Free Movement of Services and Social Security—Quo Vadis?
| DOI | http://doi.org/10.1111/1468-0386.00164 |
| Date | 01 December 2002 |
| Author | Maximilian Fuchs |
| Published date | 01 December 2002 |
Free Movement of Services and Social
SecurityÐQuo Vadis?
Maximilian Fuchs*
Abstract: Dental treatment (of Aline Kohll) and a pair of spectacles (for Nicolas
Decker) recently drew public attention throughout the whole of Europe. It is certainly
true that the reactions following the Court of Justice's judgements in both cases were
not only to be felt in the profession but in the general public most especially in political
circles. Some authors even went as far as to place these judgements on a par with those
in the Costa/ENEL and Cassis de Dijon cases. In the meantime these decisions have
persistently been upheld by two further judgements (Vanbraekel and Smits/Peer-
booms). The essence of the judgements lies in the observation that the Member
States must respect an insured person's right to freedom of services despite being
entitled to organise their own social security services. The following article is a critical
analysis of this approach. The author pleads for a solution to the problems to be found
within the ambit of the rules and principles of coordination whose further development
he calls for.
I Introduction
The very core of the common or internal market was and is the guarantee of the four
fundamental freedoms. To ensure the freedom of movement of goods, persons,
services and capital (Article 14(2) EC) is the conditio sine qua non of the economic
integration of Europe. The legal basis for the fundamental freedoms follows a clear-
cut economic model. All the Member States of the European Union are based on
market economies. Thus the functioning of market principles should also be guaran-
teed across frontiers on a European level. The fundamental freedoms constitute the
legal framework for the realisation of this goal. For this reason they are also referred
to as market freedoms.
1
The implementation of the market freedoms was by no means an easy undertaking.
Even though the national economies respected the market principle in their own
territories and had even legally guaranteed them, they were not equally willing to
promote market principles across borders in the same way. All too frequently,
protectionist measures to safeguard national markets were taken. In this situation a
pioneering role fell to the European Court of Justice in the implementation of the
European Law Journal, Vol. 8, No. 4, December 2002, pp. 536±555.
#Blackwell Publishers Ltd. 2002, 108 Cowley Road, Oxford OX4 1JF, UK
and 350 Main Street, Malden, MA 02148, USA
* Professor of Civil Law, German and European Labour and Social Law, Catholic University of Eichsta
Ètt-
Ingolstadt.
1
On market freedoms as central pillars of the internal market see M. Herdegen, Europarecht 3rd edn (C. H.
Beck, 2001), para. 281.
fundamental freedoms.
2
The Court of Justice unfalteringly interpreted these freedoms
extensively,
3
which was not always welcomed by the member states.
4
This is also true, or rather especially so, for the area of freedom to provide services.
5
It may be said that, in contrast to the other three fundamental freedoms, the freedom
to provide services was perhaps in a particularly dicult position because services were
often provided by self-employed professionals or craftsmen whose practices were
usually strictly regulated under national law. The cross-border oer of services, even
those linked with an establishment in a foreign member state, was met by restrictive
behaviour on the part of the Member States. With this in mind, it is even more
astonishing that the Court of Justice enabled the eective validation of the freedom to
provide services with such determination and foresight.
6
The eorts of the Commis-
sion towards the completion of the internal market which have led to the passing of
numerous directives generally abolishing restrictions as well as sectionally liberalising
directives in various sectors
7
are not to be underestimated either, especially since the
publication of the White Paper.
8
While an ever wider range of services have been encompassed in the realisation of a
comprehensively understood freedom to provide services, the sector of social security
seemed to remain virtually untouched by this; despite social security constituting one
of the biggest service sectors in almost all Member States.
9
Nevertheless, the almost
total exclusion of social security from the eorts towards the realisation of Article 49
EC seemed consistent. Due to legal provisions, social security in the Member States
was either not at all, or only to a limited extent, organised under market principles.
The simplest explanation for this maintained that social security is not provided for
remuneration but rather more for the realisation of solidarity and its bene®ts are
therefore in principle not traded goods.
10
The Court of Justice has broken with this
idea in several judgements in the last few years. It is true that the judgements have been
limited to a few partial problem areas up to now. However, the tendency to measure at
least partial areas of social security in terms of freedom of services is clearly evident.
The reactions to these judgements, whether favourable or not, show that a question of
December 2002 Free Movement of Services and Social Security
#Blackwell Publishers Ltd. 2002 537
2
For a brief discussion of this role of the Court of Justice, see M. Shapiro, `The European Court of
Justice', in P. Craig and G. de Bu
Ârca (eds), The Evolution of EU Law, (Oxford University Press, 1999), at
321±347.
3
See J. H. H. Weiler, `The Constitution of the Common Market Place: Text and Context in the Evolution
of the Free Movement of Goods', in P. Craig and G. de Bu
Ârca (eds.), op. cit. note 2 supra, at 349±376.
4
The whole panorama of problems is presented by H. Rasmussen, European Court of Justice, (GadJura,
1998), passim.
5
See S. O'Leary, `The Free Movement of Persons and Services', in P. Craig and G. de Bu
Ârca (eds.), op. cit.
note 2 supra, at 377±416.
6
A very important widening of the concept of freedom of services by the Court of Justice is the
jurisprudenceÐbegun with the Case C-113/89 Rush Portuguesa [1990] ECR I-1417Ðaccording to
which Articles 49 and 50 EC confer the right upon employers to use their own workforce for services
abroad, see for this settled case law C. Barnard, EC Employment Law, 2nd edn, (Oxford University Press,
2000) at 170.
7
See W. Hakenberg Introduction to Articles 49±55, para. 2 and Annex to Articles 43±45, in Lenz, EGV-
Kommentar 2nd edn (Bundesanzeiger, 1999)
8
Completing the Internal Market, COM(85)310.
9
For statistical references see German Ministry of Labour and Social Order, EUROATLAS. Soziale
Sicherheit im Vergleich (Bonn, 1998), at 14.
10
Therefore we face similar problems in regard to the application of EU Competition Law, see for example
J. Nickless, The Consequence of European Competition Law for Social Health Care Providers (Maklu,
1998).
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