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Bressol- Case C-73/08

August 4th, 2011 | Posted by DUCA LL.M in EU Law - (0 Comments)

Ruling of [of the Grand Chamber] in Case C-73/08, Nicolas Bressol and Others and Céline Chaverot and Others v Gouvernment de la Communauté française [2010], ECR I-0000

 

Referred by [Cour constitutionnelle -Belgium]

 

FACTS:

 

The Belgian rules imposed a residence condition for non- resident students in order for them to enroll for the first time with higher education in Belgium – a student had to prove that his principal residence is in Belgium and that he or she complied with one more requirement from a list of eight conditions linked to the residence criteria or the right to remain on the Belgian territory.

The French Community of Belgium took this measure given the increasing number of students from other Member States, in particular France, that enroll in its institutions of higher education, in particular in nine medical or paramedical courses[1]. The applicants in the main proceedings, which were students and university lecturers, sought its annulment, on grounds of nationality discrimination. They submitted that while resident students enjoy free access to the courses referred to in the Decree, access by non-resident students to those courses is restricted in such a way that the number of students enrolled in those courses may not exceed the 30% threshold.

 

ISSUES/QUESTIONS:

 

Interpretation of EU law provisions in the field of free movement of students (Articles 165 and 150 TFEU, governed by the principle of non-discrimination on grounds of nationality (Article 18 TFEU and by the rights arising from the EU citizenship (Article 21 TFEU)in relation to the Belgian rules/The referring court asked whether the Belgian rules , are compatible with the provisions enshrined in the Treaty.

 

ANSWER of the COURT:

 

The answer provided by the European Court of Justice was in the negative. The Court stated that the Treaty provisions, namely Articles 18 and 21 TFEU , which provide that any discrimination on grounds of nationality shall be prohibited and respectively that every European Union citizen shall have the right to move and reside freely within the territory of the Member States, under the derogations laid down in the Treaties or in secondary legislation, preclude the contested national legislation, unless the referring court, will find, after assessing all the relevant evidence presented by the competent authorities, that that legislation is justified by the overriding reason, respectively, the protection of public health objective.

 

REASONING of the Court

 

First, the European Court of Justice finds that the legislation in question creates a difference in treatment between resident and non-resident students. Such a difference in treatment constitutes indirect discrimination on the ground of nationality which is prohibited, unless it is objectively justified

The Court assessed also the Member States competence in education matters and asserted that Member States have a wide discretion in the field, under the limits imposed by EU law, in particular as regards the provisions on the freedom to reside within the territory of the Member States. That means that national rules must comply with EU law, in particular with the principle of non-discrimination on grounds of nationality.

As regards the applicable rules to the case in the main proceedings, these were the Treaty provisions of prohibition on grounds of nationality and of citizenship; Articles 18 (1) TFEU and 21 TFEU. In respect to the nationality matter, the Court stated that when a situation falls within the scope rationae materiae of EU law, including the exercise of the freedom conferred by Article 21, to move and reside, one can rely on those provisions[2]. As the applicants are citizens of the European Union, Directive 2004/38[3] was also applicable, as it concerns all citizens regardless of their economic activity[4]. This Directive provides that EU citizens who do not have Belgian nationality may claim the right to ‘reside permanently in Belgium’ only within the limits laid down, namely after a continuous period of lawful residence in Belgium of five years. In the opposite case and if they cannot satisfy any of the seven other criteria, they will be classified as non-resident.

After the Court found the existence of unequal treatment, of the non-residents students, based on the residence criteria contained in the Decree, the Court went on and dealt with the justification matter.

Three different justifications ware invoked by the Belgian Government, along with the Austrian Government, namely           excessive burdens on the financing of higher education, protection of the homogeneity of the higher education system, public health requirements. The first one was not upheld by the Court, reasoning that the financing of education in the French Community was organised through a ‘closed envelope’ system in which the overall allocation did not vary depending on the total number of students[5]. The closed envelope system summarises economics and thermodynamics concepts, where the envelope method represents a popular method for visualizing and maintaining a budget and the closed system from thermodynamics, is a system that has no connection with the outside and  no mass may be transferred in or out of the system boundaries.  Used in the present Case, it is a metaphor for the Belgian Education Budget, regulated also by the contested Decree, that implies that a decrease in the number of students regardless of their nationality, does not entail any corresponding saving of money for the French Community. An increase or decrease in student numbers is budget-neutral.

On the other hand, the second objective invoked, was examined in the light of the third one, and the Court found that safeguarding the public health, for the purpose of protecting the homogeneity of the higher education system, could constitute a legitimate objective, capable of justifying a indirectly discriminatory  measure.

The proportionality assessment lead to the assertion that the national court has sole jurisdiction to determine whether the measure at issue is appropriate and does not go beyond what is necessary in order to attain the legitimate aim pursued.

First, it is for the national court to assess if there are genuine risks for the protection of the public health. That is why, it cannot be ruled out before that a reduction in the quality of training of future health professionals may ultimately impair the quality of care provided in the territory concerned. Moreover, it would be difficult to assert that a limitation of the total number of students in the courses concerned may reduce, proportionately, the number of graduates prepared in the future to ensure the availability of the service in the territory concerned, which could then have an effect on the level of public health protection.

Secondly, if the national court considers that there are true risks to the protection of public health that court must assess, in the light of the evidence provided by the national authorities, whether the legislation at issue in the main proceedings can be regarded as appropriate for attaining the objective of protecting public health. That means that the referring court must determine whether a limitation of the number of non-resident students can really bring about an increase in the number of graduates ready to ensure the future availability of public health services within the French Community[6].

Thirdly, it also for the national Court to assess whether the contested restriction is necessary or the legitimate aim pursued can be attained by less restrictive measures.

Moreover, the referring court must examine whether the competent authorities have reconciled, in an appropriate way, the attainment of that objective with the requirements of European Union law and, in particular, with the opportunity for students coming from other Member States to gain access to higher education, an opportunity which constitutes the very essence of the principle of freedom of movement for students[7]. The restrictions on access to such education, introduced by a Member State, must therefore be limited to what is necessary in order to obtain the objectives pursued and must allow sufficiently wide access by those students to higher education.

In that regard, it is for the national court to decide whether the selection process for non-resident students is limited to the drawing of lots and, if that is the case, whether that means of selection based not on the aptitude of the candidates concerned, but on chance, is necessary to attain the objectives pursued.

A last issue that arose before the Court in this case was the one request submitted by the Belgian Government, that if the Court would consider the national legislation at matter incompatible with EU law, then the temporal effect of the judgment delivered to be limited. Reasons behind this request ware linked to the possible serious economic repercussions tending to destabilise the French Community’s education budget. Other grounds indicated in support of its request were related to the fact that the Decree was conceived specifically to comply with the Court’s case-law and with Community legislation; the fact that the Commission has indicated that the system may be justifiable; and the lack of relevant case-law. The European Court of Justice considered that the Belgian Government did not bring enough evidence  to demonstrate the economic danger that might occur in case the judgment will not be temporally limited, and consequently, that request was dismissed. This remark was also contained in the Advocates’ General Opinion, which stated at point 149, that the Belgiums’ Government has not placed material before the Court, meant to demonstrate the serious economic repercussions.

Comments:

 

The matter of discrimination was dealt with extensively, whether the Belgian legislation constitutes direct or indirect discrimination. In this respect, AG Sharpston made reference to the 2007 Commissions’ letter of formal notice, which stated that it was direct discrimination. It must be noted that the Commissions’ position in the Case was on the opposite. On January 24, 2007, the EU Commission sent a letter of formal notice to Belgium, expressing concerns about the compatibility of the Decree with EU law. On May 24, 2007, Belgium replied to that letter, providing certain statistics and explanations. On November 28, 2007, considering that, without appropriate protective measures, the French Community of Belgium ran the risk of not being ‘able to maintain sufficient levels of territorial cover and quality in its public health system’, the Commission decided to suspend the procedure for five years ‘in order to allow the Belgian authorities to provide additional information in support of the argument that the restrictive measures imposed are both necessary and proportionate’[8]

In respect to the character of discrimination on grounds of nationality, whether direct or indirect, one can observe that there is no clear definition of the term “direct discrimination” in the EU case law and as a consequence, it must be deduced from the Court’s rulings on the basis of the principle of equal treatment and of indirect discrimination. Advocate General Sharpston emphasized that in order to avoid the 30% quota for non-resident students, one had to meet two cumulative conditions: principal residence in Belgium at the time of the registration with the higher institution of education and fulfillment of one of eight further conditions, listed in the Decree. It is worthnothy the second cumulative condition that provided the right to remain permanently in Belgium, which is automatically enjoyed by Belgian nationals[9]. This difference in treatment was based clearly on the nationality criterion (the right to remain permanently in Belgium) so that it was argued by the  Advocate General that this leads to direct discrimination on grounds of nationality. Further she noted that according to the Courts’ case-law, direct discrimination on grounds of nationality was never found to be justified, even if there were Cases that hinted at that theoretical possibility[10].

The Belgian Government was entirely reversed in its allegations by Advocate General Sharpston, who did not accept the legitimate aim of excessive burden on the public finance, sharing the reservations expressed by AG Jacobs in Case C‑147/03 Commission v Austria [2005] ECR I‑5969, as regards applying statements made by the Court in the context of burdens on national social security systems to the domain of higher education[11]. It was stated that a difference must be made between the national security systems and higher education, based on the fact that the latter does not fall within the meaning of Article 56 TFEU, providing free movement of services. In respect to second objective invoked, Advocate General Sharpston went on arguing that it is fairly unlikely to accept even the theoretical possibility that indirect discrimination measures to counter a real, serious and imminent threat to the quality of university education could in principle be capable of objective justification[12]. Moreover, it has not been proven that that less resident students would obtain diplomas for there to be, over a long period, a sufficient number of qualified medical staff to ensure the quality of the public health system[13].

Surprisingly or not, harmonization in the movement of students between Member States was presented as a solution, as she invited the EU legislator and the Member States to reflect upon the application of the principle of subsidiarity and proportionality, as enshrined by Protocol 30, part of the TFEU.

Finally, she added that Article 10 TEC, now Article 4 TEU, should provide relevant guidance, meaning that it “…is surely incumbent on both the host Member State and the home Member State actively to seek a negotiated solution that complies with the Treaty”[14].

The Advocates’ General Opinion contains a final remark that states “…however, the EU must not ignore the very real problems that may arise for Member States that host many students from other Member States”. Does this mean that the discrimination criteria should be accepted as legal in order to “prevent” the free movement and residence within EU, as enshrined by the Treaty?


[1] The courses concerned lead to the following degrees: Bachelor in physiotherapy and rehabilitation, Bachelor in veterinary medicine, Bachelor of midwifery, Bachelor of occupational therapy, Bachelor of speech therapy, Bachelor of podiatry-chiropody, Bachelor of physiotherapy, Bachelor of audiology and Educator specialised in psycho-educational counselling.

[2] Case C-73/08, Nicolas Bressol and Others and Céline Chaverot and Others v Gouvernement de la Communauté française,  [2010], ECR I-0000, para 31.               

[3] DIRECTIVE 2004/38/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 29 April 2004 on the right of citizens of the Union and their family members

to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC

[4] Directive 2004/38 is EEA relevant and was transposed in Icelandic law (Act on Foreigners No 96/2002, Act on Passports No 136/1998, Act on Administrative Procedures No 37/1993, Act on Legal Residence 21/1990, Act on the Right to Free Movement and Residence within EEA No 47/993, Regulation No 53/2003 on Foreigners and Regulation No 1212/2007 on Travel Across Borders). The Directive was implemented in EEA with few exceptions, via the Joint Committee Decision 158/2007- EU citizenship is not included in the Agreement, immigration policy is not part of the EEA agreement and EEA Agreement does not apply to third country nationals. Derogations are related to the fisheries and fish processing.

[5] Case C-73/08, Nicolas Bressol and Others and Céline Chaverot and Others v Gouvernement de la Communauté française,  [2010], ECR I-0000, para 50.

[6] Case C-73/08, Nicolas Bressol and Others and Céline Chaverot and Others v Gouvernement de la Communauté française,  [2010], ECR I-0000, para 67-71.

[7] Idem, para 79.

[8] At the same date, the Commission sent a letter of formal notice to Austria for non-compliance with the Court’s Judgment in Case C‑147/03 Commission v Austria [2005] ECR I‑5969. The same, the procedure was suspended.

[9] Opinion of Advocate General in Case C-73/08, Nicolas Bressol and Others and Céline Chaverot and Others v Gouvernement de la Communauté française,  [2010], ECR I-0000, point 65: “All Belgian nationals automatically enjoy the right to remain permanently in Belgium (the first of the eight possible criteria within the second cumulative condition of Article 1 of the Decree). No non-Belgians automatically have such a right. Therefore, they must either meet certain additional conditions to acquire such a right (namely those prescribed by Directive 2004/38) or fulfil one of the other criteria listed in that provision”.

[10] Case C‑360/00 Ricordi [2002] ECR I‑5089 paragraph 31, Case C‑323/95 Hayes [1997] ECR I‑1711, paragraph 24, Case C‑122/96 Saldanha and MTS [1997] ECR I‑5325, paragraph 26 et seq.

[11] Unequivocally, the Court ruled that a Member State must take all necessary measures in order to comply with the EU provisions of free movement of students, which is a fundamental right guaranteed by the Treaty. In case there are national rules that lead to unequal treatment, then those rules must be justified. The burden of proof,that is incumbent for the Member State, implies  an analysis of the appropriateness and proportionality of the restrictive measure adopted by that State and specific evidence substantiating its arguments. As the Austrain Government provided no such figures or evidence to sustain its allegations, the Court asserted that the Republic of Austria failed to fulfil its obligations under the Treaty provisions, related to nationality discrimination prohibition and free movement of students.

[12] Opinion of Advocate General in Case C-73/08, Nicolas Bressol and Others and Céline Chaverot and Others v Gouvernement de la Communauté française,  [2010], ECR I-0000, point 112.

[13] Opinion of Advocate General in Case C-73/08, Nicolas Bressol and Others and Céline Chaverot and Others v Gouvernement de la Communauté française,  [2010], ECR I-0000, point 126.

[14] Idem, paragraph 154.

An action against Norway was brought before the EFTA Court on 21 July 2011 by the EFTA Surveillance Authority, represented by Xavier Lewis, Florence Simonetti Gjermund Mathisen, acting as Agents of the EFTA Surveillance Authority, 35, Rue Belliard, B-1040 Brussels.The EFTA

Surveillance Authority requests the EFTA Court to declare that:

1. By maintaining in force such restrictions on the rights of persons and undertakings established in EEA States to own holdings and exercise voting rights in regulated markets in Norway as provided for in Sections 35(1), (2) and (3) and 36 of the Act of 29 June 2007 No 74 on Regulated Markets (the Stock Exchange Act) and Sections 5-3(1), (2) and (3) and 5-4 of the Act of 5 July 2002 on Registration of Financial Instruments (the Securities Depositories Act), the Kingdom of Norway has failed to fulfil its obligations arising from Articles 31 and 40 EEA.

2. The Kingdom of Norway bear the costs of the proceedings.

Legal and factual background and pleas in law adduced in support:

– Norwegian legislation restricts ownership of and voting rights in financial services infrastructure institutions. As a main rule the Stock Exchange Act prohibits the holding of more than 20% of the shares in stock exchanges, as well as the voting for more than 20% of the total voting capital or 30% of the votes represented at the general meeting. Corresponding rules with respect to securities depositories are laid down in the Securities Depositories Act.

– The EFTA Surveillance Authority submits that the contested legislation is incompatible both with the freedom of establishment under Article 31 EEA and with the freedom movement of capital under Article 40 EEA.

– The EFTA Surveillance Authority submits in particular that the contested legislation is unnecessary to promote the well-functioning and efficiency of the financial markets and to inspire confidence among market operators in the independence and impartiality of the
institutions. It argues that alternative, less restrictive measures are available that would be sufficiently effective.