Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE COURT (Fourth Chamber)

22 January 2015 (*)

(References for a preliminary ruling — Social security for migrant workers — Regulation (EEC) No 1408/71 — Article 7(2)(c) — Applicability of social security conventions between Member States — Repatriated refugee whose country of origin is a Member State — Completion of periods of employment in the territory of another Member State — Application for grant of an old-age benefit — Refusal)

In Joined Cases C‑401/13 and C‑432/13,

REQUESTS for a preliminary ruling under Article 267 TFEU from the Curtea de Apel Cluj (Romania), made by decisions of 2 July and 27 June 2013, received at the Court on 16 July and 31 July 2013 respectively, in the proceedings

Vasiliki Balazs

v

Casa Judeţeană de Pensii Cluj (C‑401/13),

and

Casa Judeţeană de Pensii Cluj

v

Attila Balazs (C‑432/13),

THE COURT (Fourth Chamber),

composed of L. Bay Larsen, President of the Chamber, K. Jürimäe (Rapporteur), J. Malenovský, M. Safjan and A. Prechal, Judges,

Advocate General: M. Wathelet,

Registrar: I. Illéssy, Administrator,

having regard to the written procedure and further to the hearing on 4 June 2014,

after considering the observations submitted on behalf of:

–        Mr and Mrs Balazs, by S. Dima and A. Muntean, avocats,

–        the Romanian Government, by R. Radu, R. Haţieganu, E. Gane and A.‑L. Crişan, acting as Agents,

–        the Greek Government, by E.-M. Mamouna, acting as Agent,

–        the European Commission, by D. Martin and C. Gheorghiu, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 4 September 2014,

gives the following

Judgment

1        These requests for a preliminary ruling concern the interpretation of Article 7(2)(c) of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons, to self‑employed persons and to members of their families moving within the Community, in the version amended and updated by Council Regulation (EC) No 118/97 of 2 December 1996 (OJ 1997 L 28, p. 1), as amended by Regulation (EC) No 1992/2006 of the European Parliament and of the Council of 18 December 2006 (OJ 2006 L 392, p. 1) (‘Regulation No 1408/71’).

2        The requests have been made in proceedings between Mrs Balazs and the Casa Judeţeană de Pensii Cluj (Area Pensions Office, Cluj (Romania); ‘the Casa Judeţeană de Pensii’) and between the latter and Mr Balazs, concerning the grant of old-age pensions to Mr and Mrs Balazs.

 Legal context

 EU law

3        Article 6 of Regulation No 1408/71 provides:

‘Subject to the provisions of Articles 7, 8 and 46(4) this Regulation shall, as regards persons and matters which it covers, replace the provisions of any social security convention binding …:

(a)      two or more Member States exclusively, …

…’

4        Article 7(2) of Regulation No 1408/71 provides:

‘The provisions of Article 6 notwithstanding, the following shall continue to apply:

…

(c)      certain provisions of social security conventions entered into by the Member States before the date of application of this Regulation provided that they are more favourable to the beneficiaries or if they arise from specific historical circumstances and their effect is limited in time if these provisions are listed in Annex III.’

5        Article 94(1) and (2) of Regulation No 1408/71 provide:

‘1.      No right shall be acquired under this Regulation in respect of a period prior to 1 October 1972 or to the date of its application in the territory of the Member State concerned or in a part of the territory of that State.

2.      All periods of insurance and, where appropriate, all periods of employment or residence completed under the legislation of a Member State before 1 October 1972 or before the date of its application in the territory of that Member State or in a part of the territory of that State shall be taken into consideration for the determination of rights acquired under the provisions of this Regulation.’

6        Regulation (EEC) No 574/72 of the Council of 21 March 1972 (OJ, English Special Edition 1972 (I), p. 159), as amended in particular by Council Regulation (EC) No 1791/2006 of 20 November 2006 (OJ 2006 L 363, p. 1) (‘Regulation No 574/72’), lays down the procedure for implementing Regulation No 1408/71.

 The bilateral agreement

7        The bilateral agreement between the Greek and Romanian Governments concerning final settlement of the compensation in respect of the social security contributions made by Greek political refugees repatriated from Romania, concluded on 23 February 1996 (‘the bilateral agreement’), is not listed in Annex III to Regulation No 1408/71.

8        Article 1(a) and (e) of the bilateral agreement define the terms ‘repatriated person’ and ‘period of insurance’ as follows:

‘(a)      “repatriated person” shall mean a person of Greek origin, established in Romania after 1 January 1945, having the status of political refugee, and also the members of his family, who have returned or, within six years of the date of entry into force of the present agreement, will return to Greece in order to reside there permanently;

…

(e)      “period of insurance” shall mean the period for which social security contributions were paid in Romania, in accordance with Romanian law.’

9        Article 2 of the bilateral agreement provides:

‘1.      The contracting parties shall arrange for the compensation in respect of social security contributions made by repatriated persons in accordance with the provisions of paragraphs 2 and 3 of this article and Article 3 of this agreement.

2.      The Romanian party undertakes to pay to the Greek party a lump sum by way of compensation for the payment of pensions by the Greek party and the covering by it of the period of insurance completed by repatriated persons.

3.      The Greek party undertakes to pay pensions to retired repatriated persons and to recognise the period of insurance completed in Romania by insured repatriated persons, in accordance with Greek social security law.’

10      Under Article 3 of the bilateral agreement, the compensation referred to in Article 2(2) amounts to USD (United States dollars) 15 million.

11      Under Article 5 of the bilateral agreement, ‘[o]nce the sum of USD 15 million has been paid, the Romanian party shall no longer have any obligation regarding the social security rights of repatriated Greek political refugees’.

 The disputes in the main proceedings and the question referred for a preliminary ruling

12      Mr and Mrs Balazs are Greek nationals who have the status of repatriated Greek political refugee. They reside in Thessaloniki (Greece).

13      In 1948, Mr and Mrs Balazs, then 7 and 9 years old respectively, moved to Romania where they were accorded the status of political refugee. They contributed to the public social security system of that Member State for periods of 34 years, 7 months and 6 days and 28 years respectively. They were repatriated to Greece on 18 August 1990.

14      In 1998, Mr and Mrs Balazs applied to the Greek authorities for recognition of the periods of work completed in Romania. By decisions of 21 September 1998, the Greek authorities found that the periods of work completed by Mr and Mrs Balazs in Romania corresponded respectively to 9 382 and 8 351 days of social insurance. In respect of those periods, the Greek authorities decided to recognise only 4 500 days for pension calculation purposes.

15      Mr and Mrs Balazs were subsequently granted old-age pensions by the Greek authorities on that basis.

16      The pension granted to Mrs Balazs was calculated by reference to a total period of insurance of 6 993 days of work, corresponding to 4 500 days recognised in respect of her period of work in Romania and 2 493 days in respect of employment in Greece. The monthly pension calculated in that way amounted to GRD (Greek drachmas) 136 910 (approximately EUR 390).

17      The pension granted to Mr Balazs was calculated by reference to a total period of insurance of 7 733 days, comprising 4 500 days recognised in respect of his period of work in Romania and 3 233 days in respect of employment in Greece. The monthly pension calculated in that way amounted to EUR 596.99.

18      On 11 October and 27 November 2007, Mrs Balazs and Mr Balazs, respectively, applied to the Casa Judeţeană de Pensii for the grant of old-age pensions on the basis of Regulations No 1408/71 and No 574/72.

19      Their applications were refused by decisions of 5 October 2011. In those decisions the Casa Judeţeană de Pensii stated that, since Mr and Mrs Balazs were considered by the Greek authorities to be repatriated Greek political refugees, the Romanian authorities, by virtue of Article 5 of the bilateral agreement, were under no obligation to grant them pensions.

20      Mr and Mrs Balazs each brought an action before the Tribunalul Cluj (Regional Court, Cluj) challenging those decisions.

21      By judgments of 26 September 2012, le Tribunalul Cluj annulled the decisions and ordered the Casa Judeţeană de Pensii to adopt fresh decisions granting Mr and Mrs Balazs old-age pensions in accordance with Regulations No 1408/71 and No 574/72, taking into account the entire contribution periods completed by them in Romania. The Tribunalul Cluj stated that those regulations applied to the applications submitted by Mr and Mrs Balazs since the bilateral agreement was not covered by the exception provided for in Article 7(2)(c) of Regulation No 1408/71. That was so because application of that agreement was not limited in time, the agreement was not mentioned in Annex III to the regulation and its provisions clearly could not be regarded as more favourable to the beneficiaries as the latter had applied for pensions under Regulation No 1408/71.

22      In implementation of those judgments, on 20 and 27 February 2013 the Casa Judeţeană de Pensii adopted two fresh decisions by which, pursuant to Regulation No 1408/71, it granted Mrs and Mr Balazs, respectively, monthly old-age pensions amounting to RON (Romanian lei) 500 and RON 405 (approximately EUR 110 and EUR 90).

23      Appeals against the judgments of the Tribunalul Cluj were brought before the Curtea de Appel de Cluj (Court of Appeal, Cluj), both by Mr and Mrs Balazs and by the Casa Judeţeană de Pensii.

24      The Casa Judeţeană de Pensii contends, in essence, that Regulation No 1408/71 and Regulation No 574/72 do not apply in the present instance because of the bilateral agreement. It states that, in accordance with that agreement, any obligations owed by Romania in relation to repatriated Greek political refugees came to an end since Romania performed its obligation to pay USD 15 million to the Hellenic Republic.

25      Mr and Mrs Balazs contest the grounds of the judgments of the Tribunalul Cluj and seek, on the basis of Regulation No 1408/71 and Regulation No 574/72, recognition of their entitlement to an old-age pension in respect of the periods during which they made contributions in Romania. They submit, in essence, that on account of Romania’s accession to the European Union that Member State is required to apply Regulations No 1408/71 and No 574/72. The bilateral agreement, which is less favourable and is not listed in Annex III to Regulation No 1408/71, is not covered by Article 7(2)(c) of that regulation.

26      In those circumstances, the Curtea de Appel Cluj decided to stay the proceedings and to refer to the Court for a preliminary ruling the following question, which is worded in the same terms in the orders for reference in Cases C‑401/13 and C‑432/13:

‘Is Article 7(2)(c) of Regulation No 1408/71 to be interpreted as including within its scope a bilateral agreement which two Member States entered into before the date on which that regulation became applicable and by which the two States agreed to the termination of obligations relating to social security benefits owed by one State to nationals of the other State who had been political refugees in the territory of the first State and who have been repatriated to the territory of the second State, in exchange for a payment by the first State of a lump sum for the payment of pensions and to cover periods during which social security contributions were paid in the first Member State?’

27      By decision of the President of the Court of 4 September 2013, Cases C‑401/13 and C‑432/13 were joined for the purposes of the written and oral procedure and of the judgment.

 Consideration of the question referred

28      By its question, the national court asks, in essence, whether Article 7(2)(c) of Regulation No 1408/71 must be interpreted as meaning that a bilateral agreement which relates to the social security benefits of nationals of one of the signatory States who had the status of political refugee in the territory of the other signatory State, which was concluded on a date when one of the two signatory States had not yet acceded to the European Union and which is not listed in Annex III to that regulation continues to apply to the situation of political refugees who were repatriated to their State of origin before the bilateral agreement was concluded and the regulation entered into force.

29      First of all, it is to be noted that the Casa Judeţeană de Pensii submits that Regulation No 1408/71 is not applicable in the main proceedings because of the bilateral agreement, in particular Article 5 thereof under which any obligations owed by Romania in relation to Greek political refugees came to an end as Romania performed its obligation to pay USD 15 million to the Hellenic Republic. It should therefore be established whether the circumstances at issue in the main proceedings fall within the scope of Regulation No 1408/71.

30      In accordance with settled case-law, although new legislation is generally valid only for the future, it also applies, according to a generally recognised principle, in the absence of a provision to the contrary, to the future effects of situations which arose during the period of validity of the old law (see judgment in Duchon, C‑290/00, EU:C:2002:234, paragraph 21 and the case-law cited).

31      In order to enable Regulation No 1408/71 to apply to the future effects of situations arising under the period of validity of the old law, Article 94 lays down in particular, in paragraph 2, the obligation to take into consideration, for the purposes of determining rights to benefit, all periods of insurance, employment or residence completed under the legislation of any Member State before 1 October 1972 or before the date of the regulation’s application in the territory of that Member State (see judgment in Duchon, EU:C:2002:234, paragraph 23).

32      Since Regulation No 1408/71 entered into force in relation to Romania upon its accession to the European Union, that is to say, on 1 January 2007, that regulation is applicable ratione temporis to a situation such as that of Mr and Mrs Balazs, who were therefore entitled to rely on it from that date.

33      Contrary to the submissions of the Casa Judeţeană de Pensii, the fact that the bilateral agreement provides that Romania is no longer to have obligations regarding the social security rights of repatriated Greek political refugees once the sum of USD 15 million has been paid is irrelevant in this regard.

34      Indeed, it is clear from Article 6 of Regulation No 1408/71 that the latter, as regards persons and matters which it covers, and subject to certain provisos, replaces the provisions of any social security convention which binds two or more Member States. That replacement is mandatory in nature and does not allow of exceptions save for the cases set out in the regulation (see, by analogy, judgments in Walder, 82/72, EU:C:1973:62, paragraphs 6 and 7; Thévenon, C‑475/93, EU:C:1995:371, paragraph 15; and Rönfeldt, C‑227/89, EU:C:1991:52, paragraph 22).

35      The exceptions provided for by Regulation No 1408/71 include the exception in Article 7(2)(c), according to which the provisions of the social security conventions mentioned in Annex III to the regulation continue to apply notwithstanding Article 6 of the regulation (judgments in Habelt and Others, C‑396/05, EU:C:2007:810, paragraph 87, and Wencel, C‑589/10, EU:C:2013:303, paragraph 35), provided that those conventions are more favourable to the beneficiaries or they arise from specific historical circumstances and their effect is limited in time.

36      In the present instance, it is not in dispute that the bilateral agreement is not listed in Annex III to Regulation No 1408/71. It follows that, in a situation such as that at issue in the main proceedings, Regulation No 1408/71, in accordance with Article 6(a) thereof, in principle replaced that agreement.

37      The national court and the Romanian Government rely, however, on the judgment in Rönfeldt (EU:C:1991:52) in order to submit that, notwithstanding the terms in which Articles 6 and 7(2)(c) of Regulation No 1408/71 are couched, the bilateral agreement continues to apply.

38      In that judgment the Court held, on the basis of Articles 45 TFEU and 48 TFEU, that, in the case of migrant workers, bilateral social security conventions must continue to apply after the entry into force of Regulation No 1408/71, irrespective of whether they are listed in Annex III to the regulation, where their application is more favourable to the worker.

39      It must therefore be determined whether the principles established in the judgment in Rönfeldt (EU:C:1991:52) are applicable in circumstances such as those at issue in the main proceedings.

40      First, as has been noted in paragraph 34 of the present judgment, the principle of replacement laid down in Regulation No 1408/71 is mandatory in nature and does not, in principle, allow of exceptions.

41      Second, the principles established in the judgment in Rönfeldt (EU:C:1991:52) are derived from the notion that the person concerned was entitled to entertain a legitimate expectation that he would be able to benefit from the provisions of a bilateral convention which alone was applicable to him on the date when he decided to move to another Member State (see, to this effect, judgment in Kaske, C‑277/99, EU:C:2002:74, paragraph 27).

42      Accordingly, in circumstances such as those at issue in the main proceedings, an essential feature of which is that the persons concerned left Romania for Greece in 1990, that is to say, six years before the bilateral agreement was concluded, those persons could not entertain a legitimate expectation that they would be able to benefit from the provisions of the bilateral agreement as it had not yet been concluded on the date of their repatriation to Greece.

43      In any event, in the main proceedings Mr and Mrs Balazs do not seek to benefit from the bilateral agreement. On the contrary, they wish Regulation No 1408/71 to be applied to them. In those circumstances, the Romanian Government cannot rely on the judgment in Rönfeldt (EU:C:1991:52) in order to establish that the bilateral agreement continues to apply to their situation.

44      In the light of all the foregoing considerations, it must be held that the principles established in the judgment in Rönfeldt (EU:C:1991:52), which enable the provisions of Regulation No 1408/71 to be disapplied in order to continue to apply a convention which that regulation has normally replaced, are not applicable in circumstances such as those at issue in the main proceedings.

45      It follows that the answer to the question referred is that Article 7(2)(c) of Regulation No 1408/71 must be interpreted as meaning that a bilateral agreement which relates to the social security benefits of nationals of one of the signatory States who had the status of political refugee in the territory of the other signatory State, which was concluded on a date when one of the two signatory States had not yet acceded to the European Union and which is not listed in Annex III to that regulation does not continue to apply to the situation of political refugees who were repatriated to their State of origin before the bilateral agreement was concluded and the regulation entered into force.

 Limitation of the temporal effects of the judgment

46      The Romanian Government requests the Court to limit the temporal effects of its judgment if it holds that the bilateral agreement does not fall within the scope of the exception laid down in Article 7(2)(c) of Regulation No 1408/71.

47      In support of its request, the Romanian Government submits, first, that the Romanian authorities acted in good faith. It states first of all that the position of the Romanian authorities is based on settled case-law of the Court, in particular the judgment in Rönfeldt (EU:C:1991:52). Next, whilst the Commission has initiated an infringement procedure against Romania in order for it to be found that it has failed to fulfil its obligations pursuant to Regulation No 1408/71, the position of that Member State, in that procedure, has been constantly maintained and the Commission did not react to its request to organise technical consultations and to approach the Greek authorities. Nor can doubt be cast on the good faith of the Romanian authorities by the fact that other Member States, faced with similar problems, have agreed to apply Regulation No 1408/71, since the agreements concluded by the Hellenic Republic with those other States differ from the agreement concluded between it and Romania. Finally, the Romanian authorities have approached the Greek authorities in order to clarify the situation.

48      Second, the Romanian Government draws the Court’s attention to the serious financial consequences to which retroactive application of the Court’s judgment would give rise. According to estimates of the Casa Națională de Pensii Publice (National Public Pensions Fund), the additional sum that would have to be paid would amount to RON 38 560 683 (approximately EUR 8 680 537). The Romanian Government adds that around 800 applications similar to those of Mr and Mrs Balazs are currently pending.

49      In that connection, regard must be had to the settled case-law of the Court to the effect that the interpretation which, in the exercise of the jurisdiction conferred on it by Article 267 TFEU, the Court gives to a rule of EU law clarifies and defines the meaning and scope of that rule as it must be or ought to have been understood and applied from the date of its entry into force. It follows that the rule as thus interpreted may, and must, be applied by the courts even to legal relationships which arose and were established before the judgment ruling on the request for interpretation, provided that in other respects the conditions for bringing a dispute relating to the application of that rule before the courts having jurisdiction are satisfied (see judgment in Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 58 and the case-law cited).

50      It is only quite exceptionally that the Court may, in application of the general principle of legal certainty inherent in the EU legal order, be moved to restrict for any person concerned the opportunity of relying on a provision which it has interpreted with a view to calling into question legal relationships established in good faith. Two essential criteria must be fulfilled before such a limitation can be imposed, namely that those concerned should have acted in good faith and that there should be a risk of serious difficulties (see judgment in Santander Asset Management SGIIC and Others, EU:C:2012:286, paragraph 59 and the case-law cited).

51      More specifically, the Court has taken that step only in quite specific circumstances, notably where there was a risk of serious economic repercussions owing in particular to the large number of legal relationships entered into in good faith on the basis of rules considered to be validly in force and where it appeared that individuals and national authorities had been led to adopt practices which did not comply with EU law by reason of objective, significant uncertainty regarding the implications of EU provisions, to which the conduct of other Member States or the Commission may even have contributed (see judgment in Santander Asset Management SGIIC and Others, EU:C:2012:286, paragraph 60 and the case-law cited).

52      As the Advocate General has observed in points 98 and 99 of his Opinion, the Romanian Government has not established that there is a risk of serious difficulties. Whilst the Romanian Government refers to 800 applications similar to those of Mr and Mrs Balazs, it does not mention at all the total number of persons in a position comparable to theirs. Nor has the Romanian Government specified whether the sum of RON 38 560 683 also covers the 800 similar applications that are currently pending. These applications would in any event not be affected by a limitation of the temporal effects of the judgment (see, to this effect, judgment in Bosman, C‑415/93, EU:C:1995:463, paragraph 144).

53      Since the second criterion referred to in paragraph 50 of the present judgment is not fulfilled, it is not necessary to determine whether the criterion requiring those concerned to have acted in good faith is satisfied.

54      It follows from the foregoing considerations that it is not appropriate to limit the temporal effects of the present judgment.

 Costs

55      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Fourth Chamber) hereby rules:

Article 7(2)(c) of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, in the version amended and updated by Council Regulation (EC) No 118/97 of 2 December 1996, as amended by Regulation (EC) No 1992/2006 of the European Parliament and of the Council of 18 December 2006, must be interpreted as meaning that a bilateral agreement which relates to the social security benefits of nationals of one of the signatory States who had the status of political refugee in the territory of the other signatory State, which was concluded on a date when one of the two signatory States had not yet acceded to the European Union and which is not listed in Annex III to that regulation does not continue to apply to the situation of political refugees who were repatriated to their State of origin before the bilateral agreement was concluded and the regulation entered into force.

[Signatures]

* Language of the case: Romanian.

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