1.Erasmus of Rotterdam was an early beneficiary of funding to study abroad. The thenbishop of Cambray, Henry of Bergen (for whom Erasmus had started to work as secretary),gave him both leave and a stipend in 1495 to go and study at the University of Paris.Erasmus never looked back; and, in a career that spanned Paris, Leuven, Cambridge andBasel, he became arguably the outstanding scholar of his generation: the ‘Prince of theHumanists’. It is tolerably safe to say that he put the funding for his university studies abroadto excellent use (2) – and, indeed, the current exchange programmes between EUuniversities bear his name.2.Modern day compatriots of Erasmus enjoy similar good fortune. Under the provisionsof the Wet Studiefinanciering (Law on the Financing of Studies – ‘the WSF’), they can oftenobtain funding for higher education pursued outside the Netherlands. However, do thedetailed rules governing the grant of such funding – in particular, the rule under which anapplicant must, in addition to being eligible for funding to study in the Netherlands, also haveresided lawfully in the Netherlands during at least three out of the last six years (the ‘threeout of six years rule’) – fall foul of Article 45 TFEU (formerly Article 39 EC) (3) and Article 7(2)of Regulation (EEC) No 1612/68 (4) inasmuch as they discriminate indirectly and withoutjustification against migrant workers and their dependent family members?

Legal background

Treaty provisions3.‘1.Article 45 TFEU states:Freedom of movement for workers shall be secured within the Union.

2.Such freedom of movement shall entail the abolition of any discrimination based onnationality between workers of the Member States as regards employment, remunerationand other conditions of work and employment.…’4.Pursuant to Article 165(1) TFEU (formerly Article 149(1) EC), Member States areresponsible ‘for the content of teaching and the organisation of education systems’. Article165(1) states that ‘[t]he Union shall contribute to the development of quality education byencouraging cooperation between Member States and, if necessary, by supporting andsupplementing their action’. Union action is also to be aimed at ‘encouraging mobility ofstudents’. (5)Regulation No 1612/685.Regulation No 1612/68 aimed to secure the freedom of nationals of one MemberState to work in another Member State and thereby implement the Treaty provisions onfreedom of movement for workers. The first recital in the preamble to that regulationdescribed its overall objective as being to achieve ‘the abolition of any discrimination basedon nationality between workers of the Member States as regards employment, remunerationand other conditions of work and employment, as well as the right of such workers to movefreely within the [Union] in order to pursue activities as employed persons subject to anylimitations justified on grounds of public policy, public security or public health’.6.The third and fourth recitals, respectively, stated that ‘freedom of movementconstitutes a fundamental right of workers and their families’ and that that right was to beenjoyed ‘by permanent, seasonal and frontier workers and by those who pursue theiractivities for the purpose of providing services’.7.According to the fifth recital, the exercise of this fundamental freedom, ‘by objectivestandards, in freedom and dignity, require[d] that equality of treatment shall be ensured infact and in law in respect of all matters relating to the actual pursuit of activities as employedpersons and to eligibility for housing, and also that obstacles to the mobility of workers shallbe eliminated, in particular as regards the worker’s right to be joined by his family and theconditions for the integration of that family into the host country’.8.Article 7(2) of Regulation No 1612/68 provided that a worker, who is a national of aMember State, in the territory of another Member State ‘shall enjoy the same social and taxadvantages as national workers’.9.Article 12 of Regulation No 1612/68 read:

‘1. Subject to such specific provisions as are expressly provided for in the Treaty andsecondary law, all Union citizens residing on the basis of this Directive in the territory of thehost Member State shall enjoy equal treatment with the nationals of that Member State withinthe scope of the Treaty. The benefit of this right shall be extended to family members whoare not nationals of a Member State and who have the right of residence or permanentresidence.2. By way of derogation from paragraph 1, the host Member State shall not 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 otherthan workers, self-employed persons, persons who retain such status and members of theirfamilies.’National law12.The WSF defines who can receive funding to study in the Netherlands and abroad.Funding to study abroad is called ‘meeneembare studie financiering’ (‘MNSF’), that is to say,‘portable’ funding for studies.13.For higher education in the Netherlands, funding for studies is available to studentswho are between 18 and 29 years old, study at a designated or approved educationalestablishment and satisfy a nationality condition. (7) Article 2(2) defines the nationalitycondition. Those eligible are: (i) Netherlands nationals, (ii) non-Netherlands nationals whoare treated, in the area of funding for studies, as Netherlands nationals based on a treaty ora decision of an international organisation and (iii) non-Netherlands nationals who live in theNetherlands and belong to a category of persons who are treated, in the area of funding forstudies, as Netherlands nationals on the basis of a general administrative measure.14.The second category includes EU citizens who are economically active in theNetherlands and their family members. They need not have resided in the Netherlands toqualify for this type of funding. Thus, cross-border workers and their family members arecovered. The third category includes EU citizens who are not economically active in theNetherlands. They qualify for funding after five years of lawful residence in the Netherlands.15.For funding for higher education pursued outside the Netherlands, students must beeligible for funding for higher education in the Netherlands and, pursuant to Article 2(14)(2)(c)

of the WSF, must additionally have resided lawfully in the Netherlands during at least threeout of the six years preceding enrolment at an educational establishment abroad. Thisrequirement applies irrespective of students’ nationality.16.As long as they satisfy the relevant conditions, students can apply sequentially forfunding to study in the Netherlands and then for MNSF to study abroad.17.Until 1 January 2014, the three out of six years rule does not apply to students,whatever their nationality, pursuing higher education in the ‘border areas’ of the Netherlands(Flanders and the Brussels-Capital Region in Belgium, and North-Rhine Westphalia, LowerSaxony and Bremen in Germany).18.MNSF consists of four components: (i) a basic grant, which is a fixed amount paid permonth and based on whether the student lives at home or independently, together with anallowance for travel costs and an additional allowance if the student has a partner or is asingle parent, (ii) an additional grant, based on the income and contribution of the student’sparents and subject to a maximum limit, (iii) a basic loan, if applied for, subject to a maximumlimit and (iv) a loan to cover fees, if applied for, limited in principle to the maximum feechargeable by Netherlands educational institutions for an equivalent course.19.The basic grant, the additional grant (except for the first year of studies) and theallowance for travel costs are given as loans. They become grants if the studies arecompleted within 10 years of their commencement.20.The maximum limit for MNSF funding, excluding allowances, ranges from EUR 739.15to EUR 929.69 per month, depending on whether the student lives at home or independently.The same limit applies to funding for studies in the Netherlands.

Procedure

21.Following a regular pre-litigation procedure, the Commission asks the Court to declarethat, by requiring that migrant workers, including cross-border workers, and their dependentfamily members fulfil a residence requirement (that is, the three out of six years rule) to beeligible under the WSF for the funding of educational studies abroad, the Kingdom of theNetherlands indirectly discriminates against migrant workers and has failed to fulfil itsobligations under Article 45 TFEU and Article 7(2) of Regulation No 1612/68, and to orderthe Kingdom of the Netherlands to pay the costs.22.The Netherlands Government contends that the Court should dismiss the applicationand order the Commission to pay the costs.23.The Governments of Belgium, Denmark, Germany and Sweden have intervened insupport of the Netherlands.24.The principal parties and all the interveners made oral submissions at the hearing on10 November 2011.

Assessment

Preliminary remarks

25.The Commission has throughout limited its claim to Article 45 TFEU and Article 7(2) ofRegulation No 1612/68. It argues that there is indirect discrimination against migrant workersworking in the Netherlands and their dependent family members with respect to MNSF. Itmakes no complaint under Article 24 of Directive 2004/38, Article 21 TFEU or any otherprovisions of EU law governing citizenship rights.26.Article 7(2) of Regulation No 1612/68 expresses the principle of equal treatment setout in Article 45 TFEU with regard to social and tax advantages and must be interpreted inthe same manner. (8) Thus, if a measure regulating access to a social advantage infringesArticle 7(2) because it treats migrant workers less favourably than national workers, it is alsoincompatible with Article 45 TFEU. However, even if a measure is compatible with Article7(2), it may still infringe Article 45. (9) I shall therefore first consider the residencerequirement in the light of Article 7(2) of Regulation No 1612/68. If it infringes Article 7(2), it isequally prohibited by Article 45 TFEU.27.The Netherlands, supported by the intervening Member States, submits that Article7(2) of Regulation No 1612/68 does not apply. In the alternative, the Netherlands argues thatthe residence requirement is not indirectly discriminatory against migrant workers.28.In any event, the Netherlands and the intervening Member States contend that theresidence requirement is justified for two reasons. First, the requirement serves to identifythe desired target group of students: namely, those who, without MNSF, would study in theNetherlands and, if they study abroad, will return to the Netherlands. Second, the residencerequirement prevents the scheme from becoming an unreasonable financial burden whichcould have consequences for the overall level of funding that is granted. That objective wasendorsed by the Court inBidarand confirmed inFörster.(10)Does the residence requirement infringe Article 7(2) of Regulation No 1612/68 in principle?The beneficiaries of equal treatment under Article 7(2) of Regulation No 1612/6829.The Netherlands contends that Article 7(2) of Regulation No 1612/68 does not applyin principle to dependent family members of migrant workers, irrespective of their place ofresidence. It accepts that an exception exists in cases of direct discrimination againstchildren of migrant workers. Generally, however, such persons are covered by Article 12 ofRegulation No 1612/68, not by Article 7(2). This is because Article 12 is a specific expressionof the equal treatment obligation as it applies to children and to access to generaleducational, apprenticeship and vocational training courses. Reading Article 7(2) as applyingto children of migrant workers risks rendering the residence requirement in Article 12meaningless.30.The Commission contends that the Court’s case-law confirms that Article 7(2) appliesto all dependent family members of the migrant workers.31.I agree with the Commission.

33.Dependent family members of a migrant worker are the indirect beneficiaries of theequal treatment obligation under Article 7(2) because discrimination against them withrespect to a social advantage also discriminates against the migrant worker who then has tosupport the family member. The Court has already made clear that this group of indirectbeneficiaries includes the workers’ dependent family members in the descending andascending line and spouses. (12) They are not required to reside in the Member State wherethe migrant worker is employed to enjoy protection under Article 7(2). (13)34.The term ‘social advantages’ in Article 7(2) includes funding for higher educationstudies pursued by migrant workers or their dependent family members. (14) In the presentcase, the dependent children of migrant workers working in the Netherlands may, inparticular, wish to apply for MNSF to study elsewhere than in the Netherlands.35.The Netherlands relies heavily on the fact that the cases in which the Court has heldthat Article 7(2) applies to children of migrant workers have all involved direct discrimination.Unlike the Netherlands, I see no logic in an interpretation which renders the personal scopeof an equal treatment obligation dependent on the type of discrimination involved. I thereforeconsider that it is of no consequence whether the alleged discrimination is direct or indirect.36.Article 12 of Regulation No 1612/68 gives a separate, distinct entitlement to childrenof migrant workers in their own right.37.Pursuant to that provision, the host Member State must allow children of migrantworkers access to its general educational, apprenticeship and vocational training courses.Article 12 applies also to children who pursue education outside the host Member State. (15)38.Article 12 specifically applies to ‘[t]he children of a national of a Member State who isor has been employed in the territory of another Member State’ and who ‘are residing in itsterritory’. The Court has held that Article 12 grants children who have established theirresidence in a Member State during their parent’s exercise of the right of residence as amigrant worker in that Member State an independent right of residence in order to attendgeneral educational courses there. (16) The child enjoys that right whether or not the parentretains the status of migrant worker in the host Member State. (17)39.Furthermore, a child does not have to demonstrate dependence on the migrantworker to rely on Article 12. If the parent is no longer a migrant worker benefiting from equaltreatment under Article 7(2) or providing for the maintenance of the child, the child may nonethe less claim in his own right access to the types of social advantage defined in Article 12and under the same conditions as nationals, provided that the child resides in the hostMember State. (18)40.Unlike the Netherlands, I do not consider that because Article 12 expressly governs adefined, limited group of family members as direct beneficiaries, it necessarily follows thatthe personal scope of Article 7(2) should be read as excluding that group as indirectbeneficiaries. The Netherlands relies on a series of cases in support of its position. None ofthese cases resolves the issue as to whether Article 7(2) protects dependent family membersof a migrant worker seeking financial support for higher education.41.InBrown,the claimant was denied protection under Article 7(2) because he acquiredthe status of migrant worker exclusively as a result of being accepted to undertake studies inthe host Member State. (19) He could not seek protection under Article 12 (nor, on myreasoning, as an indirect beneficiary under Article 7(2)) because neither parent had the

status of migrant worker after his birth. (20)Lair andMatteucci,on the other hand, concernedthe application of Article 7(2) to claimants who were themselves migrant workers. (21)42.InCasagrande,the Court interpreted Article 12 in a dispute involving the child of amigrant worker residing where the parent was employed, and held that that provision alsocovered general measures intended to facilitate educational attendance. (22) Similarly,diLeo(23) concerned the application of Article 12 to the child of a migrant worker leaving thehost Member State to study abroad.43.I conclude that dependent family members, including children, benefit from themigrant worker’s right to equal treatment under Article 7(2) of Regulation No 1612/68. Thatconclusion applies irrespective of where they or the migrant worker reside and whether thealleged discrimination is direct or indirect.Does an objective difference exist between workers residing in the Netherlands and thoseresiding outside the Netherlands?44.The Commission claims that migrant workers (including cross-border workers)working in the Netherlands and their dependent family members are treated less favourablythan Netherlands workers and their dependent family members.45.The Netherlands argues that an objective difference exists between workers residingin the Netherlands and those residing outside the Netherlands because the latter do notrequire incentives to study abroad. That argument implies that migrant workers working inthe Netherlands and residing in another Member State are not in a comparable situation toNetherlands workers (and migrant workers, for that matter) working and residing in theNetherlands.46.I disagree with the Netherlands.

47.Discrimination under Article 7(2) exists when migrant workers are treated lessfavourably than national workers in a comparable situation. To decide whether that is thecase, it is necessary to determine who benefits from equal treatment and in connection withwhat particular benefit. In that regard, the object of the rules establishing the difference intreatment is relevant to assessing whether an objective difference exists between therelevant categories of people. (24) I add that, in my view, the alleged objective differencemust generally reflect a distinction made in law or in factotherthan that made by the verylegal rule that is at issue.48.In the present case, the benefit is the grant of funding for studies anywhere outsidethe Netherlands. In the context of Article 7(2), migrant workers in the Netherlands benefitfrom equal treatment.49.There is relatively little difficulty about accepting that the following two categoriescontain workers who may properly be compared with each other. First, migrant workersresiding and working in the Netherlands are clearly comparable to, and are to be treatedequally with, Netherlands nationals residing and working in the Netherlands. Second, migrantworkers working in the Netherlands but residing elsewhere are clearly comparable to, andare to be treated equally with, Netherlands nationals working in the Netherlands but residingelsewhere.

52.The Netherlands accepts (rightly) that children of migrant workers who wish to studyin the Netherlands should have access to funding for such studies on exactly the same termsas Netherlands nationals, irrespective of whether those migrant workers (and theirdependent children) reside in the Netherlands or elsewhere.53.In so doing, it has implicitly accepted that at least some children of migrant workersmay – like the children of Netherlands workers – be pre-disposed to study in the Netherlands(whetheror not they are residing there)and that they should have access to funding to do so.But the necessary corollary of that – it seems to me – is that the Netherlands can no longerlegitimately assert that the place of residence will, in a quasi-automatic manner, determinewhere the migrant worker or his dependent children will study. And, if that is right, then it isnot legitimate to use place of residence as an allegedly ‘objective’ criterion for differenttreatment. On the contrary: a migrant worker employed in the Netherlands but residing inanother Member State can properly be compared with a Netherlands worker residing andworking in the Netherlands.Does the residence requirement result in indirect discrimination?54.It is settled case-law that, in infringement proceedings, the Commission must provethe existence of the alleged infringement and provide the Court with the evidence necessaryfor it to establish that an obligation has not been fulfilled. In so doing, the Commission maynot rely on a presumption. (26)55.In this case, the Commission must demonstrate that migrant workers and Netherlandsworkers are treated differently with results similar to those that would follow from applying acondition of nationality.56.The Commission argues that the residence requirement infringes Article 7(2) ofRegulation No 1612/68 because national workers are always likely to satisfy it more easilythan migrant workers. It submits thatMeeusen(27) andMeints(28) establish that aresidence requirement is, by definition, indirectly discriminatory. In the present case, theresidence requirement is indirectly discriminatory in any event to the extent that it necessarilyexcludes cross-border workers and their dependent family members. The Netherlands reliesonSotgiuandKaba IIto argue that a residence requirement is not discriminatory in allcircumstances. (29)57.I share neither reading of the Court’s case-law.

that requirement was more easily met by national workers (and whether it could bejustified). (32) Neither judgment therefore establishes that a residence requirement is alwaysindirectly discriminatory.59.However, nor are the Court’s rulings inSotgiuandKaba IIauthority for the contraryposition, namely that it may be possible to impose a residence requirement on nationals andnon-nationals who are in a comparable situation without that resulting in indirectdiscrimination. InSotgiu,the workers concerned belonged to different categories based onwhether they were obliged to move. The Court therefore considered that residence formedan objective criterion for different treatment of workers in objectively different situations. InKaba II,the spouse of a migrant worker who was a national of a Member State other than theUnited Kingdom and the spouse of a person who was ‘present and settled’ in the UnitedKingdom were held not to be comparable due to a distinction made in a provision of nationallawotherthan that at issue. (33)60.I agree none the less with the Commission that the residence requirement indirectlydiscriminates against migrant workers.61.A requirement of past, present or future residence (especially if it stipulates residencefor a particular duration) is intrinsically likely to affect national workers of a Member Stateless than migrant workers who are in a comparable situation. That is because such aconditionalwaysdistinguishes between workers who do not need to move to satisfy it andworkers who do need to move. The former are usually, although possibly not invariably, morelikely to be nationals of the host Member State.62.The three out of six years rule pertains to past residence of a certain duration. Iconsider that Netherlands workers are more likely to be able to satisfy that condition thanmigrant workers residing in the Netherlands.63.It is conceivable that such a residence requirement may not discriminate againstevery cross-border worker. (34) Nevertheless, it is likely that a considerable number of cross-border workers and their dependent family members are excluded from MNSF because thefamily resides together in a border area and thus outside the Netherlands.64.I therefore conclude that the residence requirement constitutes indirect discriminationprohibited in principle by Article 7(2) of Regulation No 1612/68.Is the residence requirement none the less justified?65.If the residence requirement constitutes indirect discrimination prohibited by Article7(2) of Regulation No 1612/68, the Court must determine whether it is none the less justified.To that effect, the Netherlands must demonstrate that the residence requirement (i) pursuesa legitimate aim which is justified by overriding reasons of public interest, (ii) is appropriate toachieve the legitimate objective pursued (appropriateness) and (iii) does not go beyond whatis necessary to achieve the desired objective (proportionality). (35)66.The Netherlands argues that the residence requirement is justified because it isappropriate and does not go beyond what it necessary (i) to avert an unreasonable financialburden resulting from making MNSF available to all students (theeconomicobjective) and, atthe same time, (ii) to ensure that MNSF is available solely to students who, without it, wouldpursue higher education in the Netherlands, and who are likely to return there if they studyabroad (thesocialobjective).

67.Before turning to the justification of the residence requirement on the basis of eachobjective, I should like to comment on the principles governing the burden of proof and thestandard of proof. I do so because neither party in this case has applied those principlesproperly.68.The Court has held that the defendant Member State must provide ‘reasons whichmay be invoked by a Member State by way of justification’ and ‘an analysis of theappropriateness and proportionality of the restrictive measure adopted by that State andspecific evidence substantiating its arguments’. (36) It thus bears the onus of establishing aprima facie case that the measure is appropriate and does not go beyond what is necessaryto achieve its objective(s).69.However, the burden on the defendant Member State to demonstrate proportionality‘cannot be so extensive as to require the Member State to prove, positively, that no otherconceivable measure could enable that objective to be attained under the sameconditions’. (37) Put another way, the Member State cannot be required to prove a negative.70.If the defendant Member State establishes that the contested measure is prima facieproportionate, it is then for the Commission to rebut the Member State’s analysis bysuggesting other less restrictive measures. The Commission cannot merely propose analternative measure. It must also explain why and how that measure is appropriate toachieve the stated objective(s) and is, above all, less restrictive than the contested measure.Without such an explanation, the defendant Member State cannot know on what its rebuttalshould focus.Is the residence requirement justified on the basis of the economic objective?–Is the economic objective a legitimate aim which is justified by overriding reasons inthe public interest?

71.The Netherlands argues that the residence requirement is justified because it seeks toensure that MNSF does not impose an excessive financial burden on society. InBidarandFörster,the Court accepted that Member States may be legitimately concerned with thefinancial consequences of policies and therefore require a degree of integration beforemaking funding for studies available. (38) The Netherlands estimates that eliminating theresidence requirement would result in an additional financial burden of some EUR 175 millionper year spent on providing MNSF for, in particular, children of migrant workers andNetherlands nationals who either live outside the Netherlands or have lived less than threeout of the previous six years in the Netherlands.72.The Commission argues that the reasoning inBidarandFörsterdoes not apply tomigrant workers because EU law treats economically active EU citizens differently fromeconomically inactive EU citizens. Article 24(2) of Directive 2004/38 confirms that distinction.Even if the Netherlands were allowed to require a degree of connection, the status of migrantworker itself demonstrates a sufficiently close connection with the Netherlands; and the CourtinBidarrecognised that no residence requirement can be imposed in suchcircumstances. (39) Furthermore, mere concerns about budgetary implications cannot qualifyas overriding reasons relating to the general interest.73.I agree with the Commission.

74.The Court is being invited to apply the reasoning inBidarandFörsteras regardseconomically inactive EU citizens to migrant workers. But first: what precisely did the Courtrule inBidarandFörster?75.InBidar,the United Kingdom sought to justify a residence requirement of three yearsbased on the need to ensure that (i) contributions made through taxation were sufficient tojustify the grant of the funding and (ii) a genuine link existed between the student claimingthe funding and the employment market of the host Member State. (40) In essence, theconcern was that students from all over the European Union might arrive in the UnitedKingdom and forthwith apply for funding to study there.76.In response to the first part of the United Kingdom’s argument, the Court acceptedthat ‘it is permissible for a Member State to ensure that the grant of assistance to cover themaintenance costs of students from other Member States does not become an unreasonableburden which could have consequences for the overall level of assistance which may begranted by that State’. (41) As a result, it was legitimate to grant funding ‘only to studentswho have demonstrated a certain degree of integration into the society of that State’. (42)77.The Court did not accept the second part of the United Kingdom’s argument. AMember State was not entitled to make the grant of funding for studies dependent on a linkbetween the student and the employment market. In essence, the Court found that anindirectly discriminatory residence requirement could not be justified based on the need togrant funding only to students who had already worked in the host Member State or wouldwork there after their studies. Indeed, the Court found that education does not necessarilyassign a student to a particular geographical employment market. (43) Unlike theCommission, I do not read this part of the judgment inBidaras precluding any requirementthat migrant workers demonstrate a degree of connection to the host Member State. TheCourt simply did not address that point. What it did was to reject the argument that linking theplace of studies and the place of employment was an objective that could justify indirectdiscrimination.78.The Court went on to accept that past residence for a certain time in the host MemberState may establish the necessary degree of connection. (44) Limiting the group of recipientsthrough a criterion expressing a degree of closeness to the financing Member State, such aspast residence, was thus an appropriate measure to ensure that the grant of funding tostudents from other Member States did not become an unreasonable burden which couldhave consequences for the overall level of assistance which might be granted by that State.79.80.The Netherlands appears to read the judgment inFörsteras confirming that inBidar.I am not convinced by that reading ofFörster.

81.InFörster,the Court first noted that, according toBidar,it is legitimate for a MemberState to ensure that a social advantage does not become an unreasonable burden whichcould have consequences for the overall level of assistance. (45) That was, indeed, thelegitimate objective recognised inBidar.(46)82.Next, the Court stated that, also according toBidar,it is legitimate to grant assistanceto cover maintenance costs only to students demonstrating a certain degree of integrationinto the society of the Member State. (47) The Court referred to the passage inBidarwhere itheld that a student may be regarded as demonstrating a certain degree of integration in thehost Member State if the student has resided there for a certain period of time. (48)

83.The Court next applied that reasoning to the facts inFörster.The Court needed toresolve whether the indirectly discriminatory residence requirement of five years could ‘bejustified by the objective, for the host Member State, of ensuring that students who arenationals of other Member States have to a certain degree integrated into its society’. (49)The Court inFörstertherefore examined the proportionality of the residence requirement inrelation to theobjective of ensuring integration of the student,and not that of avoiding thecollapse of the existing scheme due to its financial cost. (50)84.However, the Court inBidarhad not recognised that objective. In that judgment,evidence of a degree of integration was treated as ameansto avert an unreasonablefinancial burden.85.It would be unfortunate if a superficial reading ofFörsterwere to lead to confusionbetween means and end. There is a risk thatFörstermight be read as indicating thatMember States can set a residence requirement, irrespective of whether its purpose is toensure that making available a social advantage does not adversely affect the stability of itspublic finances or the pursuit of any other legitimate objective justified by overriding reasonsof public interest. On that basis, Member States might seek to justify less favourabletreatment of (both economically active and inactive) EU citizens in terms of social policy(integration) by applying access criteria such as length of residence, marital and familystatus, language, diplomas, employment, and so forth,withoutever explainingwhytheavailability of a social benefit should be limited in that way.86.Against the background of that reading ofBidarandFörster,I turn to examine whetheraverting an unreasonable financial burden which could have consequences for the overalllevel of funding for studies is an objective that can be transposed from the context ofeconomically inactive EU citizens and invoked to justify indirect discrimination againstmigrant workers.87.I consider it cannot.

88.I accept that the financial burden of making a social advantage widely available maycompromise its existence and overall level. (51) In such circumstances, concerns aboutbudgetary implications are intrinsically linked with the existence and objective of the socialadvantage itself and cannot therefore be wholly disregarded. Member States might otherwiseforgo altogether providing particular forms of social advantage, to the detriment of the publicinterest.89.I am nevertheless of the view that the Netherlands cannot invoke budgetary concernsto justify discriminatory treatment of migrant workers and their dependent family members.Any conditions attached to MNSF in order to keep expenditure within acceptable limits mustbe borne equally by migrant workers and Netherlands workers.90.Migrant workers and their families enjoy the freedom to move to another MemberState based on the consideration that ‘mobility of labour within the [Union] must be one of themeans by which the worker is guaranteed the possibility of improving his living and workingconditions and promoting his social advancement, while helping to satisfy the requirementsof the economies of the Member States’. (52) Member States must therefore eliminate anyobstacles to the exercise of the freedom of movement and related rights of migrant workers,including those affecting ‘the worker’s right to be joined by his family and the conditions forthe integration of that family into the host country’. (53)

91.In my opinion, if Member States make a social advantage available to their ownworkers, irrespective of whether the benefit is tied to a person’s contributions or not, theymust grant it on equal terms to migrant workers. Any limitation imposed for preservingfinancial integrity must be applied on equal terms to national workers and migrantworkers. (54)92.It is true that the Court has accepted that the objective of averting an unreasonablefinancial burden which can have consequences for the overall level of social assistancegranted can justify discrimination against economically inactive EU citizens. In my opinion,the Court has done so because, as EU law stands, all EU citizens are not yet guaranteed fullequal treatment with regard to social advantages.93.Before the introduction of EU citizenship, several directives provided that nationals ofMember States who were not exercising an economic right to free movement had the right tomove to and reside in another Member State on condition that they and their family memberswere covered by sickness insurance and had ‘sufficient resources to avoid becoming aburden on the social assistance system of the host Member State during their period ofresidence’. (55) The condition was imposed because these nationals ‘must not become anunreasonable burden on the public finances of the host Member State’. (56) In particular,Directive 93/96 limited the right of students to reside in another Member State and did notestablish any right to payment of maintenance grants by the host Member State. (57)94.These nationals whatever their activity became EU citizens (58) following the entryinto force of the Maastricht Treaty. Based on that status, they have the right to move andreside freely within the territory of the Member States, subject to limitations laid down in EUlaw. The Court has held that the host Member State must show a certain degree of financialsolidarity to students who are nationals of other Member States and have exercised theirright to move to and reside in the host Member State. (59)95.Directive 2004/38 consolidated much of the earlier legislation and case-law. Itmaintains the distinction between EU citizens who have exercised an economic right of freemovement and other EU citizens and expressly preserves the right of Member States todiscriminate for a certain time against the latter. Thus, Article 24(2) of Directive 2004/38provides that, until students have acquired permanent residence in the Member State wherethey study, ‘[b]y way of derogation from’ the obligation to treat equally nationals and other EUcitizens, the host Member State cannot be obliged to grant them maintenance assistance forstudies, consisting out of grants or loans. Although the facts giving rise toBidarpreceded theadoption of Directive 2004/38, the reasoning in that case reflects Member States’ freedom todiscriminate in those circumstances. The derogation does not, however, apply to ‘workers,self-employed persons, persons who retain such status and members of their families’. Suchpersons are, on the contrary, protected by the general rule of equal treatment.96.I therefore conclude that theeconomicobjective cannot be regarded as a legitimateaim which is justified by overriding reasons in the public interest. It follows that, unless thesocialobjective can be upheld, the Netherlands’ defense must fail.97.However, in case the Court should disagree with my conclusions on the economicobjective, I shall briefly examine both the appropriateness of the residence requirement inrelation to that objective and its proportionality.–Is the residence requirement appropriate to achieve the economic objective?

98.The Netherlands argues that the residence requirement is an appropriate means toensure that MNSF does not lead to an excessive, unreasonable financial burden. TheNetherlands has submitted a study which it contends demonstrates that eliminating therequirement would result in an additional burden of some EUR 175 million per year.99.The Commission laconically indicates that it has ‘doubts’ about the Netherlands’position on the appropriateness of the measure.100. Even if the Commission makes no convincing effort to refute the Netherlands’ argumentand evidence, it is for the Netherlands to make a persuasive case that excluding studentswho have lived less than three out of six years in the Netherlands is correlated to theunreasonable financial burden it allegedly averts. That does not involve establishing that theresidence requirement is the most appropriate measure to achieve the stated objective. (60)101. I accept the Netherlands’ argument.102. The residence requirement necessarily excludes a group of potential claimants andhence limits the cost of MNSF. The Netherlands appears to take the view that the additionalburden of EUR 175 million per year would undermine the MNSF scheme as it presentlystands.103. I find no reason to question that position. After all, Member States remain free to decideat what point a particular level of funding for studies becomes an unreasonable financialburden with consequences for the overall level of assistance granted under the scheme. It isfor the Member State, and not the Court, to determine where that threshold lies.104. Since the Commission has made no effort to rebut the Netherlands’ position, I concludethat the Netherlands has established that the residence requirement is appropriate.–Is the residence requirement proportionate in relation to the economic objective?

105. The parties’ arguments on proportionality became clearer at the hearing held at theCourt’s initiative.106. The parties disagree in essence about whether it is proportionate to require migrantworkers, who are already connected to the Netherlands through their employment there, alsoto comply with the three out of six years rule.107. The Commission contends that the status of migrant worker is sufficient by itself todemonstrate the required degree of connection and that the Netherlands cannot impose anadditional residence requirement. It suggests coordination with other Member States as analternative measure. The Netherlands argues that the status of migrant worker is insufficientand that no alternative measures are available. When deciding to impose the residencerequirement, it also took into account that alternative sources of funding and types offinancial support may be available, that other Member States make funding similar to MNSFconditional on past residence and that the residence requirement prevents certain risks offraud.108. I am not convinced that the residence requirement is proportionate.

109. Unlike the Netherlands, I find that the fact that the Court accepted a residencerequirement of five years as proportionate inFörsterdoes not mean that the three out of sixyears rule is proportionate here. InFörster,the Court relied on the text of Articles 16(1) and24(2) of Directive 2004/38 to rule that a Member State was not required to grantmaintenance assistance for studies to economically inactive EU citizens who had not residedlegally in that Member State for a continuous period of five years. (61) Unlike the AdvocateGeneral, (62) the Court appeared not to be inclined to question the thesis that the requireddegree of connection could not be demonstrated through other means.110. However, Article 24(2) makes clear that the five years’ residence condition in Directive2004/38 cannot be imposed on migrant workers and their dependent families.111. Can a Member State nevertheless impose a requirement of three out of six yearsresidence on such persons?112. I consider it cannot.113. Unlike the Netherlands, I do not readBidaras endorsing such a residence requirement.In that case, the Court did not need to examine proportionality because the effect of theresidence requirement coupled with the rules on obtaining ‘settled status’ in the UnitedKingdom was that, whatever his actual degree of integration, Mr Bidar could never qualify forassistance to cover his maintenance costs.114. The difficulty in assessing the proportionality of the residence requirement in this case isthat the parties’ arguments are based on the understanding that the Netherlands can requirea certain degree of connection without taking into account that that is a means to an end.115. On my reading ofBidar,examining the proportionality of the residence requirementinvolves deciding whether the Netherlands has established that the three out of six years ruledoes not go beyond what is necessary to avoid an unreasonable financial burden.116. The Netherlands has indeed submitted evidence to that effect.117. The figure of EUR 175 million per year is based on a risk analysis that calculates theestimated additional cost of funding, in particular, children of migrant workers (group 1) andNetherlands nationals (group 2) who are currently excluded from MNSF. (63) Eliminating theresidence requirement for children in group 2 would, it is said, result in an additional cost ofEUR 132.1 million, which is almost three times as high as the cost of EUR 44.5 millionresulting from eliminating the requirement for children in group 1.118. These estimates are based on a range of assumptions that appear, at best,questionable. For example, in calculating the number of children in group 1 residing outsidethe Netherlands, the authors of the study estimate that between 15% and 30% of EasternEuropean migrant workers in the Netherlands continue to reside with their families in theirhome Member State. These workers are therefore assumed to commute either on a daily ora less regular basis from, for example, Warsaw to the Netherlands. At the same time, the factthat these commuting migrant workers may spend more days a week in the Netherlands thanin the home Member State is not taken into account in determining whether they are residentin the Netherlands. Another example is that the authors of the study assume that children ofcross-border workers will study in the border area where they reside. They therefore do notappear to apply a correction for the children of migrant workers and Netherlands nationals

residing abroad, whether or not in a border area, who are entitled to obtain MNSF to study ina border area.119. Leaving aside these concerns about the methodology applied, children in groups 1 and2 qualify for funding to study in the Netherlands despite the fact that they do not reside there.The Netherlands has voluntarily assumed the burden of financing such students up to certainmaximum limits. Thesame limitsapply to funding to study in the Netherlands and abroad.The Netherlands has not explained why the same financial burden is acceptable whenassumed in connection with studies in the Netherlands, but unreasonable in the context ofMNSF. (64)120. If the Court should decide that the Netherlands can require a certain degree ofconnection independently of concerns about the financial cost of MNSF, I consider that it isnevertheless disproportionate to require a migrant worker and his dependent family membersto satisfy the three out of six years rule.121. The Court has accepted that a residence requirement may be disproportionate if it is tooexclusive in nature because it ‘unduly favours an element which is not necessarilyrepresentative of the real and effective degree of connection … to the exclusion of all otherrepresentative elements’. (65) To be proportionate, the relevant connecting elements mustalso be known in advance and provision must be made for the possibility of a means ofredress of a judicial nature. (66)122. In my opinion, the Netherlands has not explained convincingly why either a moreflexible residence requirement than the three out of six years rule or other elementsexpressing a comparable degree of connection, such as employment, would not achieve thesame objective in a less restrictive manner. In particular, it has not explainedwhyitacceptsthat an EU citizen residing in the Netherlands during three out of six years is alwayssufficiently connected to the Netherlands, irrespective of his participation in that society butrejectsoutright the possibility that a person’s status as a migrant worker might properly serveto demonstrate the requisite degree of connection with the Netherlands.123. The Netherlands’ other arguments do not lead me to reconsider that conclusion.124. Unlike the Netherlands, I consider that it is of no relevance that alternative sources offunding may be available to study outside the Netherlands or outside the home MemberState for students excluded from MNSF, and that other Member States make funding forstudies abroad conditional on a similar requirement. The fact that students may apply to theNetherlands to obtain funding to study in the Netherlands or that they may claim a generallyavailable tax benefit and enjoy other benefits in connection with studies abroad cannotremedy the discriminatory treatment afforded to them in connection with MNSF. In any event,as the Commission submits in rebuttal, it would appear that these alternative benefits maynot be as beneficial as MNSF; and their availability does not demonstrate that the residencerequirement does not go beyond what is necessary to achieve the desired objective.Measures adopted by other Member States likewise cannot remedy the discriminatorytreatment applied by the Netherlands. It is settled case-law that a Member State cannotjustify an unlawful measure based on the fact that other Member States have adopted thesame measure and may thus be infringing EU law in the same manner. (67)125. The Netherlands further contends that the residence requirement: (i) prevents studentsresiding abroad from claiming that they live independently and are thus entitled to a highergrant when in fact they still live at home, and (ii) prevents people from acquiring the status of

migrant worker in the Netherlands after a token period of employment, becoming entitled toMNSF and then studying outside the Netherlands (possibly, indeed, in their home MemberState).126. In my opinion, neither risk is peculiar to MNSF. Both also exist in connection withstudents’ applications to receive funding to study in the Netherlands. The Netherlands haspresumably found other ways of addressing the same concerns adequately in relation to thatfunding since it is granted to Netherlands nationals and migrant workers alike irrespective ofwhere they reside.127. In any event, the Netherlands can verify a person’s status as a migrant worker (68) andtake the measures to guard against abuse of rights and fraud, taking into the account theindividual circumstances of the case and the distinction between taking advantage of apossibility conferred by law and an abuse of rights. (69)128. I therefore conclude that the Netherlands has not demonstrated that the residencerequirement is prima facie proportionate.129. For the sake of completeness, I will consider none the less whether the Commissionhas put forward other less restrictive measures.130. The Commission has proposed only one alternative. It suggests that the Netherlandsshould coordinate with other Member States. In so doing, it relies on a remark I made inBressolthat the host Member State and the home Member State share a responsibilityactively to seek a negotiated solution for problems resulting from high volumes of studentmobility. (70)131. I agree with the Netherlands that EU law imposes no duty of coordination. Rather,coordination is a form of cooperation that requires the consent of at least one other MemberState. If the Netherlands is entitled to invoke a legitimate aim to justify indirect discrimination,the means to achieve that aim cannot be made conditional upon other Member States’consent and willingness to find a negotiated solution. Member States remain responsible forthe organisation of their education systems. While coordination might resolve some of thedifficulties facing Member States which, like the Netherlands, wish to promote studentmobility through funding,requiringthem to achieve coordination would run counter to theentire spirit of Article 165(1) TFEU. Coordination is not, therefore, an alternative measure.132. In any event, the Commission has not explained how and why the possibility ofcoordination demonstrates that the residence requirement is not proportionate.133. The Netherlands in its rejoinder appears to accept that the Commission put forwardthree possible measures: limiting where MNSF can be used, limiting the duration of MNSFand the obligation of coordination. However, the first and second options are canvassed inthe section of the Commission’s reply where the Commission summarises the measures thattheNetherlandsitself put forward and discussed in its defence. I therefore do not considerthat theCommissionhas put forward these suggestions. In any event, they are not, properlyspeaking, less restrictive alternatives. A Member State must be free to offer generousfinancial support for studies anywhere in the world, provided it respects its obligations underEU law (and, of course, assumes the financial responsibility for the cost of its generousscheme).–Conclusion

135. The aim of MNSF is to increase student mobility from the Netherlands to other MemberStates. It is not to promote mobility between two Member States other than the Netherlands,or from another Member State to the Netherlands, or to fund students residing outside theNetherlands who wish to study where they reside. MNSF is reserved for students who wouldotherwise study in the Netherlands, and who are – so the Netherlands argues – likely toreturn there if they study abroad. It thus seeks to target students who are likely to use theirexperience abroad to enrich Netherlands society and (possibly) the Netherlands employmentmarket.136. I accept that this is a legitimate aim. Nor does the Commission appear to contest it.137. ‘Encouraging mobility of students’ is one of the EU’s objectives; and its importance hasbeen stressed by the Parliament and the Council. (71) It is likewise a legitimate objective forMember States to pursue in the organisation of their educational and study financesystems. (72)138. I also accept that encouraging student mobility serves the public interest. It promotescultural and linguistic diversity and enhances professional development. In that way, itcontributes to a pluralistic society in Member States and in the European Union as a whole.139. In a fully-integrated European Union, it might not be acceptable to make access tofunding conditional on the likely return of a student to the originating Member State, becausethat would impede freedom of movement for EU citizens. In the absence of harmonisation inthis area, however, Member States retain considerable freedom to decide the conditions ofentitlement to funding for studies, provided they do so in a manner consistent with EU law.140. I therefore accept that the social objective is a legitimate aim which is justified byoverriding reasons in the public interest.–Is the residence requirement appropriate to achieve the social objective?

144. I am not convinced that the Netherlands has done so.145. I accept that where students reside prior to pursuing higher education may have someinfluence on where they study. It is true that the Netherlands has not submitted evidencesubstantiating that correlation. I do not consider that to be an obstacle. The actual orpotential contribution of a measure to the stated objective can be established throughquantitative or qualitative analysis. In the present case, I consider that qualitative analysis issufficient, and that the argument is inherently plausible.146. I also agree with the Netherlands that the residence requirement prevents students fromusing MNSF to study where they reside, since students residing outside the Netherlands areprecluded from applying for MNSF.147. However, I am not convinced that there is an obvious link between where studentsreside prior to pursuing higher education and the likelihood that they will return to thatMember State after completing their studies abroad. I do not regard it as inherently likely thata majority of students who reside in the Netherlands and then study abroad will necessarilyreturn to reside in the Netherlands. There may be ways of encouraging that to happen, (74)but it is not self-evident that past residence is a good way of predicting where students willreside and work in the future.148. I conclude that the Netherlands has not established that the residence requirement isappropriate to identify the group of students to whom it wishes to give MNSF.149. For the sake of completeness, I shall consider briefly whether the residencerequirement is proportionate in relation to the social objective.–Is the residence requirement proportionate in relation to the social objective?

150. It is for the Netherlands to show that the three out of six years rule does not go beyondwhat is necessary to identify the group of students who would otherwise study in theNetherlands and who are likely to return there if they study abroad. (75)151. I consider that its arguments in that regard are insufficient.152. I agree with the Netherlands that a requirement to know Dutch or to have a diplomafrom a Netherlands school would not be effective alternative measures.153. Proficiency in Dutch is not necessarily a good indicator of whether students would studyin the Netherlands without MNSF or whether they will return there after their studies abroad.A Dutch-speaking student may decide to study in Antwerp because he knows the languagethere. He might also opt to study in Paris to improve his French or in Warsaw to learn Polish.154. The same reasoning applies to requiring the would-be student to hold a diploma from aNetherlands school. Assuming that a Netherlands school diploma is recognised in otherMember States and that the Netherlands similarly accepts the equivalence of diplomasobtained abroad, it is difficult to see any necessary direct correlation between where a schooldiploma is obtained and whether a particular student would study in the Netherlands withoutMNSF and will return there after his studies abroad.

155. In any event, both those requirements appear indirectly discriminatory and likely toaffect migrant workers in the same way as the residence requirement.156. Is it sufficient for the Netherlands to advance two measures that are clearly notproportionate ways of achieving the objective (and that are, in any event, as (if not more)discriminatory as the residence requirement) in order to show that the residence requirementsatisfies the proportionality test?157. I consider it is not.158. As the party bearing the burden of proof, the Netherlands needs at least to show why itfavours residence of three out of six years to the exclusion of all other representativeelements, such as (for example) residence of a shorter duration, or why the target groupcannot be identified through other (possibly less restrictive) measures, such as (for example)a rule prescribing that MNSF cannot be used to study in the place of residence.159. If the Court were none the less to take the view that the Netherlands has establishedthat the residence requirement is in principle proportionate, I consider that the Commissionhas failed to show that other, less restrictive, measures exist that achieve the same result. Itis quite unclear from the Commission’s written and oral observations whether it was puttingforward any such alternatives. If its argument with regard to coordination is meant to apply inrelation to the social objective, I consider that that argument should be rejected for thereasons already given. (76)–Conclusion

160. I conclude that the indirect discrimination against migrant workers and dependent familymembers resulting from the residence requirement could in principle be justified on the basisof the social objective invoked by the Netherlands. However, I am not convinced that theNetherlands has shown that the residence requirement is an appropriate and proportionatemeans of attaining that objective. In my view, its defence must accordingly fail.

Conclusion

161. In the light of all the foregoing considerations, I am of the opinion that the Court should:(1)declare that, by requiring that migrant workers and dependent family members fulfil aresidence requirement to be eligible under the Wet Studiefinanciering for the fundingof educational studies abroad, the Kingdom of the Netherlands has failed to fulfil itsobligations under Article 45 TFEU and Article 7(2) of Regulation (EEC) No 1612/68 ofthe Council of 15 October 1968 on freedom of movement for workers within theCommunity;order the Kingdom of the Netherlands to pay the costs.

55– Article 1(1) of Council Directive 90/364/EEC of 28 June 1990 on the right of residence (OJ 1990L 180, p. 26). The right of residence was granted under the same conditions to former migrantworkers and self-employed persons who had ceased their occupational activity. See Article 1(1)of Council Directive 90/365/EEC of 28 June 1990 on the right of residence for employees andself-employed persons who have ceased their occupational activity (OJ 1990 L 180, p. 28). Seealso Council Directive 90/366/EEC of 28 June 1990 on the right of residence for students (OJ1990 L 180, p. 30) and its successor, Council Directive 93/96/EEC of 29 October 1993 on theright of residence for students (OJ 1993 L 317, p. 59). Each of those directives, apart fromDirective 90/366 which had already been annulled by the Court in Case C-295/90ParliamentvCouncil[1992] ECR I-4193 (see paragraph 21), was repealed by Directive 2004/38.

Case C-542/09

European Commission

v

Kingdom of the Netherlands

Legal background

Procedure

Assessment

Conclusion