Brussels, 11/02/2013 (Agence Europe) - European Court of Justice Advocate General Paolo Mengozzi said in a preliminary ruling issued on Thursday 7 February 2013 in Case C-20.12 that Luxembourg is justified in making funding of higher education studies for children of frontier workers conditional upon a residence requirement. He suggests that the Court of Justice indicate to the referring court the criteria for verifying that such a condition is appropriate and proportional to the objective of ensuring the transition of Luxembourg's economy towards a knowledge-based economy.
The Court of Justice was asked by the Administrative Court of Luxembourg to interpret a case brought by several students, who are children of frontier workers in Luxembourg, following a refusal by the Luxembourg authorities to grant them financial aid for their higher education studies on the grounds that they were not resident in Luxembourg. They challenged that refusal, arguing that the Luxembourg legislation treats the children of Luxembourg workers differently from those of frontier workers, which is contrary to the principle of free movement of persons. Luxembourg disputes that there is any discrimination and, in any event, asserts that the financial aid in question does not constitute a social benefit. The Luxembourg court asked the European Court of Justice whether the different treatment accorded to residents and non-residents is justified by the education and budget arguments put forward by the Luxembourg government, namely, the need to increase the number of graduates in the country in order to help the country's transition to a knowledge-based economy; and the unreasonable cost for the country's budget of paying for the education of students in other countries of the world.
The request for a preliminary ruling of the Administrative Court of Luxembourg, which seeks guidance from the Court of Justice, stems from the idea that, pursuant to Article 203 of the Luxembourg Civil Code, the students in question must be considered to be the financial responsibility of their frontier worker parents. Advocate General Paolo Mengozzi rules out being able to give an opinion with that approach as a starting point because, pursuant to the principles of international private law, those students may be considered to be the responsibility of the frontier worker only where that is the case under the personal law applicable to them, which may be the law of their country of nationality, domicile or residence, but not Luxembourg law.
Mengozzi points out that, under European Court of Justice case law, financial aid for higher education for the children of cross-border workers is a “social benefit” and the students are entitled to call for non-discrimination under EU Regulation 1612/68 on the free circulation of workers; the residence requirement acts to the detriment of workers from other member states (and their children) and is indirect discrimination unless it guarantees the achievement of the government aims set out above and is proportionate to said aims.
Mengozzi says that by trying to ensure a high level of education to help the country move to a knowledge-based economy, Luxembourg is pursuing a legitimate objective that can be viewed as being of general interest because, following the end of the traditional coal and steel industries, the economy has moved towards banking, which is now threatened by EU measures to reduce its privileged position vis-a-vis banks in other member states. The budget objective, however, is not in itself a justification for unfair treatment of workers from Luxembourg and workers from other member states (or their families) although the receipt of a social benefit inevitably lays a financial burden on the state. The judge therefore suggests that the Luxembourg court itself check whether the economic aim of transition to a knowledge-based economy is genuinely implemented in the rejection of the students' case by preventing the cost of education being so high as to make it impossible to achieve the knowledge-economy objective.
The Court of Justice says that a member state may take measures to facilitate access to higher education for its own population to get them to work in Luxembourg itself, so the residence criterion is proportionate and appropriate for ensuring the objective. National legislation must determine: - that there is a reasonable likelihood that the students whose education is paid for and who are resident in Luxembourg are prepared to return to Luxembourg to get a job after their studies; - and whether the objective of transitioning to a knowledge-based society and a service economy more generally has actually been pursued by state measures to ensure new job prospects. The Advocate General suggests that it is necessary to verify whether the ultimate economic aim pursued - the transition towards a knowledge-based economy - for which Luxembourg established the discriminatory practice at issue is seriously and effectively implemented in order to avoid the costs of that practice from being so large as to make the achievement of that very aim impossible. It is for the national court to carry out that verification. (FG/transl.fl)