Important legal notice

61997C0153

European Court reports 1998 Page I-08645

Opinion of the Advocate-General

I - The factual and legislative background to the main proceedings and the questions referred for a preliminary ruling

It is, once again, a Spanish court which has referred the question to the Court, but, in contrast to the two cases mentioned above, (4) this time the reference comes from a court of last resort. By order of 23 April 1997 the Tribunal Supremo, Sala de lo Social (Supreme Court, Social Chamber), referred the following questions to the Court of Justice for a preliminary ruling:

`(1) Must the calculation method laid down in Heading D, paragraph 4, of Annex VI to Regulation No 1408/71, as amended by Regulation No 1248/92 - under which the Spanish theoretical pension is determined on the basis of the worker's contributions during the calculation period immediately preceding payment of his last contribution to the Spanish social security, with revalorisation of the resultant theoretical pension on the same terms as those which, under Spanish national legislation, would have been applied to revalorisation of a pension becoming payable at the time of payment of the last contribution in Spain - be regarded as contrary to Articles 48 and 51 of the Treaty establishing the European Community?

(2) In order to guarantee equal treatment for migrant workers in matters of social security, must the basis for determining the Spanish pension be calculated by reference to what would have been the bases for the migrant worker's contributions if he had stayed in Spain during the calculation period preceding materialisation of the risk provided for on a general basis by Spanish legislation?'

2. I do not believe that we can fully understand the questions referred here without a brief summary of the relevant rules of national law and the decisions made by the Court in Lafuente Nieto and Naranjo Arjona (5) before even considering the subject-matter of the proceedings in the national court.

6. The Convention and other international agreements concerning social security signed by Spain ceased to be in force (apart from provisions which were the subject of express reservation (13) ) on 1 January 1986, when, as I have said, the Regulation became part of Spanish law. Under Article 6 of the Regulation, it replaced, as a matter of principle, (14) and only as regards its scope ratione personae et materiae, any previous social security convention which was exclusively binding on two or more Member States.

10. In its ruling on interpretation in Lafuente Nieto, which concerned the calculation of social security benefits payable to a Spanish worker who became incapacitated for work in Germany and who had paid no contributions under the Spanish legislation during the requisite period for the determination of the average contribution basis, (18) the Court laid down two important principles. First of all, it made clear that Article 47(1)(e) (now subparagraph (g)) of the Regulation in fact concerns a method for calculating benefits based on average contributions like that provided for by Spanish law (see paragraphs 16 to 29). (19) The rule at issue, the Court added, is in conformity with Articles 48 and 51 of the Treaty, but should be properly interpreted in the light of the objectives of those articles. They require migrant workers to be protected from any adverse effect stemming from the exercise of their right to freedom of movement, such as the possible reduction in the amount of social security benefits payable to them. Article 47(1)(e) (now subparagraph (g)) of the Regulation cannot therefore be interpreted, not even by way of exception, so as to allow the use, to the detriment of migrant workers, of a method of calculation based on minimum rather than average contributions. (20) Nor, according to the same judgment, can that calculation be based on the amount of contributions paid in the Member State of emigration. (21) The reference contribution basis must always be that provided for by the national legislation which would have been applicable if the person concerned had retained an obligation to pay contributions under the legislation of the Member State responsible for payment. However, the theoretical amount of the benefit thus obtained is to be duly revalorised and increased as if the person concerned had continued to work under the same conditions in the Member State in question (see paragraphs 30 to 43). (22)

11. Following the judgment in Lafuente Nieto, the Tribunal Supremo referred the questions set out above (see point 1) to the Court of Justice. Mr Grajera Rodríguez, the plaintiff in this case, became entitled to a Spanish old-age pension on 2 February 1993, having completed periods of contribution to the Spanish social security system (from 1953 to 1961 and from 1967 to 1969) and to the German system (from 1961 to 1967 and from 1969 to 1993). Therefore he did not pay contributions under Spanish law during the period laid down by the social security legislation for the determination of his average contribution basis (3 February 1985 to 2 February 1993). As is clear from the order for reference, the pension awarded to him by the INSS amounting to PTA 5 141 per month (including the increments applicable) was calculated from a basic amount of PTA 2 873, resulting from the sum of the contribution bases corresponding to the contributions actually paid by Mr Grajera Rodríguez during the 96 months immediately prior to 30 June 1969 (date of payment of his last Spanish social security contribution before he emigrated to Germany) and the division of the amount thereby obtained by 112. At first instance, the Juzgado de lo Social (Social Court), Madrid, granted Mr Grajera Rodríguez's application and ordered the INSS to use a basis of PTA 149 988 for calculation of the monthly amount, apparently set by reference to the maximum statutory annual bases for manual workers in the period from 1 February 1985 to 31 January 1993 inclusive; this was because the average monthly wages actually received by the plaintiff in Germany in the last eight years of his career were far higher than (in fact more than double) those Spanish maximum bases. The judgment at first instance was quashed by the Tribunal Superior de Justicia (High Court of Justice), Madrid, which essentially confirmed that the calculation made by the INSS was correct, whereupon Mr Grajera Rodríguez lodged an appeal in cassation with the referring court to ensure uniformity of the law (para la unificacíon de doctrina), arguing that the judgment appealed against conflicted with judgments recently handed down by other Spanish courts of law and with the decision of that court of 27 March 1995. (23)

12. The Tribunal Supremo acknowledges that the criterion applied in this case by the INSS is that laid down in Heading D, paragraph 4, of Annex VI to the Regulation, but takes the view that the method of calculation under the Regulation appears likely to lead to a different outcome from that intended by Articles 48 and 51 of the Treaty. The mere revalorisation of the theoretical amount does not ensure equality of treatment for migrant and non-migrant workers where the person concerned ended his working life in another Member State and the periods of contribution in Spain were completed a long time ago. In many cases the historical bases corresponding to the contributions paid by the worker during the period referred to in Heading D, paragraph 4, to Annex VI are not even known. (24) Apart from that - the Tribunal Supremo points out - there has been a significant improvement in the level of social protection provided by the Spanish system only in the last few decades, through increases in salaries as a result of overall economic growth and the gradual bringing of contribution bases into line with actual wages. (25) On the other hand, according to the national court, the array of criteria for revalorisation (single and uniform percentages, lump-sum increments, mixed improvements) applied to pensions in the Sixties and in the first half of the Eighties has resulted in a `concentration' of social protection on minimum pensions, with a marked trend for the average pension to be reduced to the level of the minimum pension. (26) Finally, the guarantee of automatic annual increases in pensions to bring them into line with the consumer price index, introduced by Law No 26 of 1985 - after the Spanish legislature had laid down general criteria for the revalorisation of pensions for the first time in 1974 - was only partial and only concerned pensions maturing after the new legislation came into force. (27)

13. The order for reference states that this case cannot be decided on the basis of the principles laid down by the Court in Lafuente Nieto. That judgment concerned the interpretation and validity of Article 47(1) of the Regulation in the version predating Regulation No 1248/92 (28) (see above, point 8); moreover, it requires the relevant revalorisations and increases to be applied to the theoretical amount of the benefit payable to the person concerned of `as if the person concerned had continued to work under the same conditions in the Member State in question.' Otherwise, the national court points out, the pension `cannot be revalorised as if the worker had continued pursuing his activity in Spain because that type of updating, which is in fact updating of the contribution bases (see above, point 4), cannot be applied to the pension.' (29)

As is clear from the second question referred for a ruling, the Tribunal Supremo takes the view, in line with its own case-law on the point, (30) that, in order to achieve full updating on objective bases of the benefit payable to the worker concerned in circumstances such as those described, the contribution basis to be taken into account for the determination of the social security benefit at issue should be an average between the maximum and the minimum bases set by the provisions in force in Spain during the reference period - that is to say, during the 96 months prior to materialisation of the risk - for the relevant professional category. `Given that it is impossible in practice to reconstruct the elements of an insurance career in Spain, the average basis constitutes [again, according to the Tribunal Supremo] an amount weighted in accordance with the remuneration of an average worker from the appropriate professional category.' However, the national court points out that it is not on the question whether the average contribution bases of the last eight years should be used (rather than those prior to emigration) that it seeks a ruling from the Court of Justice: `the choice of such factors [for updating] is a matter for national law.' The doubts raised by the Tribunal Supremo concerning the validity of Heading D, paragraph 4, of Annex VI to the Regulation relate to another matter: given that, according to the case-law of the Court of Justice, a Spanish migrant worker has the right to the same treatment for the purposes of social security as he would have received had he continued to work in Spain, under the same conditions, until materialisation of the risk, is a system of calculation founded on historical contribution bases, such as the Spanish system, which revalorises the resulting pension only if pensions of the same kind existing on the date of the payment of the last contribution before emigration have been revalorised, in conformity with the objectives set out in Articles 48 and 51 of the Treaty? The national court makes clear that it is inclined to answer that question in the negative and points out that, under the system of updating laid down by the provision in issue, a migrant worker is placed on the same footing as a non-migrant worker in a piecemeal and arbitrary fashion. It would therefore be very difficult for such a system to make good the reduced value of benefits deriving from a calculation based on contributions in the distant past.

14.The Court delivered its judgment in Naranjo Arjona after the written stage of these proceedings was concluded. As is well known, that judgment, also cited above (see footnote 1), confirms - with reference to Article 47(1)(e) of the Regulation, now subparagraph (g) in the version amended by Regulation No 1248/92 - the principles of interpretation laid down in the earlier judgment in Lafuente Nieto, which I have described above (see point 10). The Court also stated - and this is of relevance to the judgment in this case - that where application of that provision `so interpreted proves less advantageous, for workers who were already employed in another Member State before the Regulation entered into force in the first Member State, than the application of a previous convention between those two States, the competent court should, by way of exception, apply the rules laid down by that convention.'

II - Legal analysis and answer to the questions referred

15.I have already referred to the case-law of the Court on the objective of Articles 48 to 51 of the Treaty. Those provisions, as the Court has held in numerous judgments, further the establishment of the greatest possible freedom of movement for Community workers and are therefore intended to ensure that those workers do not lose the social security advantages guaranteed by their national legislation following emigration to another Member State. Such an effect might dissuade a Community worker from exercising his fundamental right to freedom of movement and would therefore constitute an obstacle to such freedom. The essential aim of Regulation No 1408/71, adopted under Article 51 of the Treaty, is to ensure that social security schemes governing workers in each Member State who move within the Community are applied in accordance with uniform Community criteria. To that end it lays down a whole set of rules founded, in particular, upon the prohibition of discrimination on grounds of nationality or residence and upon the maintenance by a worker of the rights acquired by virtue of the social security schemes which are or have been applied to him. That principle of equal treatment prohibits not only overt discrimination but also all covert forms of discrimination which, by applying distinguishing criteria other than citizenship or residence, in fact achieve the same result. However, still according to the settled case-law of the Court, breach of the general principle of equality presupposes the application of the same rule to different situations or of different rules to comparable situations without objective justification.

16.In the present case it is not disputed that the provision of the Regulation which requires the basic amount of the Spanish old-age pension to be determined on the basis only of the insurance periods actually completed under the Spanish legislation - regardless of whether such periods were in the recent or distant past - covers both migrant and non-migrant workers without distinction. As has been observed, however, the order for reference points, albeit tentatively, to a possible disparity in the treatment of the two categories of worker. Such discrimination, were it to exist, would concern only some, but none the less presumably the majority of migrant workers. It seems to be a common trend in Europe for Spanish migrant workers to spend the last years of their insurance career abroad and to have achieved in their host country (especially if, as is often the case in proceedings brought before the Spanish courts, the host country is Germany) a level of earnings far higher than either the Spanish average salary or the minimum contribution bases applicable for the professional category in question. Thus all migrant workers who have spent the last years of their working life and final contribution periods outside Spanish territory would be placed at a possible disadvantage by Community legislation on the determination of contribution bases and the period of payment to be taken into account - where they acquire the right to a Spanish old-age pension following application of the aggregation mechanism mentioned above (see above, point 7). That is precisely the position of the plaintiff in the present case. According to the case-law of the Court, any discrimination is not eliminated by the mere fact that there is no such discrimination against other migrant workers who find themselves in the reverse situation (last eight contributory years spent in Spain).

17.Why is the Tribunal Supremo asking the Court for a ruling on the compatibility with the objective of Article 51 of the Treaty of the rules implementing the Spanish legislation on old-age pensions laid down in Heading D, paragraph 4, of Annex VI to the Regulation? Looking at the grounds of the order for reference, it seems to me that the reasons that can be discerned are twofold. There are also two ways in which non-migrant workers are favoured by the Regulation in conjunction with the provisions of Spanish law. As I have said several times, in contrast to the position regarding (most) migrant workers, the basic amount for non-migrant workers can be calculated from the contribution bases (and thus from actual remuneration) in the last eight years of their working life immediately preceding the attainment of pensionable age. Accordingly, the bases used for the calculation will, as a rule, have reached their highest level in the whole of the working life of the person concerned.

18.In addition, the calculation of the benefit will not be hampered by the administrative and statistical problems which inevitably complicate such operations in the case of social security contributions made decades earlier. Difficulties of that sort seem to be unheard of at the current stage of legislative development of the Spanish social security system, which began with the reform of 1979.

18.It cannot be denied that the problems highlighted by the Tribunal Supremo are genuine and serious. However, I do not believe that they are capable of affecting the validity of Heading D, paragraph 4, of Annex VI to the Regulation. On this point I think I can endorse the line of argument pursued by the Commission in these proceedings: according to that institution, intervening in these proceedings, it is not possible to speak of the invalidity of the method of updating laid down by the provision in question because in fact it does not prescribe any particular method. That interpretation of the provision at issue is, moreover, confirmed by the judgments in Lafuente Nieto and Naranjo Arjona. In those judgments the Court decided that the basic amount should be calculated on the basis of contributions actually paid by the migrant worker under the relevant national legislation alone. On the other hand, the Court has held that the implementation of the Regulation can under no circumstances result in a reduction in the value of the social security benefits due to the person concerned under the national law of a Member State. The Court, therefore, confined itself to indicating a starting point and target which the competent social security institution (or, in cases of dispute, a national court) should bear in mind when applying the Community rules. The selection and use of the most suitable instruments of national law for achieving the complete revalorisation of the benefit due to the worker taking that starting point as a basis is, however, another matter. It seems to me that such operations cannot but fall within the exclusive jurisdiction of the national courts; the referring court in the present case, moreover, clearly demonstrates that it takes the same view when it states that the selection of the most suitable method of updating is a matter for national law (see above, point 13).

19.The foregoing observations should be qualified further, as follows. In its order for reference, the Tribunal Supremo also referred to the `social and economic conditions' which, in the distant past, shaped the Spanish legislation on minimum wages and contribution bases which did not reflect actual remuneration. The national court also touched on the policy pursued by Spanish governments until 1985 of concentrating on the minimum levels of periodical revalorisations for pension purposes. In the light of those factors, the possibility cannot be ruled out that - even after the complete revalorisation of the pension due to the worker `as though he had continued to work in Spain', carried out by the national court in the most favourable manner allowed by national law - the final amount of the benefit resulting from the calculation may be very small. That possibility, it is almost superfluous to point out, arises because of the features of - and, I would even say, from the very ideology and political philosophy behind - the Spanish social security legislation of a previous era; it cannot, therefore, be said to have any implications for the assessment of the validity of Heading D, paragraph 4, of Annex VI to the Regulation. Its aim is not the harmonisation but the coordination of the national legislation of the Member States on social security. The Regulation allowed different national schemes to exist `creating different claims on different institutions against which the claimant possesses direct rights by virtue either of national law alone or of national law supplemented, where necessary, by Community law.' Accordingly, the substantive and procedural differences between the social security systems of the individual Member States, and thus in the rights of the persons employed there, are unaffected by Article 51 of the Treaty. Moreover, for a worker in the same position as the plaintiff in the present case, the application of the Regulation is definitely an advantage, since, under Spanish legislation alone (disregarding, for the time being, the implementing provisions of the Convention; see below, point 22), he would have had no right to the disputed pension as he would not have completed sufficient insurance periods.

20.I now turn to the other ground on which the national court considers that the provision in issue may be contrary to Article 51 of the Treaty. As the Tribunal Supremo points out, the Court held in Lafuente Nieto that a migrant worker who receives a pension must be treated as if he had continued to work under the same conditions in his Member State of origin (see above, point 10); that condition is intended to ensure that the migrant worker's treatment as regards pension rights complies with Article 51. On the other hand, Heading D of Annex VI to the Regulation contains a provision requiring the calculation of the theoretical amount to be linked to the contributions the worker paid to the competent social security institution before he emigrated. The amount of such contributions would, however, notwithstanding their subsequent updating, still bear no relation to the salary the person concerned received when the risk materialised. Heading D, paragraph 4, of Annex VI to the Regulation, it is argued, is thus invalid because the means chosen by the Community legislature are incapable of achieving the objective pursued.

21.I have serious misgivings about this line of argument. In establishing the criterion according to which a migrant worker's career must - for pension purposes, which is what we are concerned with here - be deemed to have been spent without interruption in the Member State of origin, the Court wished to use a formula - a legal fiction, as it were - which serves to ensure the effectiveness of the social security safety net. It is a formula obviously intended to meet the need to update the benefit due to a worker who has made contributions to the social security system long before materialisation of the risk. However, this fiction, it must be said, is to be treated with caution. When interpreting it, it is necessary not to lose sight of the fundamental characteristics of the so-called contributory model of financing under the social security system, whereby it is ultimately the contributions made by the insured which determine the amount of the benefits paid. As the Spanish Government has pointed out in this case, `under a time-honoured principle of our social security system, the amount (of contributory pensions) is closely bound up with considerations relating to contributions and proportionality in order that financial benefits should reflect faithfully the contributions made in the past, with the result that those who have paid similar contributions receive a similar level of benefits.'

21.Moreover, the criterion which requires a migrant worker to be treated as though he had continued to work in his Member State of origin cannot be relied on in support of his claim for a pension of an amount reflecting the most recent salary received (in the State of emigration) during a period when he was not under an obligation to pay contributions (nor indeed paid any) to the body responsible for payment (in the State of origin). Let us suppose that, to meet such a claim, the benefit in issue is determined on the basis of the arithmetical average of the maximum and minimum contribution bases laid down for the relevant professional category by Spanish law in the eight years before materialisation of the risk. This is what the Tribunal Supremo proposes. However, that solution would give a migrant worker an undue advantage over a hypothetical non-migrant worker in the same professional category. A worker who remained in his native country and one who went to work in another Member State would, on that hypothesis, each receive a pension in line with the salary received in the final years of their working lives; however, during the period under consideration, only the non-migrant worker would have contributed to the financing of the social security system to which the benefit is to be charged. Above all, on the basis of that reasoning, the remuneration received by a migrant worker while abroad would unjustifiably be allowed to have a twofold effect: to use the example of the present case, the contributions paid in the last eight years of employment by a worker in a position similar to that of Mr Grajera Rodriguez would be taken into account in the calculation of both the German pension and the Spanish one.

21.For that reason I believe that the Community legislature made correct use, on the points referred by the Tribunal Supremo, of the discretion which it has as regards the implementation of the principle of freedom of movement for workers. Having regard to the principles of fair distribution, of respect for the economic and financial balance of national social security systems and, therefore, of the very effectiveness of social security protection, principles which govern the operation of the system set up by the Regulation, the questions referred in the present case must in my view be answered in the negative.

22.However, that does not conclude the analysis of the present case. As is clear from the case-law, even where the Court considers that the complaints made by the plaintiff in the main proceedings against the measure alleged to be invalid, are unfounded, it remains free to ascertain whether the act complained of is vitiated by other factors, as it is not bound from that point of view by the order for reference.

22.As regards the present case, I have already pointed out several times that in Lafuente Nieto and Naranjo Arjona the Court discussed the objective of Heading D, paragraph 4, of Annex VI to the Regulation. I have also observed that, although that provision came into force after the events in issue in those two cases - and thus remains, in both cases, irrelevant to the subject-matter of the questions referred - the Court cited it in support of the interpretation it gave in both judgments of the provision laid down in Article 47(1)(e), (now (g)), of the Regulation (see above, footnote 17). The Court wished to make clear that effective and uninterrupted updating of the theoretical amount had to be a criterion, so that it met as effectively as possible the objective of protecting the person concerned as though he had continued to work in the Member State in question. Only in that way is it possible to ensure the compatibility with the principles laid down by Article 51 of the Treaty of the provisions of the Regulation requiring the average contribution basis of the migrant worker to be determined only according to the contributions actually paid to the social security institution responsible for payment.

22.That said, in my view the rule contained in paragraph 4(b), cited above, which limits the relevant period for the updating of the pension of a migrant worker in circumstances such as those of the plaintiff in the present case to the year preceding materialisation of the risk - disregarding, without reasonable justification, the actual year during which the risk materialises - is incompatible with Article 51. The conclusion to which I am now drawing the Court's attention is, moreover, confirmed by the new version of the provision in question which the Community legislature introduced - specifically `pursuant to the case-law of the Court of Justice (in particular the judgment in ... Lafuente Nieto), to adapt [the existing legislation] in line with internal provisions, where the basic pension amount is calculated on the basis of past contributions' - in Regulation No 1223/98. With effect from 1 July 1998, paragraph 4(b) of Section D of Annex VI reads: `the amount of the pension obtained shall be increased by the amount of the increases and revalorisations calculated for each subsequent year [thus including the year in which the risk materialises], for pensions of the same nature' (see Article 1(8)(b) and Article 3(1)). The version of the Regulation which must be applied in the present case is that predating the amendment I have cited and is thus, in my view, partially invalid as I have explained.

22.To conclude this analysis, and pursuant to the Court's judgment in Naranjo Arjona (see above, point 14), one matter remains to be clarified. This is the principle of the maintenance of advantages secured for migrant workers through the joint action of national law and conventions concluded between Member States in the field of social security, which were subsequently replaced by different, less favourable, Community legislation. The possibility cannot be ruled out that in the main proceedings the calculation of the contested benefit may in practice lead to different results, according to whether the system of calculation provided for by the Regulation (see Article 47(1)(e) and Heading D, paragraph 4, of Annex VI interpreted as I propose), or that provided for by Article 25 (1)(b) of the Convention (see above, point 14), is used. It is therefore for the national court to ascertain - by comparing the results separately obtained using the two methods - `whether application of that convention would in practice be more or less advantageous for the workers concerned than application of the Regulation. In the former case, by way of exception and in accordance with the principle stated in the Rönfeldt judgment cited above, (51) the rules laid down by the convention should be applied. In the latter case, it is the rules laid down by the Regulation, as interpreted by the Court, that must be applied.' (52)

III - Conclusion

In the light of the considerations set out above, I propose that the Court should answer to the questions referred by the Tribunal Supremo for a preliminary ruling as follows:

(1)In so far as Heading D, paragraph 4, of Annex VI to Council Regulation (EEC) No 1408/71 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, as amended by Council Regulation (EEC) No 1248/92 of 30 April 1992, provides that, in situations such as that in the main proceedings, the amount of the theoretical Spanish benefit, calculated on the basis of actual contributions paid by the worker in the years immediately preceding payment of the last contribution under the relevant legislation, is to be the subject of appropriate revalorisation for each subsequent year only until the year before materialisation of the risk, it is incompatible with Article 51 of the Treaty and therefore, to that extent, invalid. Consideration of the questions referred has not disclosed any other factors of such a kind as to affect the validity of that provision.

(2)Where application of the provision in question, as interpreted, proves, for a worker who was already employed in another Member State before the entry into force of the Regulation in Spain, less advantageous than an earlier convention concluded with that State, the national court must, by way of derogation, apply the provisions of that convention.

(1) - Case C-251/94 Lafuente Nieto [1996] ECR I-4187 and Joined Cases C-31/96, C-32/96 and C-33/96 Naranjo Arjona and Others [1997] ECR I-5501.

(2) - See Council Regulation (EEC) No 1408/71 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, as amended, updated and adapted, inter alia: by Council Regulation (EEC) No 2001/83 (OJ 1983 L 230, p. 6); by Annex I, Part VIII, of the Act concerning the Conditions of Accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties (hereinafter `the Accession Act', OJ 1985 L 302, p. 170); and by Council Regulation No 1248/92 (cited below at footnote 3). There were further amendments to the Regulation even after the publication of a consolidated version in December 1992 (OJ 1992 C 352, p. 1).

(3) - Annex VI to the Regulation lays down specific rules for implementing the legislation of certain Member States. Paragraph 4(a) of heading D was introduced by Council Regulation (EEC) No 1248/92 of 30 April 1992 which amends Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community and Regulation (EEC) No 574/72 fixing the procedure for implementing Regulation (EEC) No 1408/71 (OJ 1992 L 136, p. 7, in particular, p. 24).

(4) - The previous questions were referred by the Tribunal Superior de Justicia de la Comunidad Autónoma del País Vasco in Lafuente Nieto and by the Tribunal Superior de Justicia de la Comunidad de Extremadura, Càceres, in Naranjo Arjona.

(5) - The legislative background and the relevant case-law is described in greater detail in my Opinions of 20 June 1996 in Case C-251/94 (cited above at footnote 1) [1996] ECR I-4190, in particular, paragraphs 4 and 11 to 18, and of 17 June 1997 in Joined Cases C-31/96, C-32/96 and C-33/96 (cited ibidem) [1997] ECR I-5503, in particular, paragraphs 6 to 12, 19 to 22, 27 and 28.

(6) - Such as those relating to the minimum age (generally 65) and the minimum period of contributions of the person entitled (15 years, of which at least two must have been during the eight years immediately preceding the date on which the right to the benefit arose).

(7) - Under the Spanish general scheme, the contribution basis for all the so-called joint risks, on which the contributions payable by the employer and by the worker are calculated by applying percentages fixed annually by the Government (for 1997, those percentages were, respectively, 23.6% and 4.7%), is determined by the total payment (in any form or denomination) which an employed person is entitled to receive (or is actually receiving, if greater than the applicable maximum) during the reference month. Sums paid at intervals of more than one month are apportioned over the 12 months of the year (see Real Decreto Legislativo 1/1994, de 20 de junio, por el que se aprueba el texto refundido de la Ley General de la Seguridad Social, Articles 105(2) and 109(1) (Boletín Oficial del Estado of 29 June 1994, No 154, p. 20658), and Real Decreto 2064/1995, de 22 de diciembre, por el que se aprueba el Regolamento General sobre Cotización y Liquidacíon de otros Derechos de la Seguridad Social, Articles 8 and 23 (BOE of 25 January 1996, No 22, p. 2295)). This area was the subject of a recent legislative reform, which is not relevant for the purposes of this Opinion (see Ley 241/1997, de 15 de julio, de Consolidación y Racionalización del Sistema de Seguridad Social (BOE of 16 July 1997, No 169, p. 21781), Real Decreto 1426/1997, de 15 de septiembre, por el que se modifican determinados artículos de los Reglamentos Generales de Recaudación de los recursos del sistema de la Seguridad Social y sobre Cotización y Liquidación de otros recursos de la Seguridad Social (BOE of 30 September 1997, No 234, p. 28443), and Real Decreto 1647/1997, de 31 de octubre, por el que se desarrollan determinados aspectos de la Ley 241/1997, de 15 de julio, de Consolidación y Racionalización del Sistema de Seguridad Social (BOE of 13 November 1997, p. 33156)).

(8) - That figure is the result of multiplying the number of years in that legal reference period (8) by a factor of 14, which corresponds to the number of months' pay received annually.

(9) - See Ley 261/1985, de 31 de julio, de medidas urgentes para la racionalización de la estructura y de la acción protectora de la Seguridad Social, Article 3 (BOE of 1 August 1985, No 183, p. 1907); that legislation was subsequently incorporated, with minor formal amendments, in Articles 140(4), 162(1) and 163 of the Texto Refundido de la Ley General de la Seguridad Social (cited above at footnote 7). Under the system predating the entry into force of the Ley 261/1985, it was up to the worker to choose an uninterrupted period of 24 months during the 7 years preceding materialisation of the risk; the basic amount of the benefit was calculated by dividing by 28 the sum total of the contribution bases of the person concerned during that period (see Decreto 1646/1972, de 23 de junio, para la aplicación de la Ley 241/1972, de 21 de junio, en materia de prestaciones del Régimen General de la Seguridad Social, Article 7(1) (BOE of 28 June 1972)).

(10) - For a full list of such conventions (updated to 12 March 1997), see Memento práctico Social 1997. Derecho laboral, seguridad social, Madrid, 1997, pp. 418 and 419.

(11) - See BOE of 28 October 1977, No 258, p. 2295, and Bundesgesetzblatt, 1977, II, p. 687.

(12) - See below, footnotes 13 and 14 and the parts of the text to which they relate. Article 25(1)(b) of the Convention, cited below in the body of this Opinion, provides as follows in the original: `Cuando todo o parte del período de cotización elegido por el soliciante para el cálculo de su base reguladora de prestaciones se hubiera cumplido en la República Federal, el Organismo competente español determinará dicha base reguladora sobre las bases de cotización vigentes en España, durante dicho período o fracción, para los trabajadores de la misma categoría profesional que la persona interesada.' The provision in the rule just cited for the worker to choose the period of contribution for the calculation of his own basic amount - an option which the Spanish social security legislation in force does not offer - can obviously be explained by the history of the social security system in force in Spain at the time when the Convention was concluded (see above, footnote 9).

(13) - See Case 82/72 Walder [1973] ECR 599, paragraphs 6 and 7.

(14) - With the exception - for the purposes of this Opinion - of the `international provisions not affected by this Regulation' mentioned in Article 7 of the Regulation, including the specific provisions of social security conventions which `the provisions of Article 6 notwithstanding ... continue to apply' where they are the subject of an express reservation mentioned in Annex III to the Regulation itself (see Article 7(2)(c)).

(15) - Article 46(2) of the Regulation, which is the provision applicable where the conditions laid down by the legislation of a Member State for the acquisition of the right to benefits are met only after application of Article 45, provides as follows: `(a) the competent institution shall calculate the theoretical amount of the benefit to which the persons concerned could lay claim provided all periods of insurance and/or of residence, which have been completed under the legislations of the Member States to which the employed person or self-employed person was subject, have been completed in the State in question under the legislation which it administers on the date of the award of the benefit. If, under this legislation, the amount of the benefit is independent of the duration of the periods completed, the amount shall be regarded as being the theoretical amount referred to in this paragraph.'

(16) - See Article 26 and Chapter VIII of Annex I to the Act of Accession, cited above at footnote 2.

(17) - According to the Court, the new provisions inserted by Regulation No 1248/92 in Heading D, paragraph 4, of Annex VI to the Regulation are confined to clarifying, without altering, the content of Article 47(1)(g) thereof, and `are intended only to ensure the compatibility thereof with the principles set out in Article 51 of the Treaty' (see Case C-251/94, cited above at footnote 1, paragraph 42, and Joined Cases C-31/96 to C-33/96, cited above ibidem, paragraph 24). The need to specify the methods of applying Article 47 of the Regulation for Spain is, moreover, explicitly mentioned in the preamble to Regulation No 1248/92 (see the thirty-second recital). Note that subparagraph (b) of paragraph 4, cited above, was amended by Council Regulation (EC) No 1223/98 of 4 June 1998 amending Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community and Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71 (OJ 1998 L 168, p. 1; see below, point 21).

(18) - Mr Lafuente Nieto was employed in Spain (until 1969) and then in Germany (until July 1990), where he became wholly and permanently incapacitated for work. The competent social security institution calculated the amount of the contested pension as if contributions had been paid on the minimum basis for the years in which he had worked and paid contributions in Germany (that is to say, for the whole of the reference period for the purposes of the calculation of the basic amount), taking the view that during that period he was under no obligation to pay social security contributions (see above, point 3). However, Mr Lafuente Nieto argued that the quotient for the calculation of the Spanish pension should have taken account of the contribution bases used to calculate the contributions paid in Germany during the period immediately preceding materialisation of his invalidity, provided those contribution bases did not exceed the maximum applicable in Spain during that period, and calculating the minimum contribution basis only for the months when he did not pay contributions in Germany. I would point out, in passing, that the fact that this case concerns a different benefit (Spanish old-age pension) from that at issue in Lafuente Nieto does not mean that this precedent is irrelevant in the present context. Under Article 40(1) of the Regulation, the provisions of Title III, Chapter 3, of the Regulation laying down specific provisions concerning old-age pensions and death are to be applied by analogy to workers who become incapacitated and who - like Mr Lafuente Nieto - have been successively subject to the legislation of two or more Member States, at least one of which is based on a distributive model of insurance (such as the Spanish system).

(19) - The Court thus dismissed the plaintiff's arguments that the method for calculating invalidity benefits under Spanish law falls within the rule in Article 47(1)(b) of the Regulation which applies where, under the national legislation: (i) benefits are calculated on the basis of the amount of earnings, contributions or increments and (ii) the periods of insurance or residence completed in another Member State. As the Court rightly pointed out, under the Spanish social security system calculation of the benefits is not based on the amount of earnings, contributions or increases received by the worker concerned during the whole of the insurance or residence periods completed by him (see Case C-251/94, cited above at footnote 1, paragraph 21). The Court also rejected the Commission's argument that the rules in Article 47(1)(e) do not apply to the Spanish legislation. The Commission had pointed out that the provision in question laid down specific rules valid only in the circumstances expressly contemplated thereby, while it is still possible for national social security schemes not contemplated by any of the rules to exist (see Case 181/83 Weber [1984] ECR 4007); further, as confirmed by the Court in Case C-406/93 Reichling [1994] ECR I-4061, Article 46(2)(a) of the Regulation (see above, footnote 13) provides that, in the calculation of the theoretical amount of benefit, account must be taken of the earnings of the worker when the risk materialised in another Member State. Dismissing that argument, the Court pointed out, first, that the circumstances in which the rule in Article 47(1)(e) was inserted into the Regulation `indicate that it was intended precisely to cover a system of calculating invalidity benefits such as that laid down by the Spanish legislation, which effectively provides that, unless specified otherwise, benefits are to be calculated on the basis of average contributions' (ibid., paragraph 23). Second, the Court found that the additions made by Regulation No 1248/92 (see above, paragraph 9) to Annex VI to the Regulation, even if they entered into force after the events in issue in that case, confirmed the fact that Article 47(1) `which refers precisely to the calculation of the theoretical amount of the benefit, contains rules which concern the Spanish legislation' (ibid., paragraph 28).

(20) - See above, footnote 18.

(21) - As I observed in paragraph 22 of my Opinion in Joined Cases C-31/96 to C-33/96 (cited above at footnote 5): `Account must be taken of the wage disparities still existing between the Member States (in our case, between Spain and Germany). Article 47(1)(e) (now (g)) cannot therefore be interpreted as meaning that, when trying to match a social security benefit to the earning capacity of a worker in the period immediately prior to the materialisation of the risk, the theoretical amount should be calculated by reference to the contribution bases of the person concerned in the last 96 months of employment, even where this was pursued in a different Member State, where wages are higher than in the country of origin. If this were the case migrant workers would have an advantage over non-migrant workers.'

(22)- In other words, and in line with my argument in the Opinion in Case C-251/94 (cited above at footnote 5), paragraph 40 of the judgment provides that it is the `amount [of contributions paid] [which] must be updated and revalorised so as to correspond with what the person concerned would have paid had he continued to work under the same conditions in the Member State in question (emphasis added). That statement follows on from paragraph 39, according to which, in order to guarantee a migrant worker in the same situation as Mr Lafuente Nieto social security benefits which are not less than he would have received if he had not emigrated, his average basis for contributions must be `the same for [him] as if he had remained under the obligation to pay contributions under the legislation concerned.'

(23)- Sala 4a, Ar. 2560.

(24)- See the circular of the INSS of 20 July 1992 (cited by A. Desdentado Bonete, La Seguridad Social de los trabajadores migrantes de la Unión European en la unificación de doctrina, in Noticias de la Unión Europea, No 157, 1998, p. 95, footnote 26), in which the social security institution laid down the monthly bases to be taken into account for the period from 1936 to June 1963, in place of the historical bases for those concerned for which there was no longer any means of proof or with reference to contribution periods during which the insurance system in force provided for bases or quotas of a different nature from those used currently. The tenor of that document (a copy of which the plaintiff in this case appended to his own written observations before the Court) gives rise to doubts over the accuracy of the Spanish Government's statement in its written replies of 10 June 1998 to one of the specific questions put to it by the Court under the second paragraph of Article 21 of the EEC Statute of the Court (`las bases de cotización reales de los trabajadores se conocen siempre, aún cuando correspondan a períodos muy lejanos').

(25)- As the Spanish Government in its written replies (see above, footnote 24) and the national court point out, in the period from 1944 to 1958, characterised by a strict incomes policy which allowed the two social partners no room for contractual independence, social security contributions reflected salaries fixed by law, according to branch of activity and professional category. Subsequently, from the time of the Ley de Convenios Colectivos of April 1958, the tendency for contributions to reflect actual wages disappeared because, whilst wages could be subject to increases negotiated by collective bargaining, contributions were still linked to the minimum wage. Following the 1963 reform which introduced a general minimum wage, the Spanish legislature - in order to halt the progressive decline in standards of social protection caused by the disparity between actual salaries and notional salaries for the purposes of contributions - established a tariff of uniform bases for each professional category not linked to the actual wages of individual workers and subject to periodic revision. A mixed system of tariff bases and supplementary individual bases (as a percentage of the former) was introduced in 1972 in order gradually to bring contributions into line with actual wages. And it is only since 1979 that Spanish law has used the current system of contributions calculated on the basis of actual total pay, subject to minimum and maximum limits. See also M.A. Olea-J.L. Tortuero Plaza, Instituciones de Seguridad Social, Madrid, 1992 (13th edition, revised), pp. 449 and 450.

(26)- See Desdentado Bonete (op. cit. supra, footnote 24), p. 95, footnote 29 (with reference to L.E. de la Villa-A. Desadentado Bonete, Informe sobre la reforma del sistema español de la Seguridad Social, Madrid, 1983, pp. 94 to 98). Note, incidentally, that the author is the Magistrado of the Tribunal Supremo who drafted the order for reference in the main proceedings.

(27)- Law No 26 of 1985 provides: `Las pensiones que se causen con aplicación de las modificaciones introducidas en la presente Ley, serán revalorizadas al comienzo de cada año' (Article 4); the fact remains that `las deviaciones que pudieran producirse, sobre las previsiones de inflación para cada año (...), serán tenidas en cuenta en el año siguiente para mejorar todas las pensiones del sistema que sean inferiores al salario mínimo interprofesional' (fifth additional provision). As regards the frequency of revalorisations of pensions, decreed by ordenes ministeriales from 1956 - after an interval of eight years before the second (in 1964) - they occurred every two years from 1964 to 1970, and annually thereafter (except in 1976 and 1978 when revalorisation took place twice a year): see A. Desdentado Bonete-B. Fernández Fernández-E. González-Sancho López, La reforma de las pensiones de la Seguridad Social, Madrid, 1986, p. 128.

(28)- However, following the entry into force of Council Regulation No 1248/92 (cited above, footnote 3), subparagraph (e) of Article 47(1), although renumbered subparagraph (g), was left unchanged.

(29)- My translation (as are subsequent quotations from this document).

(30)- See, in particular, the judgment cited above at footnote 23 and the relevant part of the text.

(31)- The plaintiffs in Joined Cases C-31/96, C-32/96 and C-33/96 were all Spanish nationals who, having been employed in Spain for some years, emigrated to Germany, where their working life came to an end. As they had exercised their right to freedom of movement before 1 January 1986, the Court, following my Opinion of 17 June 1997 on this point (cited above, footnote 5, paragraph 32), held that the principles it had laid down in Rönfeldt (Case C-227/89 [1991] ECR I-323) and Thévenon (Case C-475/93 [1995] ECR I-3813) were applicable to workers in the position of Mr Naranjo Arjona, Mr Vicente Mateos and Mrs García Lázaro. According to that case-law, the Community rules on social security cannot be applied in such a way as to reduce the benefits due to a migrant worker under the law of a Member State, because, if that were the case, the objectives of the Treaty provisions on freedom of movement for workers would be frustrated. That principle is also applicable to benefits which may be payable under bilateral or multilateral conventions between Member States incorporated into their national law, provided that the worker concerned exercised his right to freedom of movement at a time before the Community legislation came into force, as a result of subsequent accessions to the Community or otherwise, in all the Member States signatory to the relevant convention in which he had completed periods of contribution. The Court held that it could not be ruled out that application of the provision contained in Article 25(1)(b) of the Convention (see above, footnote 12) might result in more favourable treatment for the plaintiffs than that provided for by the Regulation and concluded that it was for the national court to ascertain whether that was the case.

(32)- See inter alia Case C-12/93 Drake [1994] ECR I-4337, paragraph 22.

(33)- See Case 69/79 Jordens-Vosters [1980] ECR 75, paragraph 11.

(34)- See inter alia Case 41/84 Pinna [1980] ECR 1, paragraph 23.

(35)- See inter alia Case 810/79 berschär [1980] ECR 2747, paragraph 16. See also the recent judgment in Case C-394/96 Brown [1998] ECR I-4224, paragraph 30, on the subject of equal treatment for men and women.

(36)- See Desdentado Bonete (op. cit. above, footnote 24), page 91, footnote 11.

(37)- See Case 20/85 Roviello [1988] ECR 2805, paragraph 16.

(38)- See above, footnote 25, and the relevant section of the text.

(39)- See Desdentado Bonete (op. cit. above, footnote 24), page 95.

(40)- The `replacement' bases fixed in 1992 by the INSS in the circular cited above cannot of course be considered to be such (see above, footnote 24 and relevant section of text).

(41)- I would point out, for instance, that in the written replies of the Spanish Government (see above, footnote 24) reference is made to the individual employment card (cartilla del trabajador), which workers were obliged to hold and keep up to date in order to provide evidence of the professional category to which they belonged (and thus, before 1963, of the relevant uniform contribution basis). That document had to contain a chronological record of a worker's employers and his professional category in each successive job. If a cartilla were lost the Spanish social security institutions would accept any other means of proof, such as production of wage slips or salary statements. As regards the determination of contribution bases according to category, introduced by the legislature in 1963, the Spanish authorities state that such bases were published annually in the BOE.

(42)- See above, footnote 22 and relevant section of the text.

(43)- See inter alia Case 733/79 Laterza [1980] ECR 1915, paragraph 8, and Case C-146/93 McLachlan [1994] ECR I-3229, paragraph 29.

(44)- See Case 313/86 Lenoir v Caisse d'allocations familiales des Alpes-Maritimes [1988] ECR 5391, paragraph 13.

(45)- On the other hand, it can be seen that the financing of the Spanish social security system through taxation generally, which in 1990 covered approximately 30% of social security expenditure (compared with 4% in 1976), served from 1986 onwards essentially to support the cost of minimum (non-contributory) pensions and of benefits paid by sickness insurance (see Commission of the European Communities, La protección social en Europa, Luxembourg, 1994, p. 28).

(46)- Under the German legislation, the amount of the old-age pension (Altersrente) depends on: (i) the individual basis of calculation (that is to say, the relation between the annual income of the person concerned and the average incomes of all the insured in the reference year); (ii) the general basis of calculation, fixed by law on the basis of the average annual income of all the insured and subject to annual alignment with salary increases; (iii) the number of annual insurance periods completed by the worker (including any substitute periods (Ersatzzeiten, during which there is no obligation to contribute, for example, during military service or whilst rearing children) as well as possible periods of interruption (Ausfallszeiten) and additional periods (Zurechnungszeiten), during which the insured was unfit to work or otherwise prevented from working), and (iv) a fixed multiplier. See D. Pieters in Social Security Law in the Fifteen Member States of the European Union, Antwerpen-Apeldoorn, 1997, p. 118, and Administrative Commission of the European Communities on Social Security for Migrant Workers, Social security for migrant workers. Guide No 1. F.R. of Germany, Luxembourg, 1975, pp. 48 and 49.

(47)- See Case 41/72 Getreide-Import [1973] ECR 1, paragraph 5, and Case 158/80 Rewe [1981] ECR 1805, paragraphs 19 to 27. It has been observed that such a solution can be justified on the ground that the principle of legality is a matter of public policy and implies that the Court can consider of its own motion any other matters liable to affect the validity of the act in issue, albeit solely on the basis of the documents on the court file (see J. Boulois, Appréciation de validité (Renvoi en), in C. Gavalda-R. Kovar (dir.), Répertoire de droit communautaire Dalloz, Paris, 1992- (and loose-leaf edition, April 1992), Volume I, paragraph 52). The Court has also stated that `If it appears that the real purpose of the questions submitted by a national court is concerned rather with the validity of Community measures than with their interpretation, it is appropriate for the Court to inform the national court at once of its view without compelling the national court to comply with purely formal requirements which would uselessly prolong the procedure under Article 177 and would be contrary to its very nature. Although this type of strict adherence to formal requirements may be defended in the case of litigation between two parties whose mutual rights must be subject to strict rules, it would be inappropriate to the special field of judicial cooperation under Article 177 which requires the national court and the Court of Justice, both keeping within their respective jurisdiction, and with the aim of ensuring that Community law is applied in a unified manner, to make direct and complementary contributions to the working out of a decision.' (See Case 16/65 C. Schwarze [1965] ECR , in particular, p. 886; see also Case 145/79 Roquette Frères [1980] ECR 2917, paragraph 7)). The Court has thus not baulked at declaring an instrument invalid of its own motion when it was only required to interpret it (see Case 62/76 Strehl [1977] ECR 211, paragraphs 10 to 18).

(48)- See Lafuente Nieto (cited above at footnote 1, paragraphs 41 and 42,) and Naranjo Arjona (cited ibidem, paragraphs 23 and 24).

(49)- See Regulation No 1223/98 (cited above, footnote 17), eighth recital.

(50)- See above, footnote 17 and related section of text.

(51)- See above, footnote 31 and related section of text.

(52)- See Naranjo Arjona (cited above, footnote 1), paragraph 29.