SPECIAL FEATURE - No 7 (April 97)

HOW TO IMPROVE FREE MOVEMENT OF PEOPLE? The suggestions of the High Level Panel

A series of measures to ensure that more people can take advantage of their rights to free movement within the EU have been suggested by the High Level Panel on the free movement of persons chaired by Mrs Simone Veil in a report submitted to the Commission on 18 March 1997. The Panel, set up by the Commission in January 1996, held a series of hearings and received a large number of contributions from individuals and organisations.

The Panel's main conclusion was that, apart from a few exceptions, the legislative framework to ensure free movement of people is in place, and that the majority of individual problems can be solved without changes in legislation. However, the Panel particularly emphasised the need for Member States to improve co-operation among themselves, notably in border regions, to ensure better training of officials and to devote more attention to the protection of individual rights. The report includes 80 recommendations to make it easier for people to use their rights in practice, which include:

• better information to raise people's awareness of their rights;
• a new type of residence card for people temporarily in another Member State;
• more flexible interpretation by Member States of rules on residence requirements;
• easier access to employment in other Member States;
• a narrower definition of public service posts reserved for Member States' own nationals;
• a need to modernise social rights (regulation 1408/71);
• more flexible rules to allow regrouping of families and partners;
• more emphasis on language training and the promotion of cultural exchanges;
• greater equality in tax treatment;
• improving the situation of legally resident third country nationals;
• new means of redress for individuals with problems applying their rights and improved access to existing channels;
• a single Commissioner responsible for free movement of persons.

The Commission will reflect on how best to follow-up the Panel's recommendations, in the framework of the Single Market Action Plan currently being drafted for the Amsterdam European Council in June.

The Panel's recommendations concentrate on the rights and responsibilities of European citizenship. On the one hand, European citizenship does not give rise to unrestricted rights. For example, people wishing to reside in another Member State must demonstrate that they have sufficient resources to support themselves and proper health cover. It would be unrealistic to propose that social assistance benefits, in addition to social security, could be exported.

On the other hand, the Panel does recommend protecting some acquired rights to retain residence in another EU country and to extend residence rights for family members. It also seeks to extend the benefits of existing harmonisation efforts on social security to third country nationals legally resident in the EU.

The main recommendations of the report are as follows :

1. Information about and for people moving around the Union should be improved

The number of EU nationals resident in another Member State is only 5.5 million out of 370 million, compared with 12.5 million third country nationals. But statistics are certainly incomplete and do not allow for sufficient analysis of trends in migration on which to base policy. Influences on free movement include high unemployment, the changing role of the family, the growth in the services sector and the ageing of the population. The Panel welcomes the impressive results so far from the Citizens First campaign, with requests for information for guides and fact sheets from over 450,000 people. This campaign should be put on a permanent basis. It is also a way of finding out more about people's problems and where there are gaps in EU legislation or where it is not being properly understood or enforced.

2. A new optional one year residence card should be introduced

The Panel recommends a new card for EU citizens staying more than three months but less than a year in another Member State. This would be the first genuinely European card, issued by the Member State of origin, stating that the holder is covered by health insurance and has sufficient resources to cover his or her needs. This card would be optional. It would clarify for authorities in other Member States the rights of European citizens who are neither tourists nor seeking to establish themselves, that is students and trainees on exchange programmes, volunteers and artists. It would not give card-holders rights in other Member States, except for social security coverage for emergency health care for the duration of their stay.

3. Free movement rights must be brought in line with the new concept of European citizenship

Excessive delays and costs which discriminate against EU citizens from other Member States must be eliminated. Issuing temporary residence cards which limit access to social rights and therefore to acquiring a permanent right to stay, should be discouraged. The requirement to provide proof of sufficient resources should be made more flexible. A declaration of having sufficient resources, as in the case of students, could be sufficient. Failure to renew a residence card must not lead to threats of expulsion. The Panel is also concerned about self-employed people having fewer rights to stay in their country of residence if they lose their business than redundant workers. It is difficult to justify such treatment since the introduction of European citizenship. A piecemeal sectoral approach to residence rights should be replaced by consolidated legislation treating all European citizens as equal.

4. Access to employment in other Member States must be facilitated

The Panel sees great potential in the development of EURES (European Employment Services) and proposes to extend its role to reach more citizens with more job offers across borders. It took a long time for the Community to adopt separate Directives for the recognition of qualifications of seven main regulated professions, but these work well (with the exception of diplomas acquired outside the Community which may be recognised by one Member State but not by another). Other professions come under the general system of recognition of diplomas based, not on harmonisation, but on mutual trust among Member States, which may impose additional requirements on applicants (some 5% of cases in practice). Under such a system, people need the kind of information provided by the Citizens First guides and fact sheets as to their rights, whilst mutual trust must be reinforced through co-operation among professional bodies and Member States authorities responsible for processing applications.

The Panel recommends rapid adoption by the Council of the lawyers Directive, a new departure in this field. Success in recognising professional qualifications and diplomas must not hide the urgent need to develop European solutions - possibly through general legislation recognising what is most important to many more people, namely professional experience, and ensuring that periods of working abroad in the EU are not detrimental to one's career.

5. Employment in the public sector should be opened up

In terms of the EC Treaty (Article 48 (4)) Member States may reserve certain posts for their own nationals. Despite the extensive case-law of the Court of Justice, there is little to encourage the free movement of civil servants which will allow national administrations to learn from each other. The public sector will remain relatively closed as long as there is no agreement as to what constitutes a reserved post for a Member State's own nationals, and which State activities should be open to nationals from other Member States. The Panel recommands that the Commission should propose such an agreement to the Council. It should also act in order to ensure that the principle of mutual recognition is respected within the public sector.

6. Social rights need modernising, particularly for pensioners

The report finds that the mechanisms for co-ordinating Member States' social security schemes in order to allow for free movement still work well (Regulation 1408/71). There are areas where modernisation is necessary. In an earlier opinion (presented on 28November 1996 - see SMN N. 6), the Panel already proposed solutions to allow people to preserve their acquired rights to private supplementary pensions when working in different Member States. Furthermore, with pension arrangements becoming more complex, the fact that pre-retirement benefits cannot be exported to other Member States is a gap in the rules which must be filled. It is regrettable that the Council has still not adopted proposals made 12 years ago by the Commission, which raises the question of whether unanimity should still allow Member States to block all progress in this field. The Panel would also like to see a study of the possibility of extending the three month period during which it is possible to export unemployment benefit to seek a job in another Member State. The Panel's report underlines that the social security provisions not only concern people permanently working, living or retiring to other Member States, but also tourists, students or elderly people on short stays abroad, whose interests as European citizens could be taken into account to a geater extent. In particular, information for the public about health coverage with a multitude of different paper forms (E111, E112, etc.) should be simplified through the development of interoperable "smart" national social security cards. The Panel also recommends that in special circumstances, particularly in frontier regions, there should be some relaxation of limiting cross-frontier health care to emergency treatment.

7. Family rights should be amended to reflect social change

Freedom of movement is not complete unless citizens have the right to be joined by their family. The appropriate Regulation (EEC/1612/68) provides that irrespective of nationality, the worker may be joined by his or her spouse, their children under the age of 21 and their parents. This definition of the family dependants has been carried over to the legislation on self-employed people, and other categories of the population. The report recommends filling two main gaps to allow families to remain together :

• There are no valid grounds for denying non-dependent children more than 21 years old, or relatives in the ascending line who are not dependent, the right to join their family in another Member State.

• The term "spouse" does not include an unmarried partner, which can give rise to problems. The report points out that the "family group" is undergoing rapid change and that growing numbers of people, often with children, form de facto couples. It recommends, on the basis of the case-law of the European Court, that if a Member State grants rights to its own unmarried nationals living together, it must grant the same rights to nationals of other Member States, and that a study should be made of practice in the Union.

8. More emphasis on language training and promote cultural exchanges

The addition in the Maastricht Treaty of new articles on culture, youth, vocational training and economic and social cohesion, give free movement of people, like European citizenship, more of a human and less purely economic dimension. The Panel's report reviews the contribution made by exchange programmes such as LEONARDO (training), SOCRATES (education) or KALEIDOSCOPE (culture) to free movement and the integration of people in other Member States. It notes that the only legislative requirement in this area - to teach languages to the children of migrant works - is not sufficiently applied. For the Panel, access to language skills in a multilingual Union is not just the key to removing barriers to free movement and helping migrants and their families to settle in their adopted country. It is also the key, rather than cultural policy as such, to increasing cultural exchanges. The report also underlines that promoting exchanges through EU educational training and youth programmes will not be effective if beneficiaries of European programmes then run into difficulties acquiring residence in other Member States. The new optional one-year residence card recommended above is one way to increase freedom to learn from different European cultures.

9. Greater equality of tax treatment can be achieved

People taking advantage of free movement rights are faced with the paradox that whereas cross-border social security rights are governed by Community regulation, tax is governed by bilateral agreements. The two overlap and inconsistencies have to be reduced. Some gaps in bilateral agreements relating to double taxation have to be filled; the Panel's report also hints at the possibility of Single Market legal basis to eliminate tax barriers, and at any rate to improve co-ordination among Member States. The Panel recommends adopting a common definition of residence for tax purposes. Individuals carrying out a professional activity in another Member State are frequently subject to a higher level of taxation than individuals in their country of residence. The report recommends "to draw up binding Community legislation governing the taxation of frontier workers and other persons who are non-resident for tax purposes with a view to ensuring non-discriminatory taxation for such individuals." In cross-frontier situations, equality of treatment has also to be safeguarded with regard to taxing persons, special tax deductions or concessions.

Particularly in parts of the Union where there are wide tax disparities each side of the border, the Panel found problems with company cars for frontier workers, or for people moving with their car to other Member States. Arrangements are necessary to avoid double taxation and for Member States to share revenue from vehicle registration tax on a pro-rata basis.

10. The situation of legally resident third country nationals can be improved

The most important recommendation of the Panel's report in this respect is that consideration should be given to extending certain provisions of Regulation 1408/71 on the co-ordination of social security to legally resident third country nationals. This would also make life easier for national administrations which have to apply an EU regime to EU nationals and bilateral arrangements to third country nationals. Concerning family members of a Union citizen, their status should be the same regardless of whether they are citizens of Member States or of third countries. The Panel want to see the abolition of visa requirements, at least for those third country nationals members of the family of EU citizens. The Panel also recommends extending to third country nationals the recognition of a right for non-dependent children and parents to join their family in another Member State, subject to the condition that the family group was already formed in the home Member State. Similarly, it is recommended that family members of all Union citizens should be able to take up an activity as self-employed and not just as employed workers, and that a right of residence be recognised for a divorced spouse who is a third country national.

11. Better protection of the rights of individuals can be assured

The Panel's report places strong emphasis on making people more aware of their rights through campaigns such as Citizens First, and a possible new right to information in a revised Treaty. The key issue is that better protection of citizens' rights lies in action at the level of Member States. Information about legal remedies is improving, but to whom do citizens' turn to protect their rights? The Panel would like to see focal points, providing information and active conciliation in Member States to solve problems when and where they occur. The report places emphasis on developing EU training programmes in this area, starting with the legal profession, but also including associations and informal advice services, and officials in Member States applying Community law on free movement. The report recommends that the Commission should be more accountable to individual complainants and supports the work of the Ombudsman, the Petitions Committee and individual MEPs.

12. Free movement of people should come under the responsibility of a single Commissioner

The report recommends that "in order to remedy the division of responsibilities in the area of free movement of persons within the Commission, it is suggested bringing under a single Commissioner responsible for questions of free movement of persons, all the services currently dealing with those questions, including the treatment of complaints brought by individuals, giving both outside and inside the Commission a central point which is currently lacking."

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