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Language of document : ECLI:EU:C:2012:536

Conclusions17/07/2012 10:28:19.750C00752011IIENL_Cnc_Mess_De.xmlTRA-DT-DE-CONCL-C-0075-2011-201206331-01_00.xmlCNCRDLitige0DEFVORLÄUFIGE FASSUNG VOM 04.07.2012VORLÄUFIGE FASSUNG VOM 13.06.2012 - Entwurf1Zur Veröffentlichung bestimmt00-0Document20C:\TEMP\canevas\Litige.xml7/17/20120CNC§125;pos=33591:lng=EN§CONVERSION§rv@TRA-DOC-EN-CONCL-C-0075-2011-201206331-06_90Doc2XML SUIVI2 TRAD Prod 2003C:\Program Files\Doc2XML\XML\Serveur_SUIVI2_TRAD.xmlO:\Flux\Suivi_II\conversion\doc2xml_trad\In\UNCLASSIFIEDNormalIRECFalseFalse()Doc2XML_2003_PC_TRAD SV2_PUBC:\Program Files\Doc2XML\XML\PR_Doc2XML_2003_SV2_PUB.xmlP:\GTiWebTools\Automates\Suivi_II\conversion\doc2xml_pub\In\OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 6 September 2012 (2)

Case C‑75/11

European Commission

Republic of Austria

(Prohibition of discrimination on grounds of nationality — Freedom of movement of EU citizens — Freedom to provide services — Transport sector — Directive 2004/38/EC — Right of EU citizens and their family members to move and reside freely within the territory of the Member States — Exclusion of students whose parents do not receive family assistance under national law from reduced fares on local public transport services)

I – Introduction

1. Can the Member States link price reductions for students to conditions which are generally not fulfilled by students from other Member States? This is the question that must be answered in the present case.

2. Various Austrian regions and the competent federal ministry have agreed fare reductions for students with local transport undertakings. They are granted only to students whose parents receive family assistance in respect of their studies. Only parents who live in Austria receive this assistance.

3. The Commission considers that condition for the grant of fare reductions to be discrimination which is incompatible with Articles 18, 20 and 21 TFEU and Article 24 of Directive 2004/38/EC (3) on freedom of movement and right of residence. Students from other Member States who attend Austrian universities cannot normally fulfil that condition.

4. In its defence, Austria essentially argues that the reduction merely supplements the family assistance and that therefore the grant of that reduction complies with Regulation (EEC) No 1408/71 on the application of social security schemes. (4) It adds that students from other Member States receive assistance from their States of origin and cannot therefore be compared to national students. Finally, it argues, Article 24(2) of Directive 2004/38 allows students from other Member States to be excluded from aid for studies.

II – Legal framework

A – Directive 2004/38

5. Article 3(1) of Directive 2004/38 defines the scope of the directive:

‘This Directive shall apply to all Union citizens who move to or reside in a Member State other than that of which they are a national …’

6. Under Article 7(1)(c) of Directive 2004/38, all Union citizens have ‘the right of residence on the territory of another Member State for a period of up to three months if they

…

(c): – are enrolled at a private or public establishment, accredited or financed by the host Member State on the basis of its legislation or administrative practice, for the principal purpose of following a course of study, including vocational training; and

– have comprehensive sickness insurance cover in the host Member State and assure the relevant national authority, by means of a declaration or by such equivalent means as they may choose, that they have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence …’.

7. Article 24 of Directive 2004/38 provides for equal treatment of Union citizens who reside in other Member States:

‘(1) Subject to such specific provisions as are expressly provided for in the Treaty and secondary law, all Union citizens residing on the basis of this Directive in the territory of the host Member State shall enjoy equal treatment with the nationals of that Member State within the scope of the Treaty. …

(2) By way of derogation from paragraph 1, the host Member State shall not be obliged to confer entitlement to social assistance during the first three months of residence or, where appropriate, the longer period provided for in Article 14(4)(b), nor shall it be obliged, prior to acquisition of the right of permanent residence, to grant maintenance aid for studies, including vocational training, consisting in student grants or student loans to persons other than workers, self-employed persons, persons who retain such status and members of their families.’

B – Regulation No 1408/71

8. According to Article 4(1)(h) of Regulation No 1408/71, that Regulation applies to family benefits.

9. Family benefits are defined in Article 1(u)(i) as follows:

‘all benefits in kind or in cash intended to meet family expenses under the legislation provided for in Article 4(1)(h), …’.

10. The first sentence of Article 13(1) of Regulation No 1408/71 provides that persons to whom the regulation applies are to be subject to the legislation of a single Member State only.

11. Article 73 of Regulation No 1408/71 regulates the entitlement to benefits of family members residing in other Member States:

‘An employed or self-employed person subject to the legislation of a Member State shall be entitled, in respect of the members of his family who are residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State, subject to the provisions of Annex VI.’

12. Annex VI to Regulation No 1408/71 contains no provision of relevance to the present case.

III – Facts, pre-litigation procedure and forms of order sought

13. The treaty infringement proceedings concern fare reductions for students based on agreements under private law concluded between the competent Austrian federal ministry and the regional authorities (Austrian Länder or municipalities) and the transport undertakings concerned. Those agreements result in different fares with different reductions for students, depending on the Land.

14. In so far as the competent federal ministry participates in the conclusion of such an agreement, it seeks to link fare reductions to the receipt of Austrian family assistance under the Familienlastenausgleichsgesetz (Family Allowance Act) of 1967. That benefit does not go directly to the students, but to the parents responsible for their care and upkeep where they are covered by the Austrian social security system. The Republic of Austria states that provision has been made for this linkage of fare reductions to receipt of family assistance in the Länder of Vienna, Upper Austria, Burgenland and Styria and in the city of Innsbruck.

15. The Commission regarded this as an inadmissible discrimination against students from other Member States and, in 2009, asked Austria to submit observations under Article 258 TFEU. On 28 January 2010, it continued the proceedings by delivering a reasoned opinion, in which it set a deadline of two months for the termination of the alleged infringement.

16. As Austria’s response did not satisfy the Commission, it brought the present action on 21 February 2011.

17. The Commission claims that the Court should:

–: declare that the Republic of Austria has failed to fulfil its obligations under Article 18 TFEU in conjunction with Articles 20 and 21 TFEU and Article 24 of Directive 2004/38 by granting reduced fares on means of public transport in principle only to students in respect of whom Austrian family assistance is granted;

–: order the Republic of Austria to pay the costs.

18. The Republic of Austria contends that the Court should:

–: dismiss the action;

–: order the Commission to pay the costs.

19. The parties have presented their observations in writing.

IV – Legal assessment

20. The subject-matter of the action (see (a) below) and the prohibitions on discrimination applicable (see (b) below) must be specified before it can be examined whether there has been any discrimination (see (c) below).

A – Subject-matter of the action

21. In its application, the Commission complains in general that Austria grants reduced fares on means of public transport in principle only to students in respect of whom Austrian family assistance is granted.

22. However, it is apparent from the grounds for the action that only the Länder of Vienna, Upper Austria, Burgenland and Styria and the city of Innsbruck are involved. In Lower Austria, the situation is unclear (that is to say, not sufficiently clarified) and in the other regions, there are no fare reductions linked to family assistance.

23. Although Austria contends that the reduction has, in the meantime, no longer been linked to such a condition in Innsbruck either, the reduction complained of was still in force at the material time, when the deadline set in the reasoned opinion expired.

24. Moreover, the Commission does not complain that students from third States or other Austrian students are refused the fare reduction. It is concerned only with the position of students whose parents do not receive Austrian family assistance because they live in another Member State.

25. Consequently, the subject-matter of the proceedings is merely that student EU citizens whose parents do not receive Austrian family assistance because they live in another Member State are not granted the same fare reductions in the Länder of Vienna, Upper Austria, Burgenland and Styria and in the city of Innsbruck as students in respect of whom Austrian family assistance is granted.

B – Applicable prohibitions on discrimination

26. It must first be determined whether the prohibitions on discrimination relied on by the Commission are actually applicable.

27. In support of its action, the Commission relies on the general prohibition on discrimination laid down by Article 18 TFEU in conjunction with the right of freedom of movement of Union citizens under Articles 20 and 21 TFEU and Article 24 of Directive 2004/38 on freedom of movement and residence.

28. The applicability of the general prohibition on discrimination laid down by Article 18 TFEU presupposes that students from other Member States who use public transport services in Austria fall within the scope of EU law through the exercise of their right to freedom of movement as EU citizens under Article 21 TFEU.

29. However, application of the prohibition on discrimination, in conjunction with the general right to freedom of movement of EU citizens, to the selective reduction of fares might be precluded by the fact that the Austrian measure relates to the use of transport services. In fact, it is doubtful whether the general right to freedom of movement of Union citizens can be applied at the same time as the freedom to provide services (see 1 below). Moreover, the special provisions of the treaty title on transport apply to transport-related measures. It must therefore be examined whether application of the general right to freedom of movement would result in the circumvention of those special provisions (see 2 below). Finally, the relationship between the general prohibition on discrimination and Article 24 of Directive 2004/38 must be briefly outlined (see 3 below).

1. Freedom to provide services

30. In some earlier cases, the Court decided, without giving further reasons, that certain measures infringed both a specific fundamental freedom and the general prohibition on discrimination. (5) Since then, however, the Court has rightly clarified this case-law to the effect that Article 18 TFEU, which contains a general prohibition on discrimination on nationality grounds, may be applied as an independent basis only to situations regulated by EU law in respect of which the Treaty does not provide for any specific prohibitions on discrimination. (6) Where the freedom to provide services is applicable, Article 18 TFEU cannot therefore be applied. (7)

31. This must also apply in principle where the general prohibition on discrimination on nationality grounds is relied on in conjunction with the general right to freedom of movement of Union citizens under Article 21 TFEU. Although the Court’s pronouncements on the relationship between that freedom of movement and more specific fundamental freedoms are somewhat more cautious, as it normally finds that it does not need to decide on the interpretation of Article 21 TFEU, (8) they also express the idea of the special nature of specific fundamental freedoms.

32. The same can be inferred from the case-law on the relationship between the free movement of capital and the other fundamental freedoms. The Court has decided in that area that it does not have to rule on the free movement of capital where it has already found that a measure infringes the freedom of movement of workers, the right of establishment and the freedom of movement of Union citizens. (9) In those cases, the general freedom of movement had to be applied in addition to the two other aforementioned fundamental freedoms, as persons were also covered who did not move to the State concerned in order to pursue an economic activity. (10) However, the idea of the special nature of specific fundamental freedoms was not thereby abandoned. The demarcation between the free movement of capital and the other freedoms is based on the subject-matter of the measure of the Member State in question. (11) When the Court refrained from examining the free movement of capital but applied the freedom of movement of Union citizens, freedom of movement was, accordingly, more significantly affected than investment of capital.

33. Consequently, the general prohibition laid down in Article 18 TFEU cannot be applied in conjunction with the general freedom of movement laid down in Article 21 TFEU if the fare reduction on local public transport services falls within the scope of the freedom to provide services.

34. It must therefore be examined whether the freedom to provide services under Article 56 TFEU is applicable. According to settled case-law, Article 56 TFEU confers rights not only on the service provider, but also on the recipient of those services. (12) Union citizens who move to other Member States must not be the subject of discrimination on nationality grounds in respect of the price of services. (13)

35. However, the freedom to provide services does not apply to nationals of a Member State who go to the territory of another Member State and establish their principal residence there in order to provide or receive services there for an indefinite period. (14) The Court relied on the argument that Article 56 TFEU cannot be applied to activities which are confined in all respects within a single Member State. (15)

36. Students normally move to another Member State for some time. However, the period of the stay for study purposes is not indefinite but limited to the expected duration of the studies and is even more limited in the case of exchange programmes. The question is whether the period spent abroad is sufficient for the purposes of exercising the freedom to provide or receive services.

37. In the present case, however, a distinction is made depending on whether the students’ parents receive Austrian family assistance, which amounts to a distinction between whether they are living in their own country or abroad. The rules which may constitute indirect discrimination therefore involve an extraterritorial aspect. In this respect, the present case is comparable to the cases on the taking into account of the costs of a Masters degree course (16) or of school fees (17) in the country of origin, in which the freedom to provide services was applied.

38. The freedom to provide and receive services is therefore applicable in principle in this case and examination of the general prohibition on discrimination in conjunction with the freedom of movement of EU citizens is precluded.

2. Transport policy

39. However, the present case concerns access to transport services. Article 58(1) TFEU provides that the freedom to provide services in the field of transport is to be governed by the provisions of the title relating to transport. According to settled case-law, this means that the freedom to provide services is not applicable. (18) Its governing principles must be achieved by introducing a common transport policy. (19)

40. According to settled case-law, all forms of transport are nevertheless subject to the general treaty rules (20) and, in particular, fundamental freedoms other than the freedom to provide services. (21) Therefore, the general prohibition on discrimination must also apply in conjunction with the freedom of movement of Union citizens.

41. This is not inconsistent with the considerations regarding the special nature of the freedom to provide services. The special nature of that freedom can apply only in so far as the freedom to provide services applies. If it does not apply, it also cannot preclude the application of other provisions. This would amount to denying EU citizens the protection afforded to them in the transport sector, although no exception from this protection is provided for in the Treaty and the specific protection afforded by the freedom to provide services in principle is not applicable at all.

42. Nor does the Neukirchinger case preclude examination of the general prohibition on discrimination in conjunction with general freedom of movement, although the Court did not examine general freedom of movement in that case. Upon finding that a balloon flight falls within the scope of EU law, it did not take residence in another Member State as a relevant factor (in other words, the freedom of movement of the service provider), but focused on relevant transport policy measures. (22) However, this can be explained by the fact that residence in another Member State was of only minor importance in comparison with the provision of a transport service in that State. Provision and use of transport services are comparable only to a limited extent.

43. Freedom of movement of Union citizens can therefore trigger the application of EU law in the present case, although the Austrian measures in question concern access to transport services.

3. Article 24(1) of Directive 2004/38 on freedom of movement and residence

44. Finally, Article 24(1) of Directive 2004/38 does not preclude application of the general prohibition on discrimination under Article 18 TFEU in conjunction with the freedom of movement of EU citizens under Article 21 TFEU, but merely specifies its legal effects. (23) I have accordingly already accepted that the prohibitions on discrimination laid down in Article 18 TFEU and Article 24(1) of Directive 2004/38 can be applied cumulatively. (24)

C – Examination of discrimination

45. The Commission claims that linking the fare reduction to the receipt of Austrian family assistance indirectly discriminates against students from other Member States.

1. General prohibition on discrimination under Article 18 TFEU

46. As the Commission recognises, the Court has already stated in Bressol that students may rely on the right, enshrined in Articles 18 and 21 TFEU, to move and reside freely within the territory of a Member State without being subject to direct or indirect discrimination on ground of their nationality. (25)

47. In the Commission’s view, Austria indirectly discriminates against students from other Member States. Unless objectively justified and proportionate to the aim pursued, a measure of a Member State must be regarded as indirectly discriminatory if it is intrinsically liable to affect nationals of other Member States more than nationals of the host State and there is a consequent risk that it will place the former at a particular disadvantage. (26)

48. The parents of Austrian students normally receive Austrian family assistance, whereas the parents of foreign students do not. The latter are therefore the subject of indirect discrimination on grounds of nationality.

49. Austria contends, firstly, that the fare reduction is a family benefit within the meaning of Regulation No 1408/71 (see (a) below) and, secondly, that the situation of students coming from abroad is different from the situation of Austrian students (see (b) below). Thirdly, Article 24(2) of Directive 2004/38 on freedom of movement and residence allows the fare reduction to be linked to family assistance (see (c) below). These objections might justify the aforementioned discrimination.

a) Classification as a family benefit

50. The arguments put forward by the parties on the classification of the fare reduction as a family benefit relate both to Regulation No 1408/71 and to Regulation (EC) No 883/2004, which replaced it. (27)

51. It must be made clear in this regard that only Regulation No 1408/71 is relevant to this submission. According to Article 91(2) of Regulation No 883/2004, that regulation was not applicable until the entry into force of the implementing Regulation (EC) No 987/2009, (28) that is to say, from 1 May 2010. However, the material time for the examination of the action is the deadline which the Commission set in its reasoned opinion, namely 28 March 2010.

52. I understand the Austrian submission to mean that the rules on jurisdiction of Regulation No 1408/71 also determine which students are to receive the fare reduction. That regulation does, in fact, determine which law is to be applied in respect of the persons covered. Under the first sentence of Article 13(1), only the law of a Member State is normally applicable. Member States whose law is not applicable need not grant the benefits in question under the regulation. (29)

53. The fact that national legislation may be in conformity with Regulation No 1408/71 does not have the effect of removing that legislation from the scope of the provisions of the TFEU. (30) Whether the fare reduction is a family benefit within the meaning of Regulation No 1408/71 can therefore be, at most, indirectly relevant to the examination of the prohibitions on discrimination. In this respect, the relevant criterion may be the arguments for adopting family assistance.

54. The essence of the Austrian arguments is that the EU legislature, when apportioning responsibilities by means of Regulation No 1408/71, distributed the burden of family support evenly among the Member States. Therefore, Austria should not have to bear that burden in respect of students from other Member States. The fare reduction is one of the benefits relieving the burden on families, as the benefiting students are still supported by their parents. The fare reduction enables the parents to reduce that support. The reduction therefore supplements the actual family assistance, which likewise aims to help parents support students.

55. However, the fact that a benefit might indirectly relieve the burden on families cannot be sufficient to justify indirect discrimination on grounds of nationality. It must at least be ensured that that benefit reaches all families who are entitled to family benefits on the basis of the distribution of competences laid down in Regulation No 1408/71. This is not the case with the fare reduction.

56. It is not even apparent that the burden on all families who receive family assistance for students at Austrian universities is actually indirectly reduced by the fare reductions. Even if one assumes that reductions were agreed throughout Austria, it is doubtful whether all students are offered suitable connections on local transport services. Students who are reliant on other means of transport do not benefit from any relief. It is also not clear whether the burden on all the families concerned is relieved to a comparable extent by reductions.

57. Above all, the distinguishing criterion chosen discriminates, in practice, against students who exercise the freedom accorded by Union citizenship to study in other Member States. Under Article 73 of Regulation No 1408/71, a family benefit for which Austria is responsible should also be granted in principle to families supporting students who do not study in Austria. However, this is not the case with the fare reduction. Therefore, Austrian students studying abroad and their families are placed at a disadvantage compared with those who remain in their home country.

58. That a fare reduction linked to family benefits in order to relieve the burden on families under Regulation No 1408/71 cannot reach all families that are eligible in principle is also evident in the case of students from other Member States. They or their parents cannot, in practice, benefit from that relief if they pursue their studies in Austria, even if their home countries have also chosen that form of family benefit.

59. The linkage of the fare reduction to family assistance is therefore formal in nature. It cannot result in recognition of the reduction as a family benefit, which can be granted only within the framework of the competences laid down in Regulation No 1408/71.

60. Moreover, the discrimination against students whose parents do not receive Austrian family assistance because they live in another Member State is disproportionate to the relief accorded to families by such an ineffective benefit. For this reason, too, the indirect discrimination against those students is unjustifiable.

b) Comparability

61. Austria also considers that, in order to prove discrimination on grounds of nationality, the Commission must take into account study assistance and the tax treatment of children who study in other Member States. Certain Member States, it argues, accord substantially greater assistance than Austria, which the students can also claim in respect of studies in Austria. It cannot therefore be ruled out that students from other Member States are financially better able to cover the cost of living, including travel costs, in Austria than Austrian students.

62. In so far as that argument focuses on the need of students and their families, it cannot succeed. According to Austria, the fare reduction and the Austrian family assistance to which it is linked are not, in principle, dependent on need. Although family assistance is not granted where students have independent income above certain thresholds, the need of the family is not, however, examined in connection with the grant of family assistance and the fare reduction. (31)

63. If it were a matter of preventing students from abroad from receiving double benefit, the chosen criterion would, in any case, be inappropriate, since, in granting the reduction, Austria does not differentiate according to what benefits are received by students from other Member States.

64. Therefore, the linkage of the reduction to Austrian family assistance cannot be justified by the fact that students from other Member States may receive greater study assistance from their home country.

c) Article 24(2) of Directive 2004/38 on freedom of movement and residence

65. Finally, Austria relies on Article 24(2) of Directive 2004/38. According to that provision, equal treatment of students from other Member States in the host State does not confer entitlement, prior to acquisition of the right of permanent residence, to aid for studies consisting in student grants or student loans.

66. Austria argues that the fare reduction is aid for studies within the meaning of Article 24(2) of Directive 2004/38 because it is a benefit granted to students. The reduction must be classified as a student grant, as it does not have to be paid back.

67. It is correct that the legislature’s evaluations on which Article 24(2) of Directive 2004/38 is based may, irrespective of whether the requirements for application of Article 24(1) have been fulfilled, (32) also justify a difference in treatment for the purposes of Article 18 TFEU. (33)

68. The concept of aid for studies might also conceivably be broadly understood to include any benefit accorded to students. However, as the Commission rightly emphasises, when the legislature adopted Article 24(2) of Directive 2004/38, it decided to allow a derogation from the right to equal treatment under Article 24(1) only in respect of aid for studies consisting in students grants or student loans. This must also apply where Article 24(2) is relied on in connection with the application of Article 18 TFEU.

69. There is also no reason to interpret Article 24(2) of Directive 2004/38 broadly. On the contrary, that provision allows a restriction of the right to equal treatment laid down in Article 18 TFEU, Article 21(2) of the Charter of Fundamental Rights and Article 24(1) of Directive 2004/38. Any derogation must therefore be construed narrowly.

70. However, it would be overstretching the concept of ‘student grant’ to include fare reductions. The fact that Article 24(2) mentions it specifically in connection with student loans shows that the legislature did not intend it to cover all forms of benefit accorded to students, but benefits of a certain size which are designed to cover the costs associated with university education. It follows, moreover, from the case-law that support in respect of tuition fees is not to be regarded as aid for studies under Article 24(2) of Directive 2004/38, as the general prohibition on discrimination applies to the latter form of support irrespective of the previous period of residence. (34) The concept of student grants must therefore be interpreted narrowly and cannot cover fare reductions.

71. It should also be noted that access to the fare reduction under Austrian law is not dependent on whether the students concerned have acquired a permanent right of residence. It is therefore possible that students who are entitled to aid for studies are unable to benefit from the fare reduction.

d) Necessary integration into the host State

72. For the same of completeness, I would like to mention briefly a possible defence which Austria did not, however, submit and which the Court does not therefore need to examine.

73. The Court has recognised that the existence of a connection between the society of the Member State concerned and the recipient of a benefit can constitute an objective consideration of public interest which is capable of justifying the fact that the conditions for the grant of the benefit may affect the freedom of movement of the citizens of the Union. (35)

74. That criterion is based on the consideration that, although the Member States must, in the organisation and application of their social assistance systems, show a certain degree of financial solidarity with nationals of other Member States, it is permissible for a Member State to ensure that the grant of assistance to cover the maintenance costs of students from other Member States does not become an unreasonable burden which could have consequences for the overall level of assistance which may be granted by that State. (36)

75. Nevertheless, the fact remains that it is necessary for the condition of proportionality to be met. A measure is proportionate when, while appropriate for securing the attainment of the objective pursued, it does not go beyond what is necessary in order to attain it. (37) In particular, the conditions of residence and ordinary residence must be in proportion to the objectives pursued by the national rule in question. (38)

76. The degree of integration required cannot therefore be determined uniformly for all benefits, and a distinction must be made by reference to the scale of the benefits. Whereas it is proportionate to require five years’ residence for the issue of a student maintenance grant, (39) only lesser requirements may be imposed for the grant of a free motorway toll disc for disabled persons. The Court laid emphasis in this regard on the proportionality of a rule which restricts the issue of an annual toll disc free of charge to those disabled persons who are resident or ordinarily resident, without any minimum residence period being required, in the territory of the Member State concerned, thereby including also those persons who regularly travel to that State for professional or personal reasons. (40)

77. It must be concluded with regard to the present case that the integration attested by registration with an Austrian university must already be sufficient for students to be given the right to equal treatment in respect of the grant of fare reductions on local public transport services. This conclusion is also confirmed by the interpretation of Article 24(2) of Directive 2004/38 on freedom of movement and residence, according to which access to a fare reduction for students is not dependent on acquisition of permanent residence. (41)

78. The question whether students who visit a Member State only periodically, for example, as tourists or on an excursion, may be excluded from such fare reductions, need not be decided in the present case.

e) Interim conclusion

79. The linkage of the fare reduction to the grant of family assistance therefore infringes Article 18 TFEU.

2. Article 24 of Directive 2004/38 on freedom of movement and residence

80. The considerations relating to Article 18 TFEU also apply in principle to Article 24(1) of Directive 2004/38. Under that provision, subject to such specific provisions as are expressly provided for in the Treaty and secondary law, all Union citizens residing on the basis of the directive in the territory of the host Member State enjoy equal treatment with the nationals of that Member State within the scope of the Treaty.

81. Under Article 7(1)(c) of the directive, students have the right of residence if they have comprehensive sickness insurance cover and sufficient resources to support themselves. Where those requirements are fulfilled, students are resident in Austria on the basis of the directive and enjoy equal treatment with the nationals of that Member State under Article 24(1) thereof.

82. However, they are refused the fare reduction if their parents do not receive Austrian family assistance. As stated above, this constitutes indirect discrimination on grounds of nationality which is also not justified under Article 24(2) of Directive 2004/38.

83. Therefore, Article 24(1) of Directive 2004/38 has also been infringed.

V – Costs

84. Under Article 69(2) of the Rules of Procedure of the Court, the unsuccessful party is to pay the costs if they have been applied for in the successful party’s pleadings. Although the Commission has been largely successful in its pleadings, the form of order sought in its application was much more extensive in scope than those pleadings. Each party should therefore bear its own costs.

VI – Conclusion

85. I therefore propose that the Court:

(1): declare that the Republic of Austria has failed to fulfil its obligations under Article 18 TFEU in conjunction with Articles 20 and 21 TFEU by virtue of the fact that in the Länder of Vienna, Upper Austria, Burgenland and Styria or in the city of Innsbruck student Union citizens whose parents do not receive Austrian family assistance because they live in another Member State, do not receive the same fare reductions as students in respect of whom Austrian family assistance is granted;

(2): declare that the Republic of Austria has failed to fulfil its obligations under Article 24 of Directive 2004/38 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States by virtue of the fact that in the Länder of Vienna, Upper Austria, Burgenland and Styria or in the city of Innsbruck students who fulfil the requirements of Article 7(1)(c) of the directive and whose parents do not receive Austrian family assistance because they live in another Member State, in the Länder of Vienna, Upper Austria, Burgenland and Styria or in the city of Innsbruck do not receive the same fare reductions as students in respect of whom Austrian family assistance is granted;

(3): dismiss the action as to the remainder;

(4): order the Commission and the Republic of Austria to bear their own costs.

2 –: Original language: German.

3 –: Directive 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 (OJ 2004 L 158, p. 77).

4 –: Council Regulation of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (OJ English Special Edition 1971 (II), p. 416), as amended by Regulation (EC) No 592/2008 of the European Parliament and of the Council of 17 June 2008 (OJ 2008 L 177, p. 1).

5 –: See, on the freedom to provide services, Case C‑45/93 Commission v Spain [1994] ECR I‑911, paragraph 10, and Case C‑388/01 Commission v Italy [2003] ECR I‑721, paragraph 28, and otherwise, for example, Case 1/78 Kenny [1978] ECR 1489, paragraph 12, and Case 59/85 Reed [1986] ECR 1283, paragraph 29.

6 –: Case C‑1/93 Halliburton Services [1994] ECR I‑1137, paragraph 12; Joined Cases C‑397/98 and C‑410/98 Metallgesellschaft and Others [2001] ECR I‑1727, paragraph 38; Case C‑311/08 SGI [2010] ECR I‑487, paragraph 31; and Case C‑450/09 Schröder [2011] ECR I‑2497, paragraph 28.

7 –: Case 305/87 Commission v Greece [1989] ECR 1461, paragraph 13 et seq.; Case C‑311/97 Royal Bank of Scotland [1999] ECR I‑2651, paragraph 20; and Case C‑97/09 Schmelz [2010] ECR I‑10465, paragraph 44 et seq.

8 –: See Case C‑92/01 Stylianakis [2003] ECR I‑1291, paragraph 18 et seq.; Case C‑318/05 Commission v Germany [2007] ECR I‑6957, paragraph 35 et seq.; Case C‑56/09 Zanotti [2010] ECR I‑4517, paragraph 24 et seq.; and Case C‑137/09 Josemans [2010] ECR I‑13019, paragraph 53.

9 –: Case C‑345/05 Commission v Portugal [2006] ECR I‑10633, paragraph 45, and Case C‑104/06 Commission v Sweden [2007] ECR I‑671, paragraph 37. See, by contrast, however, Case C‑250/08 Commission v Belgium [2011] ECR I‑12341, paragraph 30, which assumes the special nature of free movement of capital in respect of EU citizens.

10 –: See Case C‑345/05 Commission v Portugal, paragraph 37, and Case C‑104/06 Commission v Sweden, paragraph 30, cited in footnote 8; Case C‑155/09 Commission v Greece [2011] ECR I‑65, paragraph 60; and Case C‑253/09 Commission v Hungary [2011] ECR I‑12391, paragraph 86.

11 –: Case C‑157/05 Holböck [2007] ECR I‑4051, paragraph 22; SGI, cited in footnote 5, paragraph 25; Case C‑132/10 Halley [2011] ECR I‑8353, paragraph 17; and, to this effect, Case C‑196/04 Cadbury Schweppes and Cadbury Schweppes Overseas [2006] ECR I‑7995, paragraphs 31 to 33; and Case C‑452/04 Fidium Finanz [2006] ECR I‑9521, paragraphs 34 and 44 to 49.

12 –: Joined Cases 286/82 and 26/83 Luisi and Carbone [1984] ECR 377, paragraph 10; Case 186/87 Cowan [1989] ECR 195, paragraph 15; Case C‑294/97 Eurowings Luftverkehr [1999] ECR I‑7447, paragraph 34; Zanotti, cited in footnote 7, paragraph 35; and Case C‑318/10 SIAT [2012] ECR, paragraph 19.

13 –: See, on charges for admission to places of interest, Commission v Spain and Commission v Italy, cited in footnote 4.

14 –: Case 196/87 Steymann [1988] ECR 6159, paragraph 17, and Case C‑70/95 Sodemare and Others [1997] ECR I‑3395, paragraph 38.

15 –: .Sodemare, cited in footnote 13.

16 –: .Zanotti, cited in footnote 7, paragraph 35.

17 –: .Commission v Germany, cited in footnote 7, paragraph 72.

18 –: Case C‑338/09 Yellow Cab Verkehrsbetrieb [2010] ECR I‑13927, paragraph 29, and Case C‑382/08 Neukirchinger [2011] ECR I‑139, paragraph 22.

19 –: Case 13/83 Parliament v Council [1985] ECR 1513, paragraph 62, and Yellow Cab Verkehrsbetrieb, cited in footnote 17, paragraph 30.

20 –: Case 167/73 Commission v France [1974] ECR 359, paragraph 32; Joined Cases 209/84 to 213/84 Asjes and Others [1986] ECR 1425, paragraph 45; and Neukirchinger, cited in footnote 17, paragraph 21.

21 –: See Commission v France, cited in footnote 19, paragraph 33, on freedom of movement for workers, and Yellow Cab Verkehrsbetrieb, cited in footnote 17, paragraph 33, on freedom of establishment.

22 –: .Neukirchinger, cited in footnote 17, paragraph 23 et seq.

23 –: See, by way of example, Case C‑430/10 Gaydarov [2011] ECR I‑11637.

24 –: See Opinion in Case C‑480/08 Teixeira [2010] ECR I‑1107, point 122 and footnote 101. See also Case C‑73/08 Bressol and Others [2010] ECR I‑2735, paragraph 34 et seq.

25 –: .Bressol, cited in footnote 23, paragraphs 30 to 33 and the case-law cited.

26 –: .Bressol, cited in footnote 23, paragraph 41, and the case-law cited.

27 –: Regulation of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ 2004 L 166, p. 1).

28 –: Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/2004 (OJ 2009 L 284, p. 1).

29 –: See, to this effect, Case C‑352/06 Bosman [2008] ECR I‑3827, paragraph 27, and Joined Cases C‑611/10 and C‑612/10 Hudzinski and Wawrzyniak[2012] ECR, paragraph 44.

30 –: See Case C‑211/08 Commission v Spain [2010] ECR I‑5267, paragraph 45, and Case C‑345/09 van Delft and Others [2010] ECR I‑9879, paragraph 85.

31 –: Paragraph 13 of the defence.

32 –: See point 80 et seq. below.

33 –: See Case C‑158/07 Förster [2008] ECR I‑8507, paragraph 55.

34 –: See Case 39/86 Lair [1988] ECR 3161, paragraph 16; Case 197/86 Brown [1988] ECR 3205, paragraph 18; and Case C‑357/89 Raulin [1992] ECR I‑1027, paragraph 27 et seq.

35 –: Case C‑224/98 D’Hoop [2002] ECR I‑6191, paragraph 38, and Case C‑103/08 Gottwald [2009] ECR I‑9117, paragraph 32.

36 –: Case C‑209/03 Bidar [2005] ECR I‑2119, paragraph 56, and Förster, cited in footnote 32, paragraph 48.

37 –: .Gottwald, cited in footnote 34, paragraph 33.

38 –: .Gottwald, cited in footnote 34, paragraph 38.

39 –: .Förster, cited in footnote 32, paragraph 60.

40 –: .Gottwald, cited in footnote 34, paragraphs 37 and 41.

41 –: See point 70 above.