Opinion of Advocate General
Mr President,
Members of the Court,
1. In this case the Bundessozialgericht is asking the Court whether the Community prohibition of discrimination on grounds of nationality requires a Member State which has concluded a bilateral social security convention with a third country to extend the advantages resulting for its own nationals from the provisions of the convention to the nationals of all other Member States if they work in the territory of the Member State concerned and arc subject to a social security scheme there. More specifically the question is whether the principle of equal treatment laid down in Articles 7 and 48 of the EEC Treaty and in Article 3 of Regulation No 1408/71 has that scope.
Background to the case
2. Maria Grana-Novoa is of Spanish nationality. She has never pursued in Spain any activity on the basis of which she was compulsorily insured. From December 1970 to June 1975 she worked in Switzerland, where she was compulsorily insured. In November 1976 she went to the Federal Republic of Germany where she worked from February 1979 to October 1982 (a total of 44 months), as a result of which she was compulsorily insured. Since then she has been incapacitated. A doctor established that she was suffering from a form of disseminated encephalomyelitis — mainly located in the brain — and on 10 August 1983 she applied for an invalidity pension to the Landesversicherungsanstalt Hessen (hereinafter the LVA Hessen), which, by a decision of 11 November 1983, rejected the application, stating that Ms Grana-Novoa had indeed been unable to work since 25 August 1983, but that the qualifying period was not yet completed. The German Social Security Law (in particular paragraph 1247 of the Rcichsversicherungsordnung) lays down as a condition for an invalidity pension that the insured must have completed a qualifying period of 60 months' insurance before the onset of the incapacity for work or 240 months' insurance before the application for the invalidity pension is made.
3. Before going into those questions I should like to outline briefly the provisions of the relevant international conventions. The aforementioned Convention between Germany and Switzerland of 25 February 1964 (hereinafter referred to as the Convention), supplemented by a convention of 9 September 1975, prescribes inter alia that, with a view to the acquisition of a right to social security benefits under the German legislation, account must also be taken of the insurance periods completed under Swiss law where the insurance periods to be considered under German law amount to at least 12 months.
4. However, the Bundessozialgericht thinks it is not impossible that the principle of equal treatment laid down by Community law, namely by Article 7 of the EEC Treaty and Article 3(1) of Regulation No 1408/71, prevents the application of the said exclusion clause. In that respect it refers the following two questions to the Court for a preliminary ruling:
Is a bilateral convention concluded by a Member State with a third country legislation within the meaning of Article 3(1) of Regulation No 1408/71?
5. The Bundessozialgericht's first question is whether a convention concluded by a Member State with a third country, which has become, as a statute, part of the national law of that Member State, falls as such within the scope of Regulation No 1408/71 and more particularly of the principle of equal treatment contained therein. I would mention that that principle is expressed in Article 3(1) of the regulation in the following terms:
6. There are two diametrically opposed views before the Court with regard to this first question: that of the LVA Hessen and the German and United Kingdom Governments, joined at the hearing by the Netherlands Government, all of which think that a negative answer should be given, and that of Ms Grana-Novoa, the Italian and Portuguese Governments and the Commission, according to whom the answer should be in the affirmative.
7. As regards the text of Regulation No 1408/71, I must point straight away to the distinction which the regulation makes with regard to the definitions given at the beginning between the concept of legislation on the one hand (Article l(j); see section 5 above) and that of social security convention on the other hand. The latter includes, according to Article l(k):
8. The reason for this restricted definition of the concept of social security convention becomes clear when it is related to the system for which Regulation No 1408/71 provides with regard to such conventions in Article 3(3) and Articles 6, 7 and 8 of the regulation.
9. It appears from this brief survey that Regulation No 1408/71 does not settle the position of bilateral conventions concluded by a single Member State with a third country in the field of social security as regards either the question of the replacement or the continued validity of international conventions or the application of the principle of equal treatment in respect thereof. Can it in these circumstances have been the intention of the Community legislature to regulate the status of such bilateral conventions by implication and to bring them within the field of application of Regulation No 1408/71 by allowing them to come within the concept of legislation in Article l(j)? I find that hard to imagine.
10. The idea that bilateral conventions concluded between a Member State and a third country do not come within the concept of legislation in Article l(j) of Regulation No 1408/71 is moreover confirmed by the case-law of the Court, in which respect I may refer above all to the judgments in Cases 16/72 Ortskrankenkasse Hamburg, in Case 75/76 Kaucic v Institut Assurances Maladie-Invalidité and in Case 21/87 Borowitz v Bundesversicherungsanstalt für Angestellte. In Ortskrankenkasse Hamburg the Bundessozialgericht had asked the Court inter alia whether an insurance organization of a Member State, in that instance Germany, must, for the acquisition of a right to certain benefits under Regulation No 3 (that is, the predecessor of Regulation No 1408/71), also take into account insurance periods which an insurance organization in another Member State (Italy) was bound to consider under a bilateral convention which that country had concluded with a third country (in that case Switzerland). The Court pointed out that Article 16 of Regulation No 3 (laying down the rules relating to aggregation for sickness and maternity benefits) referred only to insurance periods completed under the legislation of each of the Member States and that Article 1(b) of that regulation (which was very similar to Article l(j) of Regulation No 1408/71) stated that legislation meant only laws, regulations and other enforceable provisions (dispositions statutaires) present and future of each Member State relating to the social security schemes and branches of social security. The Court therefore concluded that:
11. The fact that Community law, in particular Regulation No 1408/71, does not require Member States to take account of insurance periods completed in third countries, but permits them to do so on a voluntary basis or pursuant to a bilateral convention between the Member State and the third country in question was confirmed in the Borowitz judgment. In that case the Bundessozialgericht had asked the Court whether the regulation prevented a German insurance institution, in deciding whether to include periods of non-payment of contribution within the meaning of the German legislation, from assimilating premiums, contributions and affiliation to an insurance scheme in a third country, namely Poland, with which the Federal Republic had concluded a bilateral convention on reciprocal assimilation of insurance periods, to compulsory premiums, contributions and affiliation to pension insurance in Germany (as it was required to do for premiums and contributions paid in other Member States and affiliation to insurance schemes there). The Court came to the conclusion that no provision of Regulation No 1408/71 precluded the German institution from treating periods of insurance completed under Polish legislation as equivalent to periods of insurance completed under its own legislation. The Court added:
12. Finally the solution suggested here is supported also by the special nature of a bilateral convention between a Member State and a third country. Such an agreement is the result of a process of negotiation between both States in which the respective contracting parties' rights and duties are usually based on the principle of reciprocity. That means that such conventions are based on a well-defined equilibrium — also as regards the financial consequences. There can be no doubt that the striking of such a balance would be seriously hampered and that the scope for negotiation of Member States and third countries would be severely restricted if the Member State in question were to work on the basis that the rights which it stipulates for its own nationals were also to be granted to all other Community citizens. In saying that I am not thinking solely of the position of social security conventions but also of other bilateral agreements based on a form of (financial) equilibrium of the reciprocal benefits, for example as with double taxation agreements.
13. Unlike the Italian and Portuguese Governments and the Commission, I do not think that any arguments to the contrary can be drawn from the judgments along the lines of Bozzone and the more recent judgment in Rönfeldt.
14. I come to the same conclusion with regard to the Rönfeldt judgment on which the Portuguese Government and the Commission to some extent base their arguments. That case did not concern, either, the question whether a bilateral convention between a Member State and a third country falls within the field of application of Regulation No 1408/71 as legislation. On the contrary, the central question was whether it was compatible with Articles 48(2) and 51 of the EEC Treaty for workers to lose social security advantages because a convention between two Member States was rendered inoperative by the entry into force of Regulation No 1408/71. The Court answered the question in the negative on the basis of its settled case-law in which it was deduced from a telcological reading of Articles 48 and 51 of the Treaty that Community law could not bring about a reduction in the benefits awarded by virtue of the legislation of a single Member State. For those reasons the Court decided that, in spite of Article 6 of the regulation previously discussed (in section 8) account should nevertheless be taken of such conventions between Member States as were more favourable to workers than the Community rules. The Court therefore stated:
In the alternative: scope of the principle of equal treatment in case Regulation No 1408/71 is applicable
15. If, in spite of the arguments set out above, the Court were to decide that bilateral conventions between a Member State and a third country were to be regarded as legislation for the application of Regulation No 1408/71, then the Bundessozialgericht's second question should in my view be answered in the affirmative. By that question the national court is asking whether, if the first question is answered in the affirmative, the principle of equal treatment laid down in Article 7 of the EEC Treaty and in Article 3(1) of Regulation No 1408/71 prevents the German insurance institutions to which application has been made for an old-age or invalidity pension-on the basis of the Convention and more specifically of paragraph 2 of the final protocol thereto (see section 3) — from taking account for German nationals only (and not for other EEC citizens) of the insurance periods completed in Switzerland.
16. If an agreement such as the Convention is to be regarded as legislation within the meaning of Article l(j), then the principle of equal treatment as laid down in Article 3(1) of the regulation must indeed be applied in its entirety. On that basis the German insurance institutions would then be required to take account of insurance periods completed in Switzerland for all Community citizens. The contrary arguments of the LVA Hessen and the German and United Kingdom Governments cannot prevent that. For the sake of completeness I shall briefly state why.
17. The idea that, as the ĽVA Hessen contends, the principles underlying Article 234 of the EEC Treaty must apply here too, in view of the fact in particular that the Community is not empowered to conclude an international social security convention finds no support in Community legislation or case-law. Even though it is for the Member States to conclude international conventions in a given field, they must, in exercising that power, take account of imperative provisions of Community law. Article 234 which, according to its own wording, is restricted to the rights and obligations resulting from conventions concluded by a Member State and a third country before the entry into force of the Treaty — and in this case the convention at issue is one concluded after the Treaty entered into force in Germany — cannot affect the position.
18. Nor is it possible to accept the argument put forward by the German Government that Articles 48 and 51 of the EEC Treaty and Regulation No 1408/71 can in no case be applied with regard to insurance periods completed outside the Community. In the judgment in Walrave the Court already recognized, with regard to the Community prohibition of discrimination, as expressed inter alia in Articles 7 and 48 of the Treaty, that the rule of non-discrimination, in view of its imperative nature, applies in judging all legal relationships in so far as, by reason either of the place where they are entered into or of the place where they take effect, they may be located within the territory of the Community.
19. I should like to add that in my view it is not possible, either, to base a valid argument against the application of Community law on the fact that, in a case such as this, there would be no obstacle to free movement of workers. If Ms Grana-Novoa had worked in Spain instead of in Germany, the insurance periods completed both in Switzerland and in Spain would have been taken into account on the basis of the convention between Spain and Switzerland (see section 2 above). It was therefore because she had worked in Germany, in other words because she exercised her right to freedom of movement, that the insurance periods which she had completed in Switzerland were lost.
20. On the supposition that the first question referred to the Court, contrary to my views put forward earlier, requires an answer in the affirmative, the answer to the second question should then be that the exclusion clause contained in paragraph 2 of the final protocol to the Convention cannot be applied. It follows from the principle of the primacy of Community law that any contrary provision of existing national law, including the international Convention, which on this supposition would form part of it, cannot be applied.
Conclusion
21. Having regard to the foregoing arguments, I suggest that the Court should reply as follows:
1 Original language. Dutch
2 Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons, to self employed persons and to mem bers of their families moving within the Community For this case reference may be made to the consolidated version of 1983 (OJ 1983 L 230, p. 6); in the meantime a more recent consolidated version has appeared in OJ 1992 C 325. p. 1.
3 Bundesgesetzblatt 1977, II, pp. 687 and 722.
4 BGBl. 1965, II, p. 1294.
5 Sec the reasoning on this point in the Report for the Hearing in section 7.
6 BGBl. 1976, II, p. 1372.
7 Including, according to the order for reference, the Federal Republic, at least as regards international conventions laying down rights and obligations in the sphere of social security.
8 With regard to the problems to which a dualistic system may lead as regards possible conflicts of laws and the application of the principle lex posterior derogat legi priori, see inter alia P. J. G. Kapteyn and P. VerLoren van Themaat, Introduction to the law of the European Communities, L. W. Gormley (ed.), Deventer, Kluwer Law & Taxation, Î988, pp. 40 and 41, and, with more particular reference to the German context, O. Kimminich, Einführung in das Völkerrecht, München, Saur, 1987, p. 265 et seq. See also the observations of M. Waelbroek putting the matter in perspective: Enforceability of the EEC-EFTA Free Trade Agreements: A Reply, Eur. L. Rev., 1978, pp. 27, 28 and 29.
9 The Court has repeatedly confirmed that this principle of substitution is of an imperative nature which permits of no exceptions apart from the cases expressly mentioned in the regulation: see (with regard to the analogous provision of Article 5 of Regulation No 3) the judgments in Case 32/72 Walder ν Sociale Verzekeringsbank [1973] ECR 599 at paragraphs 6 and 7 and in Case C-227/89 Ronfeldt [1991] ECR I-323 at paragraph 22.
10 Judgment in Case 16/72 [1972] ECR 1141. at paragraph 12
11 Judgment in Case 75/76 [1977] ECR 495 at paragraphs 8 and 9.
12 Judgment in Case 21/87 Borowitz [1988] ECR 3715 at para graph 25
13 Judgment in Borowitz at paragraph 26. From that paragraph it also seems to me that the Member State concerned which, on the basis of the bilateral convention, and so of an obligation which it has accepted itself, is required to take account of third periods, is not required to do so on the basis of Regulation No 1408/71 any more than are the other Member States.
14 [1988] ECR at p. 3729.
15 Judgments in Case 87/76 Borione [1977] ECR 687 at paragraph 10; in Case 150/79 Commission ν Belgium [1980] ECR 2621 at paragraph 4; in Case 300/84 van Roosmalen [1986] ECR 3097 at paragraph 28; and in Joined Cases 82 and 103/86 laborero and Sabato [1987] ECR 3401 at paragraph 23. In other judgments too the Court shows that it interprets this definition broadly, particularly in the light of the objectives of Article 51 of the EEC Treaty: see the judgment in Case 109/76 Blottner [1977] ECR 1141 at para graph 9 et seq.
16 It was precisely because of that Law that the Commission subsequently brought before the Court an action against Belgium for failure to fulfil its obligations see the judgment in Commission ν Belgium, previously cited
17 Previously cited in footnote 8.
18 Cf the Court's reformulation of the question in paragraph 21 of the judgment.
19 Judgment in Ronfeldt, paragraph 28.
20 Judgment in Rönfeldt, paragraph 27.
21 Judgment in Case 36/74 Walrave 1974 ECR 1405 at paragraph 28
22 Judgments i n van Roosmale n at paragraph 30, i n Laborero and Sabato at paragraph 25, and in Case C-105/89 Buhari Haji 1990 ECR I-4211 at paragraph 15
23 Judgment i n laborero and Sabat o at paragraph 26
24 Judgment in Labore ro and Sabato at paragraph 27
25 In this respect I am disregarding the fact-which incidentally has not been raised by any of those who have submitted observations to the Court-that Ms Grana-Novoa worked in Switzerland and subsequently settled in Germany before Spain's accession to the Communities. Consequently, as the court of reference correctly observes, her situation is governed by Article 94 of Regulation No 1408/71: Ms Grana-Novoa can acquire rights under the regulation only as from 1 January 1986 (Article 94(1)), but in this case account must be taken also, with retroactive effect, of insurance periods completed or of contingencies which materialized prior to that date (Article 94(2) and (3).
26 Cf. the judgment in Case 106/77 Simmenthal [1978] ECR 629 at paragraph 17.