERNING THE ORGANIZATION OF THE COURTS AND THEIR PROCEDURE . THE COURT IS THEREFORE BOUND BY A DECISION OF A COURT OR TRIBUNAL OF A MEMBER STATE REFERRING A MATTER TO IT , IN SO FAR AS THAT DECISION HAS NOT BEEN RESCINDED ON THE BASIS OF A MEANS OF REDRESS PROVIDED FOR BY NATIONAL LAW .
8 IT FOLLOWS FROM THOSE CONSIDERATIONS THAT WHERE A COURT OF A MEMBER STATE BRINGS A MATTER BEFORE THE COURT OF JUSTICE UNDER ARTICLE 177 OF THE EEC TREATY THE COURT HAS JURISDICTION , UNDER THAT PROVISION , TO ANSWER THE QUESTIONS RAISED WITHOUT THERE BEING ANY NEED TO CONSIDER FIRST WHETHER THE DECISION MAKING THE REFERENCE TO IT WAS TAKEN IN ACCORDANCE WITH THE RULES OF NATIONAL LAW GOVERNING THE ORGANIZATION OF THE COURTS AND THEIR PROCEDURE . THE FIRST QUESTION
9 IN ITS FIRST QUESTION , THE NATIONAL COURT ASKS IN SUBSTANCE WHETHER ARTICLE 7 ( 2 ) OF REGULATION NO 1612/68 OF THE COUNCIL OF 15 OCTOBER 1968 MUST BE CONSTRUED AS MEANING THAT THE CONCEPT OF ' ' SOCIAL ADVANTAGE ' ' REFERRED TO IN THAT PROVISION ENCOMPASSES INTEREST-FREE LOANS GRANTED ON CHILDBIRTH BY A CREDIT INSTITUTION INCORPORATED UNDER PUBLIC LAW , ON THE BASIS OF GUIDELINES AND WITH FINANCIAL ASSISTANCE FROM THE STATE , TO FAMILIES WITH A LOW INCOME WITH A VIEW TO STIMULATING THE BIRTH RATE .
10 THE LANDESKREDITBANK CONTENDS IN THE FIRST PLACE THAT ARTICLE 7 ( 2 ) MAY NOT BE APPLIED TO THE LOANS IN QUESTION IN VIEW OF THE ABSENCE OF ANY CONNECTION BETWEEN THE GRANT OF THE LOAN AND THE RECIPIENT ' S STATUS AS A WORKER AND ON THE GROUND THAT THE REFUSAL TO GRANT THE LOAN IN NO WAY HINDERS THE MOBILITY OF WORKERS WITHIN THE COMMUNITY .
11 IT SHOULD BE RECALLED THAT REGULATION NO 1612/68 , ADOPTED INTER ALIA PURSUANT TO ARTICLE 49 OF THE EEC TREATY WITH A VIEW TO ACHIEVING FREEDOM OF MOVEMENT FOR WORKERS , PROVIDES , IN ARTICLE 7 ( 1 ), THAT A WORKER WHO IS A NATIONAL OF A MEMBER STATE MAY NOT , IN THE TERRITORY OF ANOTHER MEMBER STATE , BE TREATED DIFFERENTLY FROM NATIONAL WORKERS BY REASON OF HIS NATIONALITY IN RESPECT OF ANY CONDITIONS OF EMPLOYMENT AND WORK . PARAGRAPH ( 2 ) OF THE SAME ARTICLE ADDS THAT SUCH A WORKER IS TO ENJOY THE SAME SOCIAL AND TAX ADVANTAGES AS NATIONAL WORKERS .
12 AS THE COURT HAS REPEATEDLY HELD , MOST RECENTLY IN ITS JUDGMENT OF 31 MAY 1979 IN CASE 207/78 EVEN ( 1979 ) ECR 2019 , IT FOLLOWS FROM THOSE PROVISIONS AND FROM THE OBJECTIVE PURSUED THAT THE ADVANTAGES WHICH THAT REGULATION EXTENDS TO WORKERS WHO ARE NATIONALS OF OTHER MEMBER STATES ARE ALL THOSE WHICH , WHETHER OR NOT LINKED TO A CONTRACT OF EMPLOYMENT , ARE GENERALLY GRANTED TO NATIONAL WORKERS PRIMARILY BECAUSE OF THEIR OBJECTIVE STATUS AS WORKERS OR BY VIRTUE OF THE MERE FACT OF THEIR RESIDENCE ON THE NATIONAL TERRITORY AND THE EXTENSION OF WHICH TO WORKERS WHO ARE NATIONALS OF OTHER MEMBER STATES THEREFORE SEEMS SUITABLE TO FACILITATE THEIR MOBILITY WITHIN THE COMMUNITY .
13 CONSEQUENTLY , CHILDBIRTH LOANS SUCH AS THOSE REFERRED TO BY THE NATIONAL COURT SATISFY IN PRINCIPLE THE CRITERIA ENABLING THEM TO BE CLASSIFIED AS SOCIAL ADVANTAGES TO BE GRANTED TO WORKERS OF ALL THE MEMBER STATES WITHOUT ANY DISCRIMINATION WHATEVER ON GROUNDS OF NATIONALITY , IN PARTICULAR IN VIEW OF THEIR AIM WHICH IS TO ALLEVIATE , IN THE CASE OF FAMILIES WITH A LOW INCOME , THE FINANCIAL BURDEN RESULTING FROM THE BIRTH OF A CHILD .
14 THE LANDESKREDITBANK DISPUTES THAT CONCLUSION BY MAINTAINING THAT CHILDBIRTH LOANS , SUCH AS THOSE AT ISSUE , FALL OUTSIDE THE SCOPE OF THE CONCEPT OF ' ' SOCIAL ADVANTAGE ' ' WITHIN THE MEANING OF ARTICLE 7 ( 2 ) OF REGULATION NO 1612/68 SINCE THEY ARE GRANTED PRINCIPALLY FOR REASONS OF DEMOGRAPHIC POLICY IN ORDER TO COUNTERACT THE DECLINE IN THE BIRTH RATE OF THE GERMAN POPULATION . IT IS THEREFORE A MEASURE ADOPTED IN THE AREA OF POLITICAL RIGHTS , NECESSARILY LINKED TO NATIONALITY , AND WHICH AS A RESULT FALLS OUTSIDE THE AMBIT OF ARTICLE 48 ET SEQ . OF THE TREATY AND OF THE RULES ADOPTED TO IMPLEMENT THOSE PROVISIONS .
15 IT SHOULD BE STATED THAT , SINCE THE COMMUNITY HAS NO POWERS IN THE FIELD OF DEMOGRAPHIC POLICY AS SUCH , THE MEMBER STATES ARE PERMITTED , IN PRINCIPLE , TO PURSUE THE ACHIEVEMENT OF THE OBJECTIVES OF SUCH A POLICY , EVEN BY MEANS OF SOCIAL MEASURES . THIS DOES NOT MEAN , HOWEVER , THAT THE COMMUNITY EXCEEDS THE LIMITS OF ITS JURISDICITON SOLELY BECAUSE THE EXERCISE OF ITS JURISDICITON AFFECTS MEASURES ADOPTED IN PURSUANCE OF THAT POLICY . ACCORDINGLY , CHILDBIRTH LOANS OF THAT KIND MAY NOT BE CONSIDERED AS FALLING OUTSIDE THE SCOPE OF THE RULES OF COMMUNITY LAW RELATING TO THE FREE MOVEMENT OF PERSONS AND , MORE SPECIFICALLY , OF ARTICLE 7 ( 2 ) OF REGULATION NO 1612/68 , SOLELY BECAUSE THEY ARE GRANTED FOR REASONS OF DEMOGRAPHIC POLICY .
16 THE LANDESKREDITBANK CONTENDS IN ADDITION THAT THE LOANS IN QUESTION CONSTITUTE VOLUNTARY BENEFITS WITHIN THE LIMITS OF THE BUDGETARY RESOURCES ALLOCATED FOR THAT PURPOSE , WITH THE RESULT THAT NO ENTITLEMENT TO THOSE BENEFITS IS CREATED . SIMILARLY , IT IS PROPER TO TAKE INTO ACCOUNT THE FACT THAT MANY FOREIGN WORKERS RETURN TO THEIR COUNTRIES OF ORIGIN BEFORE THE EXPIRY OF THE PERIOD PRESCRIBED FOR THE REPAYMENT OF THE LOAN , SO THAT THE REPAYMENT IS PUT IN JEOPARDY .
17 HOWEVER , IT MUST BE OBSERVED IN THAT CONNECTION THAT THE CONCEPT OF ' ' SOCIAL ADVANTAGE ' ' REFERRED TO IN ARTICLE 7 ( 2 ) OF THE REGULATION ENCOMPASSES NOT ONLY THE BENEFITS ACCORDED BY VIRTUE OF A RIGHT BUT ALSO THOSE GRANTED ON A DISCRETIONARY BASIS . IN THE LATTER CASE , THE PRINCIPLE OF EQUAL TREATMENT REQUIRES THE BENEFITS TO BE MADE AVAILABLE TO NATIONALS OF OTHER MEMBER STATES ON THE SAME CONDITIONS AS THOSE WHICH APPLY TO A STATE ' S OWN NATIONALS AND ON THE BASIS OF THE SAME GUIDELINES AS THOSE WHICH GOVERN THE GRANT OF THE LOANS TO THE LATTER .
18 THE ANSWER TO THE FIRST QUESTION MUST THEREFORE BE THAT ARTICLE 7 ( 2 ) OF REGULATION NO 1612/68 OF THE COUNCIL OF 15 OCTOBER 1968 IS TO BE INTERPRETED AS MEANING THAT THE CONCEPT OF ' ' SOCIAL ADVANTAGE ' ' REFERRED TO IN THAT PROVISION ENCOMPASSES INTEREST-FREE LOANS GRANTED ON CHILDBIRTH BY A CREDIT INSTITUTION INCORPORATED UNDER PUBLIC LAW , ON THE BASIS OF GUIDELINES AND WITH FINANCIAL ASSISTANCE FROM THE STATE , TO FAMILIES WITH A LOW INCOME WITH A VIEW TO STIMULATING THE BIRTH RATE . SUCH LOANS MUST THEREFORE BE GRANTED TO WORKERS OF OTHER MEMBER STATES ON THE SAME CONDITIONS AS THOSE WHICH APPLY TO NATIONAL WORKERS . SECOND QUESTION AS THE SECOND QUESTION WAS ONLY PUT IN THE EVENT OF THE FIRST QUESTION ' S BEING ANSWERED IN THE NEGATIVE , IT DOES NOT CALL FOR A REPLY .