Report for the Hearing delivered in Joined Cases 389 and 390/87

I — Facts and procedure

1. Legal background

On 1 October 1986, a new system of financing studies was introduced in the Netherlands by the Wet op de Studiefinanciering (Law on Study Finance, hereinafter referred to as the Study Finance Law). Its aim was to provide students with an income to enable them to meet the costs of their studies and of their maintenance. Netherlands students and students treated as such aged between 18 and 30 are entitled to an allowance, regardless of their parents' financial position.

That allowance is calculated on the basis of a standard student budget, made up of a fixed amount for each of the items of expenditure of an average student. The following amounts are taken into account:

The provision of finance takes two different forms: a basic grant and supplementary finance. The basic grant, which applies to all types of education, is nonrefundable; its amount varies according to whether the student lives with his parents or not. In the latter case, the supplementary allowance for a dependent partner or dependent child may be added to the grant. Supplementary finance takes the form of an interest-bearing loan or a supplementary grant dependent on the financial situation of the student, his partner, and his parents. The loan must be repaid within a period of 15 years from the completion of the studies.

The Netherlands Vreemdelingenwet (Aliens Law) provides for two types of residence permit. A residence permit for a limited period (verblijfsvergunning) is issued to nationals of other Member States who are salaried employees in the Netherlands. Other aliens may obtain a residence permit for a specified purpose and for a limited period, for example for the completion of studies. An establishment permit for an indefinite period (vergunning tot vestiging) is generally issued to aliens over the age of majority who have had their principal place of residence in the Netherlands for at least five years, unless they have insufficient means of support or are a danger to law and order.

Under the Study Finance Law foreign students in possession of a residence permit for an indefinite period are treated in the same manner as Netherlands nationals. They are covered by the study finance system if they are under 23 years of age and their parents have resided in the Netherlands for at least three years without interruption. That three-year requirement does not apply when at least one parent is or has been employed in the Netherlands and is a national of one of the Member States of the European Communities or of certain other countries (Yugoslavia, Morocco, Tunisia, Turkey and Sweden).

Students who have themselves been resident in the Netherlands for an uninterrupted period of three years and who are orphaned, married or over 21 years of age may also receive study finance unless they have a fixed-duration residence permit for a temporary purpose.

Applications for study finance must be submitted to the Study Finance Office; a student refused finance may apply to the Minister for Education and Science (hereinafter referred to as the Minister) for a review of the decision. An appeal against the Minister's decision lies to the Commissie van Beroep Studiefinanciering (Study Finance Appeals Committee, hereinafter referred to as the Appeals Committee).

2. Background to the issues before the national court

Case 389/87 (Echternach)

Mr G. B. C. Echternach is a student of German nationality born in 1962, who has lived in the Netherlands since the age of four. His father, who initially worked for the Netherlands chemicals undertaking DSM, is now employed at the European Space Agency (ESA) at Noordwijk. During the period of his employment with DSM, he was in possession of a residence permit as provided for in the Vreemdelingenwet. The ESA is an international organization members of whose staff and their families enjoy particular privileges and immunities, and Mr Echternach's father and his family now belong to a category of aliens protected by an international agreement, to whom the Vreemdelingenwet does not apply.

In September 1981, Mr Echternach began to study economics at the Erasmusuniversiteit, Rotterdam. In April 1986, he submitted an application for study finance, which was refused on the ground that he held an identity document issued by the ESA and could not therefore be treated in the same manner as a Netherlands student, since the Vreemdelingenwet did not apply to privileged aliens enjoying a special status. The Minister upheld that decision and Mr Echternach appealed to the Appeals Committee.

In July 1987, Mr Echternach obtained a residence permit as provided for in the Vreemdelingenwet on the ground that he was living together with a Dutch national.

The Appeals Committee referred the following questions to the Court for a preliminary ruling pursuant to Article 177 of the EEC Treaty:

Case 390/87 (Moritz)

Mr A. Moritz was born in 1966 and is a German national. He went with his parents to live in the Netherlands in January 1972. At that time, his father was employed by Urenco Nederland Operations BV at Almelo. Mr Moritz received his primary and secondary education in the Netherlands, then he began a course of study at the technical college (HTS) at Enschede, the Netherlands, in August 1984. On 24 March 1982, he was granted a residence permit valid for an indefinite period.

In July 1985, his father was posted to Urenco's German facility at Gronau, 15 kilometres to the east of Almelo, where he settled with his family. Mr Moritz tried to continue his studies at the Fachhochschule Münster but that establishment did not recognize the Netherlands certificate of secondary education. He therefore enrolled again at the HTS at Enschede in October 1985 with a view to continuing his studies in the Netherlands. In November 1986, he again took up residence in the Netherlands, at Enschede, where he was granted a residence permit for the duration of his studies. In May 1986, he submitted an application for study finance, which was refused.

An application for a review of that refusal was rejected on the ground that he had been granted only a residence permit for a temporary purpose and that he was therefore not a foreign student to be treated in the same way as a Netherlands student. Mr Moritz appealed against that decision to the Study Finance Appeals Committee, which referred the following questions to the Court for a preliminary ruling under Article 177 of the EEC Treaty:

3. Observations of the Appeals Committee

In the Echtemach case, the Appeals Committee considered that the meaning of the words employment in the public service used in Article 48(4) of the EEC Treaty should be considered with reference to international organizations. In its judgment of 12 February 1974 in Case 152/73 Sotgiu v Deutsche Bundespost [1974] ECR 153, the Court ruled that a national of another Member State may, once he has been admitted to the public service, rely on the principle of nondiscrimination laid down in Article 48 of the Treaty. Furthermore, it is clear from the judgment of 17 December 1980 in Case 149/79 (Commission v Belgium [1980] ECR 3881) that the concept of public service is to be interpreted restrictively in accordance with the purpose of Article 48(4) of the Treaty because the exception laid down in that provision relates exclusively to participation in the exercise of powers conferred by public law. If the prohibition of discrimination contained in Article 48 of the EEC Treaty applies with regard to Mr Echternach's father and the members of his family, it must be determined whether that situation has any effect on the right to study finance in application of Article 12 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).

In the Moritz case, the Appeals Committee found that Mr Moritz's father was to be regarded as a national of a Member State who had been employed in the territory of another Member State for the purposes of Regulation (EEC) No 1612/68. The fifth recital in the preamble to that regulation states that it was adopted because the right of freedom of movement requires that obstacles to the mobility of workers should be eliminated, in particular as regards a worker's right to be joined by his family and the conditions for the integration of that family into the host country. The Appeals Committee is therefore uncertain whether the restrictive provisions in the Study Finance Law are compatible with the purpose of Regulation (EEC) No 1612/68, particularly in so far as the right to study finance is made conditional on the possession of a residence permit. It is also uncertain whether the authorities in the host country may refuse to issue a permanent residence permit to children of Community workers. It points out that a scheme such as that established by the Study Finance Law might be regarded as a general measure intended to promote educational attendance within the meaning of Article 12 of Regulation (EEC) No 1612/68.

4. Procedure

The Appeals Committee's requests were received at the Court Registry on 30 December 1987.

By an order of the Court of 24 February 1988 made under Article 43 of the Rules of Procedure, Cases 389/87 and 390/87 were joined for the purposes of the written and oral procedure and the judgment.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted by

the Netherlands Government, represented by E. F. Jacobs, Secretary-General of the Ministry of Foreign Affairs,

the Portuguese Government, represented by Luís Fernandes, Head of the Legal Affairs Directorate in the Directorate-General for the European Communities, assisted by Lena Real, Legal Officer in the Directorate-General for the European Communities, acting as Agents, and the Commission of the European Communities, represented by D. Gouloussis, Legal Adviser, and B. J. Drijber, a member of its Legal Department, acting as Agents.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to assign the case to the Sixth Chamber and to open the oral procedure without any preparatory inquiry.

II — Summary of the written observations submitted to the Court

1. Jurisdiction of the Court

The Netherlands Government explains first of all that the Study Finance Appeals Committee is a special administrative tribunal set up under the Study Finance Law, which also regulates its membership and functions. The Committee is responsible for reviewing the legality of the Minister's decisions on study finance. No appeal lies from its decisions. The Netherlands Government concludes that the Appeals Committee is a court or tribunal of a Member State referred to in the third paragraph of Article 177 of the EEC Treaty, in accordance with the criteria laid down by the Court in its judgment of 6 October 1981 in Case 246/80 Broekmeulen v Huisarts Registratie Commissie [1981] ECR 2311.

2. Substantive scope of Article 12 of Regulation (EEC) No 1612/68 (Questions 5 and 6 in Case 389/87; Questions 1 and 5 in Case 390/87)

The Netherlands Government considers that Regulation (EEC) No 1612/68 is not applicable in Case 389/87 or in Case 390/87.

In Mr Echternach's case, the rights and duties of the son are determined solely by his father's employment relationship with the ESA. Furthermore, the student has not been a member of his parents' household since 30 June 1987; he has his own accommodation and a residence permit in his own right. He is over the age of majority and lives with a partner. It should therefore be concluded that Mr Echternach is no longer supported by his parents and that he thus no longer forms part of the family for the purposes of Article 12 of Regulation (EEC) No 1612/68.

Mr Moritz moved to the Netherlands after residing for more than a year in Germany with his parents. After returning to the Netherlands, he was granted a temporary residence permit for the purpose of his studies. He may not therefore rely on Regulation (EEC) No 1612/68.

The Portuguese Government observes that the purpose of Article 12 of Regulation (EEC) No 1612/68 is to ensure that the right of freedom of movement for workers can be exercised. A restrictive interpretation is unacceptable since it would be an additional barrier to freedom of movement for workers.

The Commission considers that the answers to the questions are already to be found in the Court's previous decisions. The Court has already ruled on the scope of the term vocational training as used in Article 128 of the EEC Treaty, in particular in its judgment of 13 February 1985 in Case 293/83 Gravier v City of Liège [1985] ECR 593.

In its judgment of 2 February 1988 in Case 24/86 Blaizot v University of Liège [1988] ECR 379, the Court accepted that university studies do, in principle, fall within the meaning of the term vocational training.

The Commission also considers that Article 12 of Regulation (EEC) No 1612/68 recognizes the right of children of migrant workers to attend educational courses under the same conditions as children of national workers. In order for the interpretation of that provision to be consistent with that of Article 128 of the EEC Treaty, it must be accepted that that right extends to university studies and to advanced vocational training such as that provided in a hogere technische school.

The Commission adds that, in its observations submitted in Cases 39/86 Lair v Universität Hannover [1988] ECR 3161 and 197/86 Brown v Secretary of State for Scotland [1988] ECR 3205 (judgments of 21 June 1988), it argued that a study grant awarded to cover a university student's maintenance falls within the scope of both Article 7(3) and Article 12 of Regulation (EEC) No 1612/68, and that Articles 7(3) and 12 should be interpreted in an identical manner. It makes no difference to the application of those provisions whether a study grant is awarded to cover tuition and registration fees or whether it serves for the student's maintenance, since both items are covered by Article 12. Therefore the contribution to study finance awarded by the Netherlands Government to students following university courses or advanced vocational training falls within the scope of Article 12.

3. Applicability of Article 48(1) and (4) of the EEC Treaty (Questions 1 and 2 in Case 389/87)

In the view of the Netherlands Government, it is necessary first to consider the position of the ESA. The convention establishing the ESA, which entered into force on 30 October 1980, was the result of the amalgamation of the European Space Research Organization (ESRO) and the European Launching Development Organization (ELDO). The ESA assumed all the rights and obligations of its two predecessors. The status of the Noordwijk research centre and of its staff was laid down as early as 1967. The Protocol on Privileges and Immunities of the ESA provides that members of its staff are to be exempted from all measures restricting immigration and to enjoy all the facilities normally accorded to staff members of international organizations. The salaries and emoluments of staff members are to be exempt from national income tax. The fact that the ESA is an international organization governed by international law and that its staff members enjoy privileges and immunities implies, in the Netherlands Government's view, that persons employed by the ESA may derive rights and obligations only from their capacity as staff members and the abovementioned protocol. They cannot claim any rights under Article 48 of the Treaty and members of their families cannot therefore derive any entitlement from Regulation (EEC) No 1612/68.

The fact that Mr Echternach's father was previously employed by DSM does not affect that situation. When Mr Echternach's father started work at the ESA, a different set of legal provisions applied to him. With regard to the rights deriving from Regulation (EEC) No 1612/68, the situation of an ESA staff member is no different from that of a worker employed in the public service.

The Portuguese Government and the Commission observe that a national of a Member State employed in the territory of another Member State by an international organization established by an international convention is to be regarded as a worker for the purposes of Article 48 of the EEC Treaty. In its judgment of 13 July 1983 in Case 152/82 Forcheri v Belgium [1983] ECR 2323 the Court held that the legal position of officials of the Community in the Member States in which they are employed comes within the scope of the Treaty on a dual basis by reason of their post with the Community and because they must enjoy all the benefits flowing from Community law for the nationals of Member States in relation to freedom of movement, freedom of establishment and social security. That rule should also apply to officials of other international organizations such as the ESA.

The Commission further considers that the Minister cannot invoke the exception provided for in Article 48(4) of the EEC Treaty because that provision concerns only employment in the public service of the Member States themselves and not in international organizations such as the ESA. The Commission adds that, in its judgment in Sotgiu, cited above, the Court ruled that the exception contained in Article 48(4) concerns only access to posts in the public service; once a national of a Member State has been admitted to the public service, the prohibition of discrimination contained in Article 48 fully applies.

The Commission concludes that Mr Echternach's father is a migrant worker and that the provisions of Regulation (EEC) No 1612/68 are applicable to the members of his family by virtue of his employment at the ESA. In those circumstances, it is not necessary to go into the question whether his previous employment with DSM could provide him with a further basis for claiming rights under that regulation.

The Portuguese Government points out that the sole exception provided for by the EEC Treaty relates only to access to posts in the public service involving the exercise of powers conferred by public law. A predetermined restriction of access to such posts, based on nationality, would be acceptable. However, the exception contained in Article 48(4) can no longer be applied with regard to a worker once he has been admitted to the service of an international organization.

4. The relationship between the right of residence of children of migrant workers and their right to study finance (Questions 3 and 4 in Case 389/87; Questions 2, 3 and 4 in Case 390/87)

The Portuguese Government submits that Article 12 of Regulation (EEC) No 1612/68 requires the child of a worker to reside in the Member State in which he wishes to receive education. That condition of residence is a question of fact, regardless of possession of a residence permit. In its judgment of 8 April 1976 in Case 48/75 Royer [1976] ECR 497, the Court held that the right of nationals of a Member State to enter the territory of another Member State and reside there is a right conferred directly by the Treaty on any person falling within the scope of Community law. A measure by a Member State is not necessary to confer the rights on those concerned, since no Member State can restrict or obstruct their exercise of those rights. The fact, therefore, that a student is in possession only of an identity document issued by an international organization which exempts him from the requirement to hold a specific residence permit, or that he holds only a temporary residence permit, can have no effect on the right of residence conferred directly on him by the EEC Treaty.

The Commission remarks that Article 10 of Regulation (EEC) No 1612/68 gives migrant workers the right to bring their children to live with them in the territory of the Member State in which they are employed. Where children of migrant workers themselves enjoy rights under Article 12 of the regulation, Article 10 confers a right of residence on them. Those rights cannot be made subject to further requirements laid down in national law.

The Commission also points out, with particular regard to Question 4 (b), that a Member State cannot deny certain categories of aliens rights under Community law on the ground that the privileges granted to such aliens render those rights superfluous, so to speak. Such an interpretation would mean, in effect, applying their own privileges to the detriment of privileged aliens. In the Echternach case, however, it is sufficient to state that such a result would be incompatible with Article 10 of Regulation (EEC) No 1612/68. Requirements relating to residence permits cannot adversely affect the rights that the child of a migrant worker derives from Article 12 of Regulation (EEC) No 1612/68.

The Netherlands Government observes, with regard to Question 4 (a), that even if Regulation (EEC) No 1612/68 were applicable to the father of Mr Echternach, he could not in any event derive any rights from Article 12 thereof, since he no longer forms part of his father's family.

With regard to the Moritz case, the Portuguese Government observes that the essential question is the meaning of the expression children of a national of a Member State who ... has been employed in the territory of another Member State in Article 12 of Regulation (EEC) No 1612/68. In previous decisions, the Court has held that provisions of Community law which create rights may not be interpreted restrictively, since the achievement of the objectives of the Treaty might thereby be rendered more difficult. The Court gives Article 12 a wide interpretation, rightly considering that the right to freedom of movement provided for by the Treaty would otherwise be seriously affected. If Article 12 were to apply only to children of nationals of other Member States who have ceased to work either through death or because they have acquired the right to remain permanently in the host country under Regulation (EEC) No 1251/70, the exercise by workers of the right of freedom of movement within the Community would be seriously jeopardized. The impossibility for members of workers' families to exercise their right to move freely within the territory of the Community would limit that freedom.

The Netherlands Government points out that in so far as Regulation (EEC) No 1612/68 contains provisions to the advantage of members of migrant workers' families, the rights concerned are rights derived from those of the worker himself. The Treaty does not confer any independent right on children. In its judgment of 13 February 1985 in Case 267/83 Diatta v Land Berlin [1985] ECR 567, the Court held that it was clear from the terms of Article 11 of Regulation (EEC) No 1612/68 that it did not confer on the members of a migrant worker's family an independent right of residence, but solely a right to exercise any activity as employed persons throughout the territory of the host State. Article 11 cannot therefore constitute the legal basis for a right of residence without reference to the conditions laid down in Article 10.By analogy, it would be equally impossible to derive an independent right of residence from Article 12 of the regulation without reference to Article 10.

Regulation (EEC) No 1612/68 was drafted on the assumption that the rights of family members could not have a wider scope than those of the worker himself. It was stated at the time that the rights of children to have access to education in accordance with that provision had to have the same duration as the worker's right to remain in the State where he worked. The expression a national of a Member State who is or has been employed ... , as appearing in Article 12, can therefore only relate to children of a national of a Member State who is himself still entitled to derive rights from the regulation. When a student's parents have returned to their State of origin and the child remains in the former host country, it is therefore relevant whether the student holds a residence permit for a fixed or indeterminate period.

With regard to Questions 3 (c), (d) and (e) in the Moritz case, the Netherlands Government observes that, for the purposes of Regulation (EEC) No 1612/68, a child's right to remain in the host Member State in order to continue his studies is subject to the condition that he must have a right of residence in that State. If a child wishes to reside in the former host Member State, it must be determined whether the conditions for the issue of a residence permit of his own are met. From the point of view of national law, the question whether the child's principal place of residence has changed will determine the nature of any right of residence he may enjoy.

With regard to the Moritz case, the Commission first considers the scope of Article 12 of Regulation (EEC) No 1612/68. That provision should be interpreted so as to confer a right on a child who has lived with his parents in a Member State while one of the parents was employed there. The parent's departure from the Member State does not deprive the child of his rights. The decisive criterion is whether the studies of the child of a former migrant worker are related to his previous residence with his parents in the Member State in question. It is not necessary for the worker to have retained his employment or residence in the host Member State. The derivative right conferred on his children by Article 12 survives even after the father's death, retirement or return to his country of origin.

Such an interpretation is of particular importance in a case such as this, which shows, in the Commission's view, that a national of a Member State who derived rights under Anicie 12 at the secondary education stage must also be able to do so during the following stage. Otherwise a student like Mr Moritz would eventually find himself at a dead end, as can be seen from the fact that the Fachhochschule Münster will not recognize his Netherlands certificate. The only solution for such a student is to continue his studies in the Netherlands education system.

In the Commission's view, the second and third questions seek to ascertain whether Mr Moritz may derive from Article 12 of Regulation (EEC) No 1612/68 or from any other provision of Community law a right of residence in the host Member State for the purpose of continuing his training there after his parents had returned to Germany and he had initially accompanied them. If so, the Appeals Committee wishes to know whether the authorities of the host Member State may confine themselves to issuing a residence permit subject to conditions restricting the length of stay. Presumably those questions were prompted by the fact that under Netherlands legislation the right of aliens to receive study finance is conditional on the issue of a residence permit. In the Commission's view, those questions no longer require consideration if the Court shares the view that Article 12 of Regulation (EEC) No 1612/68 confers on the student a right to receive study finance.

The Commission adds, however, that the authorities of Member States must respect the rights of residence of aliens who may rely on Article 10 of Regulation (EEC) No 1612/68. They may not make that residence subject to any limitation not provided for in the regulation. The duration of the right of residence and the main rules to be observed by national authorities when granting that right are governed by Council Directive 68/360/EEC of 15 October 1968 (Official Journal, English Special Edition 1968 (II), p. 485). Migrant workers and members of their families are to be issued with residence permits valid for at least five years and automatically renewable. There is, however, no provision of Community law requiring them to be issued with a residence permit for an indefinite period, as is suggested in Question 3 (e).

III — Conclusions

The Portuguese Government proposes that the questions should be answered as follows:

The Commission proposes the following answers :

1 Language of the case Dutch.