De Cuyper (European citizenship) [2006] EUECJ C-406/04 (18 July 2006)

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(Reference for a preliminary ruling from the Tribunal du Travail de Bruxelles (Belgium))

(Interpretation of Articles 17 and 18 EC establishing European citizenship in light of a provision of national law that makes the granting of unemployment benefits conditional on actual residence in the national territory)

1. In this case, the Tribunal du Travail de Bruxelles has referred questions to the Court under Article 234 EC asking essentially whether a residence requirement contained in national legislation which must be satisfied in order to receive entitlement to a benefit is contrary to the right, under Articles 17 and 18 EC, of a citizen of the Union to move and reside freely within the territory of the Member States where the applicant is an unemployed person who is not required to be available for work.

2. That initially raises an issue as to how the benefit should be classified as a matter of Community law.

3. Once that classification is made, the main issue to be addressed is the exportability of the benefit under the Community's social security rules.

1. Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union ...

2. Citizens of the Union shall enjoy the rights conferred by this Treaty and shall be subject to the duties imposed thereby.

1. 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.

"1. 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, in particular as regards remuneration, dismissal, and should he become unemployed, reinstatement or re-employment;

6. Regulation No 1408/71 concerns the application of social security schemes to employed persons moving within the Community. (3)

7. Article 1(a)(i) defines an employed person as any person who is insured, compulsorily or on an optional basis, for one or more of the contingencies covered by the branches of a social security scheme for employed or self-employed persons.

8. In so far as is relevant, Article 1(a)(o) defines "competent institution" as the institution with which the person concerned is insured at the time of the application for benefit.

9. The Member State in whose territory the competent institution is situated is defined as the "competent State". (4)

12. Chapter 6 of Title III of Regulation No 1408/71 sets out special provisions relating to unemployment benefits.

13. Section 2 of Chapter 6 contains rules relating to unemployed persons going to a Member State other than the competent State. Article 69 of Section 2 confers on unemployed persons who move to another Member State to look for work limited entitlement to unemployment benefit.

14. Section 3 of Chapter 6 contains rules on unemployed persons who, during their last employment, were residing in a Member State other than the competent State. Article 71(1)(a) of Section 3 concerns entitlement to unemployment benefit for frontier workers who are partially or intermittently unemployed or who are wholly unemployed. Article 71(1)(b) of Section 3 concerns entitlement to unemployment benefit for unemployed persons other than frontier workers who were resident in a Member State other than the competent State during their last employment.

15. Article 66(1) of the Royal Decree of 25 November 1991 (5) concerning unemployment regulation provides:

16. The derogations from the requirement of actual residence which may be made by the Minister are contained in Article 39 of the Ministerial Order of 26 November 1991 concerning implementation of the unemployment regulations, which refers to four specific situations in which a stay which is temporary and short, namely of no more than four weeks, does not preclude the award of benefits.

17. Article 89(1) of the Royal Decree of 25 November 1991, as amended by a Royal Decree of 22 November 1995, (6) states that a wholly unemployed person of at least 50 years of age may be exempted at his request from certain requirements set out in other provisions of the Royal Decree of 25 November 1991 if he has received at least 312 benefit payments as a wholly unemployed person in the 2 years preceding his application. Those requirements include the obligation to be available for work and to accept any suitable employment, the obligation to report in person to the relevant employment service or to participate in a monitoring scheme, and the obligation to register as a job-seeker.

18. Article 89 was recently amended by a Royal Decree of 27 May 2002, (7) which entered into force on 1 July 2002. Pursuant to that amendment, exemption for older unemployed persons from the requirements set out in the Royal Decree of 25 November 1991 varies according to whether the unemployed person is over 50 or over 58 years of age. Thus, unemployed persons aged between 50 and 58 may be exempted from certain requirements but not from the obligation to be available for work and to accept any suitable employment, the obligation to report in person to the relevant employment service or to participate in a monitoring scheme, and the obligation to register as a job-seeker. By contrast, unemployed persons over 58 are exempted from those three requirements, as well as others.

19. Mr De Cuyper is a Belgian national born in 1942. He was previously employed in Belgium and was granted unemployment benefit in 1997.

20. In 1998 he received an exemption under Article 89(1) of the Royal Decree of 25 November 1991 from the obligation to submit to municipal control procedures. That exemption had the following consequences:

- in the event that he carried on an incidental activity, he did not have to show that he had already pursued that activity whilst he was working as an employee during the three months preceding his application for benefit;

- he was no longer subject to the obligation to be available for work and to accept any suitable employment, to the obligation to present himself to the employment service or to participate in a monitoring scheme;

- he was entitled to pursue on his own account and without a view to profit any activity relating to his own property;

21. In a declaration of his personal and family circumstances made in December 1999, Mr De Cuyper confirmed that he was single and that he resided in Brussels.

22. Following a routine enquiry in April 2000 to check the accuracy of declarations made by the recipient, the National Employment Office ("ONEM") invited Mr De Cuyper to an interview in Brussels to check his family circumstances, which he duly attended. Subsequently he made representations to ONEM in which he stated that he had resided in the south of France since January 1999. There he had bought a boat which he was renovating as a home.

23. Mr De Cuyper acknowledged that he returned to Belgium, where he made use of a furnished room, approximately once every three months and that he had not notified ONEM of his change of circumstances.

24. On the basis of its inquiries, ONEM concluded that he resided in France with a friend who was retired.

25. Mr De Cuyper did not attend a hearing in July 2000 to which he had been invited to make representations in his defence.

26. In September 2000, ONEM notified him of its decision to exclude him from entitlement to unemployment benefit with retroactive effect from 1999 on the ground that he had failed to fulfil the requirement of actual residence under Article 66 of the Royal Decree of 25 November 1991 ("the residence requirement").

27. Mr De Cuyper appealed against that decision before the Tribunal du Travail de Bruxelles.

28. According to the order for reference, it is clear from the documents before that court that he cannot apply for any of the ministerial derogations contained in Article 39 of the Ministerial Order of 26 November 1991, and is therefore subject to the residence requirement.

29. In those circumstances, the Tribunal du Travail has referred the following questions to the Court under Article 234 EC:

30. Mr De Cuyper, ONEM, the Commission, Belgium, France and Germany have made written submissions and were all represented at the hearing. The Netherlands and the United Kingdom made submissions only at the hearing.

31. The Tribunal du Travail is essentially asking whether a residence requirement, applied as a condition of entitlement to unemployment benefit to unemployed persons over 50 who are exempted inter alia from the obligation to be available for work, constitutes a restriction on the right of citizens of the European Union to move and reside freely within the Community contrary to Articles 17 and 18 EC.

32. In order to determine the applicable Community law in the present circumstances, it is necessary to consider how a benefit paid to unemployed persons over 50 who, under national rules on entitlement to unemployment benefit, are exempted inter alia from the requirement of being available for work ("the benefit" or "the benefit at issue") should be classified.

33. Mr De Cuyper, ONEM, Belgium, France and Germany proceed on the basis that the benefit qualifies as an unemployment benefit within the meaning of Regulation No 1408/71. The Commission takes the opposite view.

34. It seems clear that, contrary to the submissions made by the Commission, Article 7 of Regulation No 1612/68 does not apply in the present case.

35. As the United Kingdom argued at the hearing, that provision confers on a worker who is a national of a Member State the right to enjoy in the territory of a second Member State the same social and tax advantages as workers who are nationals of the second Member State.

36. By contrast, Mr De Cuyper seeks the same treatment as that enjoyed by those who are nationals of the Member State of which he is also a national and who remain resident in that State.

37. The benefit at issue cannot therefore qualify as a social advantage within the meaning of Article 7(2) of Regulation No 1612/68.

38. The Commission further submits that the right to unemployment benefit assumes that the unemployed person is available for placement by the employment service at which he is registered. In the present case, Mr De Cuyper has been exempted from the requirement of being available for work under Article 89 of the Royal Decree of 25 November 1991.

39. In its written submissions, the Commission argued that the benefit claimed by Mr De Cuyper could be considered as an "early retirement" benefit. At the hearing, however, it proposed that the benefit might not necessarily be considered as an early retirement benefit but rather as a benefit sui generis. In either case, according to the Commission, the benefit falls outside the scope of Regulation No 1408/71.

40. In support of that argument it cites Otte, (8) in which the Court distinguished unemployment benefit under Regulation No 1408/71 from adaptation allowances, granted in the form of non-compulsory subsidies to older mineworkers - who had become unemployed as a result of restructuring of the German coal-mine industry (9) - from the time at which they were laid off to the time at which they attained retirement age. The Commission draws attention to the fact that recipients of the adaptation allowances were not required to register as job-seekers or to remain available for work - both of which are requirements from which Mr De Cuyper is also exempted under the Royal Decree of 25 November 1991. It notes that in Otte the Court stated that the conditions for the grant of the adaptation allowance, which derive from its employment policy-related objective, in particular, removing laid-off workers from the sphere of unemployment insurance, differ clearly from those which characterise unemployment benefit within the meaning of Article 4(1)(g) of Regulation No 1408/71. (10)

41. It is true that the benefit in Otte is similar to that paid to Mr De Cuyper in that the claimant of the benefit is exempted from the requirements of registering as a job-seeker and being available for work.

42. But the adaptation allowance in Otte must be seen in its proper context as a benefit paid to older mineworkers who had become unemployed as a result of restructuring of the German coal-mine industry. Indeed, the Court stated that the primary purpose of the adaptation allowance was to ensure that workers who had been laid off following a rationalisation measure had some income and were "thereby removed from the sphere of unemployment insurance". (11)

43. That context is clearly distinct from the one in which Mr De Cuyper has applied for benefit.

44. Other characteristics of the adaptation allowance also distinguish it from the present case. It was granted to an unemployed person close to fulfilling conditions for entitlement to a retirement pension. (12) The recipient of the adaptation allowance was not required to refrain from undertaking an activity as an employed or self-employed person the income from which exceeds a specified ceiling, whereas in the present case an unemployed person may only carry on any activity relating to his own property, on his own account and without a view to profit, according to Article 25(3) of the Royal Decree of 25 November 1991.

45. Moreover, the fact that the benefit at issue has little in common with an old-age benefit supports the view that it should not be considered to be an early retirement benefit.

46. Benefits with the following characteristics have been classified as old-age benefits: those which are granted to elderly nationals in order to provide them with minimum means of subsistence (13) and those dependent on the existence of a right to pension; payment of the benefit by the pension insurance institution; calculation of the amount of the benefit by reference to criteria related to the pension; and the fact that the benefit is designed to supplement old-age pension. (14)

47. None of those characteristics resemble the conditions for grant of the benefit at issue. Aside from the fact that it is paid to persons over 50 who are not required to be available for work, the benefit in no other way resembles old-age benefit.

48. Therefore the Commission's submission that the benefit claimed by Mr De Cuyper is an early retirement benefit should be rejected.

49. Aside from the residence requirement, the conditions for grant of the benefit according to Article 89(1) of the Royal Decree of 25 November 1991 are that the person is unemployed; that he is over 50; and that he has received over 312 payments as an unemployed person in the 2 years preceding his application.

50. Those conditions clearly relate to the risk of unemployment. In that they therefore suggest that the benefit is unemployment benefit they are not, in my view, outweighed by an exemption from registering as a job-seeker and being available for work - conditions which are normally associated with entitlement to unemployment benefit.

51. Nor, in my view, does that exemption alter Mr De Cuyper's status as an unemployed person. As ONEM submitted at the hearing, Belgian legislation places older unemployed persons on the same footing as younger unemployed persons. Older unemployed persons, in contrast to persons in early retirement, are not to be considered as having definitively left the employment market despite any exemption from registering as a job-seeker and being available for work; they may subsequently return to employment.

52. It may also be noted that, pursuant to the Royal Decree of 27 May 2002, since July 2002 older unemployed persons below 58 years of age may no longer apply for an exemption from registering as a job-seeker and being available for work.

53. I find nothing in the order for reference to indicate that the benefit which Mr De Cuyper claims is in any way different from benefits paid following involuntary unemployment, and I am therefore of the view that it qualifies as unemployment benefit under Article 4(1)(g) of Regulation No 1408/71.

54. The legal regulation of benefits relating to involuntary unemployment occupies a special place within social security systems.

55. These benefits aim to offer a guarantee of support for employees and their family members in the event of temporary and involuntary unemployment.

56. Those entitled to such benefits are thus people forming part of the active working population on the regular labour market. Normally, the benefits have the character of a payment that, up to a certain maximum, is related to the last salary earned.

57. The benefits are financed either by general taxes, or by more specific collective levies which are related to primary labour income.

58. These characteristics imply that those receiving unemployment benefit must remain available on the labour market; that is to say, they must be registered with a body which helps them to find a new position. Those entitled to benefits must, in addition, accept any offer of suitable employment and may not undertake any activities whereby they receive income over and above their unemployment benefit.

59. The aim of these requirements - which in principle must be strictly applied - is to prevent improper use or abuse of unemployment benefits, and to prevent unfair competition on the labour market by those receiving unemployment benefits.

60. Unemployment benefits, as a branch of social security specifically provided for the working population, have since the 1980s increasingly been used as an instrument of labour market and employment policy.

61. In a number of (mainly continental) States, such social security legislation has been used to promote a policy whereby those of an older age on the employment market make way for younger job-seekers. In such a policy context, these older employees who became unemployed were wholly or partly exempted from the requirement to be available on the labour market. This seems to be the rationale for the Belgian regulations of 1991 applied in the present case.

62. In other, in particular Scandinavian, States, social security legislation for the unemployed is used as a means of implementing an "activating" labour market policy, by making the right to and the amount of benefit also dependent on active participation in re-schooling programmes, aimed at maintaining or increasing the earning capacity of the job-seekers concerned on the labour market.

63. More recently, labour market policy in most EU States has aimed at the greatest possible participation of older employees in the labour market. This is evidently not unconnected to problems relating to the aging of the European population. Such policy has led to a much more strict application of the availability-for-work criterion for older unemployed people than was, until recently, usual. This change is also apparent in the Royal Decree of 27 May 2002. (15)

64. In addition to the classic arguments against the export of unemployment benefit - the prevention of abuse and of unfair competition on the labour market - the argument that States must be able to use such benefit as an instrument of labour market and employment policy is thus also relevant.

65. Use by Member States of the availability-for-work criterion as an instrument of an "activating" labour market policy clearly accords with the delineation of competence under the Treaty articles on employment and social provisions.

66. Article 125 EC states that Member States and the Community shall work towards developing a coordinated strategy for employment and particularly for promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change with a view to achieving the objectives defined in Article 2 EU and in Article 2 EC. Those objectives include promoting within the Community a high level of employment and social protection.

67. Under Article 126(1) EC, Member States shall contribute to the achievement of those objectives through their employment policies.

68. Articles 125, 127(1) and 129 EC refer to the coordinating and complementing role that the Community is to play with regard to the employment policy of the Member States and promoting a high level of employment. However, the competence of the Member States in this area must be respected, according to Article 127(1) EC. Supporting measures adopted by the Community may not include harmonisation of the laws and regulations of the Member States, under the second paragraph of Article 129 EC.

69. In so far as is relevant, Article 136 EC, which concerns social provisions, states that the Community and the Member States shall have as their objectives the promotion of employment, improved living and working conditions, and proper social protection, with a view to lasting high employment and the combating of exclusion, and that to this end the Community and the Member States shall implement measures which take account of the diverse forms of national practices.

70. Article 137(1) EC provides inter alia that the Community shall support and complement the activities of the Member States in the fields of social security and social protection of workers and protection of workers whose employment contracts have terminated.

71. Provisions adopted pursuant to Article 137 EC must not, according to the first indent of Article 137(4) EC, affect the right of Member States to define the fundamental principles of their social security systems and must not significantly affect the financial equilibrium thereof.

72. In sum, it is clear that competence in establishing employment and social security policy rests primarily with Member States, while the Community plays a coordinating and complementary role.

73. The Community legislator would seem to have allowed for Member States to use unemployment benefit as an instrument of labour market and employment policy in revising Regulation No 1408/71, the new version of which (Regulation No 883/2004) (16) continues expressly to exclude the export of unemployment benefit.

74. In the light of that context which explains the rationale for restricting exportation of unemployment benefit, it should next be examined how that principle is reflected in the provisions of Regulation No 1408/71, and how those provisions apply in the present circumstances.

75. Article 10(1) of Regulation No 1408/71 concerns the waiving of residence clauses included in national legislation on social security schemes. It contains a prohibition on reduction, modification, suspension, withdrawal or confiscation of certain social security benefits on the ground that the recipient resides in a Member State other than that in which the institution responsible for payment is situated. The social security benefits listed in Article 10(1) to which that prohibition applies do not include unemployment benefit.

76. Therefore, as ONEM notes, Regulation No 1408/71 in general prohibits neither a residence requirement nor suspension of payment on the ground that the recipient resides in another Member State in the case of national rules governing unemployment benefit.

77. In relation to the general proposition that restrictions on exporting entitlement to unemployment benefits are not prohibited, Regulation No 1408/71 provides two exceptions.

78. Article 69 provides for entitlement to unemployment benefit where an unemployed person moves to another Member State for no more than three months as a registered job-seeker in order to look for work. Article 71(1) provides for entitlement to unemployment benefit for unemployed persons who, during their last employment, resided in a Member State other than the State in which they are insured for social security purposes.

79. Mr De Cuyper's circumstances do not relate to the circumstances governed by Articles 69 and 71. The general proposition that there is no prohibition on imposing a residence requirement on entitlement to unemployment benefit therefore applies.

80. The Commission submits that being available for work and job-seeking are requirements which are not dissociable from the status of an unemployed person, and that they justify restricting the possibility of exporting entitlement to unemployment benefits. Since the Belgian legislation has abolished those requirements for unemployed persons over the age of 50, it argues, restricting exportation of entitlement to unemployment benefits no longer appears to be justified.

81. That argument might contain force were Member States obliged by Regulation No 1408/71 not to restrict such entitlement on grounds relating to re-employment.

82. However, Article 10(1) and the rules on entitlement to unemployment benefit, taken together, patently indicate the opposite: Member States are not prohibited from restricting exportation of entitlement. It would be strange if those provisions were interpreted to mean that Member States must justify a rule such as the one at issue which imposes a restriction on exporting entitlement.

83. For the above reasons the provisions of Regulation No 1408/71 do not entitle an unemployed person who is not required to be available for work to unemployment benefit where he is resident in a Member State other than the competent State.

84. Furthermore, there are strong practical reasons for not allowing the exportation of unemployment benefit, which I have already mentioned (17) and to which several of the parties have referred in their submissions.

85. First, Member States must be able to use unemployment benefits as instruments of their labour market and employment policy, and that is particularly the case given the more strict application of the availability-for-work criterion for older unemployed persons in recent years. A residence requirement is obviously necessary to ensure satisfactory implementation of such policy.

86. Second, as France submits, an unemployed person has the greatest chance of finding work in the last State of employment. It is therefore in the interests of employment policy that entitlement to unemployment benefit is made conditional on residence in that State.

87. Third, as ONEM, France and Germany argue, a residence requirement is necessary to allow checks to be carried out on the claimant's family situation and on any remunerated activity which may affect entitlement to unemployment benefit. Such checks are necessary to avoid abuse. Aside from the exceptional situations set out in Articles 69 and 71 of Regulation No 1408/71, which do not apply here, there is no organised cooperation between the authorities of the Member States for monitoring the situation of a person receiving unemployment benefit who moves from the competent State to another Member State.

88. Thus, in this case, there is no monitoring system in place for checks to be carried out on Mr De Cuyper's family situation and on any remunerated activity he might undertake while in France. In the absence of any system of cooperation between the Belgian and French authorities for monitoring regular entitlement to unemployment benefit, neither State's authorities would be competent to check those matters.

89. It follows that a residence requirement is appropriate in order to ensure that effective checks on an unemployed person's family situation and on any remunerated activity are carried out.

90. Fourth, to allow the exportation of unemployment benefit would be to admit unfair competition onto the labour market of the Member State to which the unemployed person moves. That would clearly be the result if nationals of one Member State with such entitlement could enter the labour market of a second Member State: they would have an unfair financial advantage over nationals of the second Member State who sought to enter the labour market but whose income would, of course, in general not be subsidised.

91. Fifth, as the Netherlands submitted at the hearing, a link between the financing and issuing of benefits must be preserved. Payment of benefits from a Member State's budget is an expression of solidarity between its residents. It is a means of promoting social cohesion, and avoiding social exclusion and the problems to which it gives rise. Exportation of benefits might undermine social cohesion and could lead to a disproportionate financial burden being carried by the residents of one Member State.

92. In the event that Regulation No 1408/71 is found to apply, the issue remains as to how the questions referred should be considered in the light of Articles 17 EC and 18 EC.

93. Mr De Cuyper argues that the residence requirement contained in Article 66 of the Royal Decree of 25 November 1991 infringes the right of citizens of the Union to move and reside freely within the Community. The Commission makes a similar submission, whether the benefit at issue is considered to be a social advantage within the meaning of Article 7(2) of Regulation No 1612/68 or an unemployment benefit under Regulation No 1408/71.

94. Mr De Cuyper submits that the residence requirement discourages a citizen of the Union from exercising the right to move freely by removing entitlement to unemployment benefit when he moves to another Member State. In his case, he argues, he is in fact prevented from exercising that right since without that entitlement he no longer has sufficient resources so as not to become a financial burden on the Member State to which he moves and would therefore lose the right to reside in France pursuant to Directive 90/364. (18) He argues that the residence requirement is disproportionate to the aim of controlling the fulfilment of conditions for entitlement to the benefit at issue, particularly where exemption is granted from the obligation to report to the employment services and to be available for work. In addition he submits that, in comparing those entitled to the benefit, the residence requirement also discriminates against recipients who exercise their right as a citizen of the Union to move to another Member State in relation to those who remain in Belgium.

95. The Commission submits that if the benefit qualifies as a social advantage under Article 7(2) of Regulation No 1612/68 the refusal to grant it in the event that the recipient moves to another Member State infringes the right of a citizen of the Union to equal treatment with the nationals of the Member State of which he is a national who remain in that State. In its view, in Pusa (19) the Court applied that reasoning to the situation of a Finnish national resident in Spain who claimed equal treatment with Finnish nationals resident in Finland.

96. The Commission states that objective considerations relating to a need to ensure that the recipient has a link with the relevant employment market are not relevant given the exemption from being available for work. Further, those relating to administrative difficulties in checking compliance with the conditions for granting the benefit cannot justify derogation from the rules of Community law, and that principle applies in particular where a restriction on the exercise of one of the fundamental freedoms is alleged. (20)

97. If the benefit qualifies as an unemployment benefit under Regulation No 1408/71 the Commission submits that conditions relating to entitlement may be justified on the ground that they are related to the promotion of job-seeking. Since an exemption from the requirement of job-seeking has been granted, the restriction on exportation of entitlement to unemployment benefit is no longer justified.

98. ONEM, Belgium, France and Germany argue that any restriction on the right of citizens of the Union to move and reside freely may be justified.

99. ONEM submits that the restriction on the right to move freely imposed by the residence requirement is justified by the principle contained in Regulation No 1408/71 that entitlement to unemployment benefits may not be exported; and the fact that it cannot carry out checks necessary to ensure compliance with conditions for entitlement to unemployment benefit. Since residence in Belgium is required for ONEM to ensure that benefits are not unduly paid, the residence requirement is proportionate. That requirement applies regardless of nationality and does not therefore give rise to unequal treatment.

100. France argues that the residence requirement may be justified on three grounds. First, in Müller-Fauré (21) the Court held that in the absence of harmonisation it is for the Member States to determine the conditions under which social security benefits are granted. Therefore in general the Member States may choose which conditions to impose on the granting of unemployment benefits. Second, the residence requirement is justified because an unemployed person has the greatest chance of finding work in the last State of employment. Third, it is also justified by the need to carry out checks on any remunerated activity carried out by the recipient and on his family situation.

101. Germany submits that the residence requirement pursues the legitimate aim of guaranteeing checks on requirements entitling the recipient to unemployment benefit and preventing any abuse of the granting of such benefits. Since there are no means of ensuring the achievement of that aim other than on-site checks, the residence requirement is appropriate and, Germany concludes, proportionate. Articles 12 EC and 18 EC can only give rise to a prohibition on discrimination for legislation directly related to freedom of movement and of residence in another Member State.

102. Mr De Cuyper is a Belgian national residing in France. He is a citizen of the Union who has exercised the right to move and reside freely within the territory of the Member States. His complaint before the national court arises from the fact that entitlement to the benefit which he received while resident in Belgium was lost when he moved to France.

103. Those circumstances fall within the scope of Community law and Mr De Cuyper may therefore rely on the rights it confers on him, in particular the right to move and reside freely within the territory of the Member States. (22)

105. That provision confers on a citizen of the Union the right to move and reside freely within the territory of the Member States, subject to any limitations or conditions laid down in the Treaty and its implementing measures. None of those terms imply that they apply only where discrimination is found to exist.

106. Moreover, even where freedom of movement in other respects is explicitly guaranteed in the Treaty by a prohibition on discrimination, the Court has interpreted that right to preclude non-discriminatory measures. (23) The case-law on Article 39 EC illustrates that the freedom of movement for workers, for example, may preclude non-discriminatory measures. (24)

107. It would not therefore seem necessary to interpret Article 18 EC, which sets out a right to freedom of movement and of residence without reference to a prohibition on discrimination, as meaning that it may only apply where a measure is discriminatory.

108. The question, rather, is whether a measure imposes any restriction on the exercise of the right to move and reside freely by a citizen of the Union, and if so whether such a restriction may be justified.

109. In the present case, it should be asked whether the residence requirement is an unjustified restriction on those exercising that right.

110. Evidently, the effect of the residence requirement is to restrict the right of a citizen of the Union to move and reside freely within the Community.

111. It must therefore be considered whether such a restriction may be justified under Articles 17 and 18 EC.

112. As ONEM and Belgium submit, Article 18(1) EC states that it is subject to the limitations and conditions laid down in the Treaty and by the measures adopted to give it effect; Article 42 EC provides for the adoption of such measures in the field of social security as are necessary to provide freedom of movement for workers; since Regulation No 1408/71 was adopted on the basis of Article 42 EC it qualifies as a measure adopted to give effect to the Treaty under Article 18(1) EC.

113. In my view, there is therefore no question that the right to free movement under Article 18 EC is limited by the general principle arising from Regulation No 1408/71 that unemployment benefit may not be exported.

114. That view is supported by the case-law, cited by France, which states that Community law does not detract from the power of the Member States to organise their social security systems. Regulation No 1408/71 links, rather than harmonises, the social security systems of the Member States in such a way that national competence is preserved. In the absence of harmonisation, as the Court has stated previously, it is for the Member States to determine the conditions under which social security benefits are granted. (25)

115. In general, then, it is not for the Community to interfere with the setting of those conditions, as also follows from Article 137 EC. (26)

116. Moreover, to hold that a residence requirement is an unjustified restriction on the free movement of a citizen of the Union would undermine entirely the purpose of the rules on unemployment benefit in Regulation No 1408/71 and would run counter to Article 10(1) of that regulation.

117. There is no reason to suppose that the introduction of the Treaty articles on citizenship of the Union were intended to have that effect.

118. It follows that as a matter of Community law a condition imposed by a Member State that requires the recipient of unemployment benefit to be resident in that State is not contrary to Articles 17 and 18 EC.

119. The residence requirement imposed by Article 66 of the Royal Decree of 25 November 1991 therefore does not infringe Articles 17 and 18 EC: such a restriction on the right of a citizen of the Union to move and reside freely is justified on the ground that entitlement to unemployment benefit may not be exported to another Member State in accordance with the provisions of Regulation No 1408/71.

120. For the reasons set out above, I am of the opinion that the Court should reply as follows to the questions referred by the Tribunal du Travail:

2 - Council Regulation (EEC) No 1612/68 of 15 October 1968 on freedom of movement for workers within the Community (OJ, English Special Edition 1968(II), p. 475), as amended by Council Regulation (EEC) No 2434/92 of 27 July 1992 (OJ 1992 L 245, p. 1).

3 - Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, in the version enacted by Council Regulation (EEC) No 2001/83 (OJ 1983 L 230, p. 6, Annex I). The text of the regulation as further amended may be found in Part I of Annex A to Council Regulation (EC) No 118/97 of 2 December 1996 (OJ 1997 L 28, p. 1).

12 - In Otte, the adaptation allowance would only be paid if the claimant would have fulfilled the conditions for entitlement to a retirement pension within five years had he retained his post (see paragraph 6 of the judgment).

16 - Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ 2004 L 166, pp. 1 to 123). See in particular Articles 64 and 65.

18 - Council Directive 90/364/EEC of 28 June 1990 on the right of residence (OJ 1990 L 180, p. 26).

20 - In that regard, the Commission relies on Case C-18/95 Terhoeve [1999] ECR I-345.

23 - In relation to the free movement of services, see Case C-76/90 Säger [1991] ECR 4221, paragraph 12. In the context of the free movement of capital, see Case C-483/99 Commission v France [2002] ECR I-4781, paragraph 41, and Case C-367/98 Commission v Portugal [2002] ECR I-4731, paragraph 45.

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	Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> De Cuyper (European citizenship) [2006] EUECJ C-406/04 (18 July 2006) URL: http://www.bailii.org/eu/cases/EUECJ/2006/C40604.html Cite as: [2006] CEC 937, [2006] EUECJ C-406/04, [2007] ICR 317, [2006] EUECJ C-406/4, [2006] ECR I-6947, [2006] All ER (EC) 947, [2006] 3 CMLR 44

Court of Justice of the European Communities (including Court of First Instance Decisions)