News from the ECJ > (Case C-431/11) UK v Council of the European Union

On 9 September 2010, the European Commission submitted a proposal for a Council Decision on the position to be taken by the European Union concerning an amendment to Annex VI (Social Security) and Protocol 37 to the EEA Agreement. That proposal cited Articles 48 TFEU, 218(9) TFEU and 352 TFEU as constituting the legal basis. On 10 March 2011, the Commission submitted an amended proposal in order to change the legal basis cited. According to the explanatory memorandum to that proposal, as the Lisbon Treaty had extended the competence set out in Article 48 TFEU to self-employed migrant workers, Article 352 TFEU was no longer necessary as a legal basis. On 6 June 2011, the Council accordingly adopted the contested decision on the basis of Articles 48 TFEU and 218(9) TFEU. Taking the view that the contested decision had been adopted on an incorrect legal basis and that it ought to have been adopted on the basis of Article 79(2)(b) TFEU, the United Kingdom brought the present action.

The United Kingdom challenges the use of Article 48 TFEU as the substantive legal basis for the adoption of that decision. In that regard, it should be borne in mind that the choice of the legal basis for an act of the European Union must rest on objective factors amenable to judicial review, which include the aim and content of that measure.

As the Court has already had occasion to state, one of the principal aims of the EEA Agreement, to which the United Kingdom and Ireland are also parties, is to provide for the fullest possible realisation of the free movement of goods, persons, services and capital within the whole EEA, so that the internal market established within the European Union is extended to the EFTA States.

In so far as the contested decision seeks to replace the reference to Regulation 1408/71 with a reference to Regulation 883/2004, the latter having repealed the former, it should be noted that, from a substantive point of view, that decision makes it possible, in compliance with the commitments entered into by the parties to the EEA Agreement and with the level of integration already attained since its entry into force, to retain the extension of social rights to nationals of the States concerned as already intended and given effect to by the EEA Agreement since 1992.

The contested decision is thus precisely one of the measures by which the law governing the EU internal market is to be extended as far as possible to the EEA, with the result that nationals of the EEA States concerned benefit from the free movement of persons under the same social conditions as EU citizens. Were it not for the amendment contemplated by the contested decision, free movement of persons could not be exercised within the EEA under the same social conditions as within the European Union, which would undoubtedly undermine the development of the association and the realisation of the objectives pursued by the EEA Agreement.

It follows that it is necessary to replicate the modernisation and simplification of the rules on the coordination of social security systems which apply within the European Union, specifically referred to by the contested decision when replacing Regulation 1408/71 with Regulation 883/2004, also at the level of the EEA.

In those circumstances, it must be held that, taking into account the context of which it forms part, it was possible for the contested decision to be legitimately adopted on the basis of Article 48 TFEU.

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