Towards a European social contract through judicial activism?

Academic Article

Abstract: This article examines the evolution of the case law of the European Court of Justice on EU citizenship, which has been crucial in giving substance to the Treaty’s provisions. It argues that there has been a certain amount of judicial activism in conferring ever more rights to EU citizens, and not only to workers, thus challenging the economic paradigm of EU integration. Moreover, as the cross-border element has become less important, even non-migrant EU citizens have been affected. However, perfect assimilation has not been achieved, disproving critics who see the case law as a nation-building exercise or as building a social Europe from the top-down.

When the Treaty of Maastricht introduced Union citizenship, it was at first not clear whether this would add anything new in terms of citizens’ rights. However, in an increasingly sophisticated case-law, the European Court of Justice ‘has given citizenship a content going beyond the express Treaty provisions’ (Jacobs 2007: 591) – linking it to free movement, the prohibition of discrimination on grounds of nationality and the protection of fundamental rights. The major legal instrument in this development was the combination of Union citizenship (Art. 17 and 18 EC) and prohibition of discrimination on grounds of nationality (Art. 12 EC), which helped widening the personal and material scope of the Treaty. It was Advocate General Leger who first expressed in 1996 what could be termed a ‘perfect assimilation approach’ (Barnard 2007: 437) in his Opinion in Boukhalfa v. Germany[1][2]: ‘it is for the Court to ensure that [Union citizenship's] full scope is attained […] the concept should lead to citizens of the Union being treated absolutely equally, irrespective of their nationality’ (para 63). As will be shown, the European Court of Justice has interpreted freedom of movement for Union citizens as a quasi-constitutional entitlement and not simply as a direct economic imperative. This view explains the link established to the right of migrant citizens not to be discriminated against by comparison with host-state nationals – ‘regardless of whether these citizens qualified as a protected economic agent under any other provision of the Treaty’ (Halberstam 2005: 784). Citizenship provided an opportunity for the Court to adopt a unified approach to the judicial protection of all migrant EU citizens, and thereby to add something new to the pre-existing entitlements of workers, self-employed, service-recipients, students and those with sufficient means to support themselves (Dougan 2006: 613). The case-law on citizenship now even touches upon what would previously have been judged to be internal situations, posing the question whether EU citizenship indeed has significance for every EU citizen, including the large proportion of non-migrants. This jurisprudential development has not come without criticism. Beyond arguments about the consistency of the Court’s case-law, the main argument concerns judicial activism in the field of citizenship and a competence creep leading towards a social Europe created by the judges of the ECJ (Reich/Harbacevica 2003; Hailbronner 2005).

It is therefore interesting to examine whether the Court has indeed adopted a perfect assimilation approach or a more cautious one. I will argue that the Court’s broadening of the personal and material scope of the rights conferred by the Treaty through its citizenship provisions does not equal ‘freedom from second-class status’ (Halberstam 2005: 784). There are still limits to the equal treatment of Union citizens living in another Member State than their own. The Court has instead adopted an ‘incremental’ (Barnard 2007: 437) or ‘gradual’ (Weiss/Wooldridge 2007: 174) and individual approach: the more long-standing the integration into the host society is, the more benefits an EU citizen may legitimately expect to be granted. As will be shown below, the Court only assumes a ‘certain degree’ of financial solidarity among Union citizens and insufficient resources may in its view justify expulsion. While citizenship has helped to assimilate the situation of the economically active and non-economically active migrant EU citizens (and their families) enjoying lawful residence, the distinction has not disappeared. 

…the European Court of Justice has interpreted freedom of movement for Union citizens as a quasi-constitutional entitlement and not simply as a direct economic imperative. This view explains the link established to the right of migrant citizens not to be discriminated against by comparison with host-state nationals – ‘regardless of whether these citizens qualified as a protected economic agent under any other provision of the Treaty’

There are various ways in which the case-law on citizenship can be read and presented. For the purpose of this article, I will follow a broadly chronological approach to show how the Court expanded citizens’ rights, especially for the non-economically active, concerning both access to social and financial benefits and ‘non-economic, but symbolically important, interests’ (Jacobs 2007: 598) such as the use of personal names. First, the judgements on the situation of non-workers, students and job-seekers will be examined. This is where the combination of Union citizenship with the right to equal treatment with nationals and the creation of a directly effective right of residence initially occurred. Then, the question will be addressed to what extent the provisions on citizenship now also cover internal situations, i.e. non-migrant EU citizens. Finally, the more recent case-law on restrictions to free movement will be assessed.

Expanding the rights of non-workers

After an initial period of uncertainty after the adoption of the Treaty of Maastricht, the breakthrough in terms of the utility of the novel EU citizenship rules occurred in 1998 with the ruling in Martinez Sala[3]. Since Maria Martinez Sala lawfully resided in Germany even though she was not economically active (under the European Convention on Social and Medical Assistance), the Court ruled (at para 62) that she was as an EU citizen (Art. 17(2) EC) entitled not to suffer discrimination on grounds of nationality within the scope of application of the Treaty (Art. 12 EC). On the facts, Martinez Sala concerned a childcare benefit granted to all persons lawfully resident, which was refused to Martinez Sala because she could not provide a residence permit – a condition not imposed on nationals. The Court considered the benefit to fall within the material scope of Community law by virtue of Art. 7(2) of Regulation 1612/68 on social advantages for migrant workers. Regarding personal scope, being a Union citizen lawfully resident in another Member State was enough to fall within the personal scope of the Treaty and to enjoy equal treatment[4].

The combined reading of Art. 17(2) and 12, which first appeared in Martinez Sala, broadened the rights of Union citizens considerably. Union citizens lawfully residing in another Member State (including those not economically active) are granted a general right of non-discrimination in all situations falling within the material scope of the Treaty, broadly defined. The Court could have chosen to limit the entitlement not to suffer discrimination to those Articles on citizenship, but it did not (O’Leary 1999: 77). Thus, the case has been seen ‘to introduce a new radical, comprehensive right of equal treatment’ (Mather 2005: 735) for Union citizens, as both the interpretations of the personal scope and material scope of Community law were very broad. While some criticised the ‘artificial and flimsy’ (Spaventa 2008: 33) way in which the material scope of Community law was defined, others, like Mather (2005), expressed worries about the judgement posing a challenge to Member States’ welfare sovereignty. 

In Martinez Sala the Court did not clarify whether Article 18 EC could constitute an independent source of residence rights, and thus left the true nature and meaning of the citizenship provisions uncertain. James Mather (2005) believes the Court consciously avoided passing judgement of the matter, thereby confirming a ‘subordinate and parasitic nature’ (731) of Union citizenship. It was in Baumbast[5] (a case of a German national living in the UK who did not qualify as a migrant worker anymore, according to UK authorities, because he had started working for German companies outside the Community) in 2002 that Art. 18 EC was recognized as an independent source of rights, providing a directly effective right of residence. The Court stated that Art. 17 EC does not require Union citizens to be economically active in order to enjoy the right to free movement and residence of Art. 18 EC. The limits and conditions to which Art. 18(1) EC refers (mainly that of having sufficient resources and sickness insurance in order to not become an unreasonable burden, as stated by the Residence Directives) are, according to Baumbast, subject to judicial review, meaning that restrictions on the right to free movement and residence must inter alia be proportionate (one of the general principles of Community law). The Court’s reasoning was based on the fact that Art. 18 EC enjoys Treaty status and that secondary legislation must not interfere in a disproportionate way with fundamental rights conferred by the Treaty. Therefore, although he was no longer a worker, Baumbast enjoyed a directly effective right of residence as a citizen of the EU under Art. 18(1) EC, which could not be revoked without respecting the principle of proportionality (in this case, the UK authorities were referring to a lack of comprehensive health insurance). Hence, the judgement also has consequences for those without ‘sufficiently sufficient resources’ (Dougan/Spaventa 2003: 705): limitations to the directly effective right of Art. 18(1) must be applied in accordance with the general principles of Community law: proportionality, and possibly fundamental rights such as respect for family and private life (Dougan/Spaventa 2003: 710).

While the rulings in Martinez Sala and Baumbast thus seem to go very far, the 2004 judgement in Trojani[6] stands for a more cautious approach. According to this judgement[7], while lawfully resident EU citizens (falling within the personal scope of the Treaty by virtue of this ‘fundamental status’) enjoy equal treatment under Art. 12 EC, Member States may withdraw residence rights from non-economically active Union citizens when the resources and insurance conditions are no longer fulfilled (as in Trojani’s case; the French national was applying for a minimum subsistence allowance in Belgium while being lawfully residing there at a Salvation Army hostel, earning only some pocket money as part of a reintegration programme). In other words, so long as they are lawfully resident, be it on the basis of national law, non-workers have a right to equal treatment in access to social benefits by virtue of their Union citizenship. However, it arises from Trojani that revoking a right to residence can be proportionate. (O’Brien 2008: 643, 648) O’Brien (2008) therefore argues that the ECJ did not ‘create a core of transnational solidarity’ (649). However, it is worth noting that the Court said that the lack of sufficient resources can only be indicated by and not automatically deduced from recourse to social assistance.

Taken together, these judgements show that the Court was willing to expand the rights of Union citizens who are not economically active. Under certain circumstances, they are ‘entitled to claim membership of the national solidaristic community, based on nothing more than the common bond of Union citizenship’ (Dougan 2006: 622). In short, the ECJ strengthened the rights of EU citizens who do not fall into any of the categories covered by the Residence Directives by using Union citizenship in order to widen the scope of Art. 12 EC. Nevertheless, Member States retain the right to determine when a non-national has become an ‘unreasonable burden’ for the public purse.

Expanding the rights of students 

The creation of Union citizenship also had an important impact on students who study in another Member State than their own. According to the rulings presented below, they are, as Union citizens, entitled to certain social advantages, though typically not to maintenance grants (as laid down in Directive 93/96 EC and confirmed by the Court in Brown[8] in 1998).

Indeed, it was in Grzelczyk[9] in 2001 that the Court first made use of the formula that Union citizenship was ‘destined to be the fundamental status of nationals of the Member States, enabling those who find themselves in the same situation to enjoy the same treatment in law irrespective of their nationality, subject to such exceptions as are expressly provided for’ (para 31). This is why migrant, economically ‘inactive’ students such as Grzelczyk, as citizens of the EU, can rely on Art. 12 EC in all situations which fall within the material scope of Community law, save for specific exceptions. Grzelczyk, a French national, applied for the Belgian minimum subsistence allowance (‘Minimex’), even though in his fourth year he was not working anymore, aside from his studies. The Advocate General claimed that Grzelcyzk was ineligible because he was not employed. The Court ruled against this opinion and found Grzelczyk eligible for Minimex, stating that the same condition was not imposed on Belgian nationals. The Court found this to be discrimination against EU citizens that was incompatible with the Treaty when Art. 12 and 18 EC were taken together. Whereas Directive 93/96 on the free movement of students excluded maintenance grants from the scope of Community law, this was not the case for the Minimex, a social security benefit allocated on a needs basis.

As Epiney (2007) notes, this broadened the scope of Art. 12 considerably, leaving room for concerns about an incursion into national welfare sovereignty and a potential competence creep. However, it is crucial to note that the Court defined the material scope of Community law by reference to the fact that Grzelczyk had moved as a Union citizen under Art. 18(1) EC. Again, this shows a certain boldness of the Court in broadening the personal and material scope of Community law (Mather 2005). Moreover, it found that recourse to social benefits could not automatically result in withdrawal of the right to reside – implying that the host society can be expected to carry a ‘reasonable burden’ (at para 44: ‘a certain degree of financial solidarity between nationals of a host Member State and nationals of other Member States’).  Just as in Martínez Sala, the right of residence had to be considered in light of citizenship. Grzelczyk would certainly have been unlikely to succeed without the influence of citizenship (Craig/de Búrca 2008). As Hailbronner (2005) puts it in his critique of the judgment: ‘It is at least far from being evident that the legal situation which the Court has described in Brown has changed fundamentally as a result of the introduction of Union citizenship’ (1250).

The second important case concerning students was Bidar[10] in 2005. The Court effectively ruled that student loans and maintenance grants under certain circumstances fall within the scope of Art. 12 EC because of the citizenship provisions. The judgment thus goes further than that in Grzelczyk. Dany Bidar, a French national, had been refused a maintenance loan on the grounds that he was not ‘settled’ (i.e., residing there at least four years for purposes other than education) in the UK – in fact, he had completed his secondary education there while his mother received medical treatment during several years. A departure from earlier case law can be seen in that lawful residence was assumed by the Court from Bidar’s actual presence in the UK (Barnard 2007). On the facts, the Court ruled that requiring settled status or residence for a certain (disproportionate) period in order to obtain maintenance loans could be indirectly discriminatory. However, the Member State could legitimately ask in the case of maintenance costs for a ‘certain degree of integration into the society of that state’ (at para 57)  through a period of residence requirement, in order to ensure that there is a ‘genuine link’ (para 55) between the claimant and the host society. Three years was suggested as a proportionate requirement (Barnard 2007).

However, Jacobs (2007) estimates that this approach may prove difficult to apply consistently, as length of residence may not be the only indicator of integration into the society. The judgment has also been criticised for implying at para 45 that Directive 93/96 EC only excludes those students who go to another Member State to start or pursue higher education there from student loans and maintenance grants. According to Hailbronner (2005), ‘[t]here is in fact nothing in the Directive supporting this interpretation.’ (1256)

Although the rights of migrant students have been substantially strengthened, the cases also show that there is still a distinction drawn between economically active and non-active migrant EU citizens, and those who are more or less integrated into the host society. Financial solidarity is only expected to a certain extent, which does not speak in favour of a perfect assimilation approach. Bidar makes it even clearer than Grzelczyk that the degree of solidarity expected from the host society is dependent on the integration of the free mover into that society (Barnard 2007). As Weiss and Wooldridge (2007) note, this denial of full equal treatment sits somewhat uncomfortably with the formula of ‘fundamental status’ (173). At the same time, it is a welcome restraint in view of the concerns about judicial activism, considering that Art. 18(1) expressly makes reference to the limitations and conditions laid down in the Treaty and secondary Community law.

Expanding the rights of work-seekers

Prior to the case law on citizenship described below, work-seekers qualified for equal treatment only with regard to access to employment (under Article 39 EC and Articles 2 and 5 of Regulation 1612/68 EC), not in the field of wider social and financial advantages.

This situation changed in 2002 with the Court’s judgment in D’Hoop[11]. A Belgian rule rendering a tide-over allowance conditional upon having completed secondary education in Belgium was found disproportionate, and in particular discriminatory on the ground of having exercised free movement rights – ‘such inequality of treatment is contrary to the principles which underpin the status of citizen of the Union’ (para 35). The judgment thus confirms those in Martínez Sala and Grzelczyk. Once again, the Court was rather creative in bringing the measure under the material scope of the Treaty, making use of the aim in Article 149(2) EC that the Community should involve itself in encouraging the mobility of teachers and students. Hailbronner (2005) finds this unconvincing with regard to the limited EC competences in the field of education. With regard to the personal scope, it was sufficient that D’Hoop had previously exercised her fundamental freedom to move and reside freely provided by Article 18(1) EC. The most important consequence of D’Hoop is surely that ‘no rule, as such, can be excluded from the scope of the Treaty’ (Spaventa 2008: 23).

In another case concerning a job-seeker, Collins[12] (an Irish-American who had moved to the UK in order to find work there and was refused a job-seekers’ allowance), the Court said in 2004 that the rights of work-seekers under Art. 39 EC should be interpreted in the light of Art. 12 EC, because qua being EU citizens they enjoy the rights conferred by the Treaty upon them, notably the right to equal treatment in all situations falling within the material scope of Community law. Therefore, in view of the establishment of citizenship it is, in the Courts analysis (para 63), no longer possible to exclude financial benefits for work-seekers from the scope of the Treaty. This is a far-reaching statement. However, a ‘genuine link’ between the claimant and the national job market can be legitimately required, according to Collins. These objectively justified requirements must observe the principle of proportionality and may not go beyond what is necessary (Weiss & Wooldridge 2007). Whereas such requirements must be independent of the nationality of the claimant, a residence requirement is justifiable (Jacobs 2007:).

Before turning to the situation of non-migrant EU citizens, it is useful to take a broader look at the implications of the judgments discussed so far for the question whether they lead to a ‘freedom of second-class status’ (Halberstam 2005: 487) of Union citizens in another Member State than their own. It is submitted that this is not the case. Member States retain the capacity to revoke residence rights of migrant EU citizens who become an unreasonable burden – ‘a threat that cannot be issued to nationals’ (O’Brien 2008: 647). Moreover, Member States may develop criteria for entitlement to benefits, which, ‘whilst affecting non-nationals more than own citizens, pursue a legitimate aim and are proportionate’ (Spaventa 2008: 30), for example a length-of-stay criterion. The general interest of a financial balance of the systems of social security still provides a possible avenue for limiting the effect of Art. 12 (Epiney 2007). After all, the ‘real link’ formula allows for some flexibility. This undermines the critique of judicial activism and a transnational solidarity being created by law. Moreover, it remains open to the Member States ‘to exclude non-nationals from certain benefits when the non-national Union citizen is objectively in a different situation from the national’ (Spaventa 2008: 28-29). Thus, the case-law has contributed to ‘a conceptual shift … from automatic exclusion to exclusion that must, and usually can, be justified’ (O’Brien 2008: 665). Far from creating a European social contract, the ‘real link’ concept, which in hindsight is common to the approach in all the above-mentioned judgements, allows only for a limited solidarity to be relied upon by economically non-active migrant EU citizens. Dougan (2006) sees it as a mere ‘help to overcome temporary financial embarrassments’ (622). There is indeed a dilemma for migrants with poor resources: the more solidarity they call upon, the more likely it is that the host State will consider expulsing them for having become an unreasonable burden (Dougan 2006: 708). This was confirmed by Trojani and places limits on the Martínez Sala principle of equal treatment for lawfully resident Union citizens. Before acquiring permanent residence, migrant citizens can still be deported, unlike nationals (O’Brien 2008).

Moreover, citizenship rights of free movement and residence are not yet a general fundamental right, as proposed by Advocate General Jacobs (Reich & Harbacevica 2003). Rather they are corollaries to other rights and freedoms: ‘a right to free movement may exist under Article 18(1) EC but … crucially, its exercise is still dependent upon the application of other provisions’ (Mather 2005: 731). This is illustrated by Trojani, who could claim the Minimex only because he held a residence permit and was thereby entitled to equal treatment. The Court has refrained from creating an independent right to move and reside (Mather 2005). It seems to use the citizenship provisions only to ensure equal treatment within the exercise of free movement and residence rights.

With a view to the need for ‘sufficiently sufficient’ resources and insurance it is not possible to speak of a freedom from second-class status.

Generally speaking, there is still a hierarchy between the different categories of EU citizens – unsurprisingly, as this reflects the patterns of identification within the EU (Dougan & Spaventa 2003). It seems that students and work-seekers are better off than non-workers. Hence, the most vulnerable have are least able to rely on benefits, since there is no independent right of residence that would make equal treatment truly meaningful (Dougan & Spaventa 2003: 622). Moreover, economically active and non-active Union citizens are still not treated in the same way, as also reflected by Directive 2004/38 EC. With a view to the need for ‘sufficiently sufficient’ resources and insurance it is not possible to speak of a freedom from second-class status. Besides, legally resident third-country nationals do not enjoy the benefits of Union citizenship, unless they are family members of a Union citizen.

Nevertheless, the migrant’s position is strong if his residency is secure under national law (Dougan & Spaventa 2003). In this case, the Court has created a broad right to non-discrimination within the Treaty’s scope of application. Once lawfully resident, expulsion (respecting proportionality and human rights) is the only way to avoid unjustified discrimination of the non-economically active EU citizen, as Grzelczyk and Trojani showed (Spaventa 2008).

Expanding the rights of non-migrant EU citizens?

The Court has used Articles 17 and 18 not only to expand the rights of non-economically active migrant EU citizens, but also to prevent discrimination in the home state. It is necessary to think about this dimension to fully assess the impact of citizenship (Spaventa 2008). In certain situations which would previously have counted as wholly internal situations, a sufficient link to Community law has been established through Art. 17 and 18 EC (Craig & de Búrca 2008).

This is the case in Schempp[13]: Egon Schempp had not moved from Germany, but his former wife had, causing a tax disadvantage to Schempp. This was relevant in defining the material scope, but not the personal scope, of the case. On the personal scope, Court relied on Art. 17(2), stating at para 17 that it ‘attaches to the status of citizen of the Union the rights and duties laid down by the Treaty, including the right to rely on Article 12 EC in all situations falling within the material scope of Community law’. On the facts, the Court decided that a mere difference between the tax regimes of two Member States is not sufficient to trigger Art. 18(1). The applicant has to show that he suffered from discrimination in comparison to similarly situated nationals.

Another case in which no movement had occurred was Garcia Avello[14], which concerned Mr. Avello’s application in Belgium to change the surname of his children, who had both Spanish and Belgian nationality, to the Spanish-style double surname. The cross-border element was indeed quite ‘thin’ (Spaventa 2008: 25). The matter fell within the scope of the Treaty ‘by virtue of the fact that the children had dual nationality, and that (in the Court’s view) the application of Belgian rules might have led to some sort of future inconvenience had they wanted to move to Spain’ (Spaventa 2008: 28). In its 2003 judgment, the Court combined Art. 17 and 12 EC to grant a ‘right to different treatment’ to the children concerning their surnames, so that they would not be disadvantaged if they moved to Spain one day. This case shows again the Court’s wide view of which situations affect the exercise of the rights conferred by the Treaty (Mather 2005).

In Chen[15] the Court confirmed in 2004 the direct effect of Art. 18(1) EC for a Union citizen who does not fall in any of the traditional status categories. The case concerned a newborn baby resident in the United Kingdom who had Irish nationality due to the then effective jus sole in Northern Ireland, but had not actually moved to Ireland or anywhere else.

In 2006, also as a result of the introduction of Union citizenship, the Court questioned Member States’ rights to restrict benefits to citizens resident in their home country. In Tas Hagen,[16] where two Dutch nationals living in another Member State were refused a financial benefit for civil victims of war because it was only available for Dutch nationals residing in the Netherlands, the Court accepted that ‘a residence requirement in relation to benefits previously excluded from the material scope of the Treaty, now falls within the scope of Community law (as a limitation of the right to movement)’ (Spaventa 2008: 21-22). Similarly, Morgan and Bucher[17] in their claim against their home state fell within the personal scope of the Treaty as Union citizens. The Court held that conditioning grants for studies in another Member State on previous studies of at least one year in the home state (Germany in these cases) was an unjustified restriction, potentially deterring students from using their right to move and reside freely and is therefore contrary to Art. 17 and 18 EC.

The Court thus made ample use of the fact that migration is not mentioned by Art. 17. Nationality is now sufficient to fall within the personal scope of the Treaty; there is not necessarily a need for an economic link and the cross-border link may be quite thin (Spaventa 2008). The more recent case law on residence requirements suggests that Art. 17(2) EC might be read independently from Art. 18 EC (Spaventa 2008). The extent to which this has practical implications then depends on the material scope of the Treaty, i.e. the rights that the Union citizen may claim. As shown above, the Court’s reasoning in this regard is not always persuasive (see for example the assessment in Martínez Sala on material scope) (Spaventa 2008). This raises concern with regard to a potential competence creep by broad definitions of the material scope of Community law.

Nevertheless, as only about 2 percent of Union citizens make use of their right to move and reside freely, this is potentially very important in order to create a meaningful notion of EU citizenship, which is not limited to migrant individuals (Editorial comments 2008). So far, however, EU citizenship for non-migrants still ‘seems to come down to a somewhat bleak “fundamental status”’(Editorial comments 2008: 4). Spaventa argues that where Art. 12 EC applies to migrant citizens merely on the ground that their situation falls within the personal scope of the Treaty, this should also apply to static citizens holding Union citizenship (Spaventa 2008). They could then rely on Art. 12 in a situation comparable to that of a migrant, installing true equality through Community law in a rights-based, rather than integrationist, interpretation of Union citizenship.

Protection from unjustified restrictions of free movement and residence

A recent line of case law introduced the language of restrictions and obstacles into the scope of Union citizenship. These cases concern rules in either the citizen’s home state or the host state. They develop or enhance rights regardless of the citizens’ economic status and usually concerns forms of discrimination against movers as compared to non-movers.

This shift towards a restrictions approach, away from an approach based purely on discrimination first appeared in 2004 in Advocate General Jacobs’ opinion in Pusa[18] (a tax case of a Finnish pensioner living in Spain), where he argued that direct or indirect discrimination was not necessary to trigger Art. 18. In 1998, the Court had indicated for the first time in Bickel and Franz[19] (on language rights in court proceedings) that Art. 18(1) could play a role in a separate claim (Weiss & Wooldridge 2007).

In De Cuyper[20] (a 2006 case on unemployment benefits), a residence requirement was found in breach of Art. 18(1) EC, but upheld as proportionate. Such scrutiny would not have taken place prior to the introduction of Union citizenship. Similarly, a residence requirement for wartime benefits fell within the material scope of the Treaty because of Union citizenship in Tas Hagen, and was found to be dissuading from free movement, thus breaching Art. 18 EC.

The increasing scrutiny of national tax law is also illustrated by Turpeinen[21] (where Finnish tax law disadvantaged pensioners living in another Member State, thus hindering free movement and therefore breaching Art. 18(1) EC) and Schwarz[22] (concerning a tax benefit linked to school fees being paid in the home state), from 2006 and 2007. The term of ‘unjustified restriction’ (at para 28) was mentioned for the first time in 2007 in Morgan and Bucher (where a rule that the German maintenance grant Bafög for studies in other Member States was conditional upon one year of studies in Germany was successfully challenged).

This line of case law takes the free movement of EU citizens even a step further, decoupling citizenship from the prohibition of discrimination (Editorial comments 2008). This is to be welcomed, as it ensures the effectiveness of the right to move and reside freely within the EU without being disadvantaged, unless for good reasons. While this does again not amount to a complete freedom of ‘second-class status’, it allows for far-reaching steps towards equal treatment. It also shows that the Court is willing to assimilate citizenship case law to the developments of the other freedoms. It can even be said that Art. 18 EC, having acquired direct effect, has now become ‘an overarching principle which is to structure all EC law that falls within its domain’ (Chalmers 2006: 779) instead of being subject to limitations and conditions itself. To what extent this widening of the scope of Community law might be criticised as a competence creep will be assessed in the final conclusion.

Conclusion

Until recently, the law of the Single Market was ‘based on the distinction between economically active and non-economically active persons’ (Hailbronner 2005: 1245). The European Court of Justice has eroded this distinction to some extent by giving more and more substance to the citizenship clauses introduced by the Treaty of Maastricht (Craig & de Búrca 2008). It can be said that the Court has made ‘creative use’ of the concept of Union citizenship to expand Union citizens’ rights (Barnard 2007: 445). Although this redefinition and broad interpretation of the personal and material scope of Community law does not amount to a ‘freedom of second-class status’ for all EU citizens alike, it has nevertheless had a considerable impact and has not escaped harsh criticism (e.g., from Hailbronner 2005; Iliopoulou & Toner 2002; Mather 2005).

In summary, the Court does no longer see EU citizenship rights as ‘residual to existing, largely economic-oriented, provisions on the free movement of persons’ (Mather 2005: 725). Instead, free movement is now somewhat detached from the economic grip of the internal market (Dougan & Spaventa 2003). The requirement to show an economic link and even a cross-border link in order to fall within the personal scope of the Treaty has been eroded to some extent by the Court’s case law on Union citizenship. (Spaventa 2008)

This indeed challenges the economic paradigm which underpins the European project and could prove essential in order to move the EU project beyond market integration towards a citizen’s Europe, or even a social Europe. However, this is not without risks: asking too much in terms of financial solidarity might indeed lead to backlashes (Barnard 2007). It could undermine the ‘psychological glue’ (Dougan 2006: 623) of national welfare systems as long as there is not enough solidarity even to bear a ‘reasonable burden’ of economically inactive fellow Union citizens.

Some, like Hailbronner (2005), therefore question the legitimacy of the Court’s approach at the present stage of integration. Hailbronner (2005) suggests quite rightly that such a ‘nation-building’ exercise should be a product of Community legislation rather than jurisprudence (1265-1266). Arguing that the Court in its teleological approach went beyond what Member State governments were envisioning by including citizenship in the Treaty, he deplores the ECJ’s judicial activism in this field.

Although this is a valid argument, it is a somewhat ‘false alarm’ (O’Brien 2008: 665). The ECJ has shown its awareness of the dangers of benefit tourism and insisted on taking into account the individual circumstances in each case (Dougan 2008). The case-law illustrates this incremental approach: the solidarity granted to Martinez Sala (a long-term resident with a high degree of integration) is different to that assumed in the cases of those job-seekers who just arrived in another Member State. Cases such as Grzelczyk and Bidar (who was apparently held to be more integrated than Grzelczyk, but less than Martínez Sala) are situated in between these extremes.

Hence, it can be said that there is still a hierarchy between different categories of free movers. Non-economically active migrants continue to be in the ‘most precarious position’ (Barnard 2007: 445). Most crucially, Member States retain the right to withdraw residence rights from those who manifestly do not have sufficient resources or insurance (that is, before they reach permanent residence under Directive 2004/38 EC). It is up to the Member State to determine when a burden becomes unreasonable, although the procedure is subject to judicial review. (O’Brien 2008) It cannot therefore be said that Union citizens are completely free from a ‘second-class status’.

To conclude, the ECJ has in a ‘cautious but persistent line of case law’ (Craig & de Búrca 2008: 868) extended the scope of Art. 12 EC, combined with Articles 17 and 18 EC, to all situations where Union citizens were discriminated against based on their nationality and/or the fact that they exercised their right to move and reside freely. It has thus helped to create something that comes close to a ‘fifth Treaty freedom’ (Editorial comments 2008: 1), without however drafting a ‘European social contract’ (Dougan/Spaventa 2008: 704), as some critics suggest.

The Treaty of Lisbon might be seen as a codification of the case law dealt with in this paper. It provides for the marriage of the citizenship and non-discrimination provisions. Part Two of the TFEU is entitled ‘Non-Discrimination and Citizenship of the Union’ and the former Art. 12 appears in a very prominent position therein (Editorial comments 2008: 7). There are several hints for a shift away from market integration as primary principle towards one in which fundamental rights and the individual are in the centre of attention.

However, it should not be forgotten that Union citizenship is secondary to national citizenship, since it is based on nationality of an EU Member State and that it remains a rather ‘thin concept’ (Craig & de Búrca 2008: 848), meant to supplement rights conferred at national level. Whether it is in its current form meaningful enough to create identification among Union citizens remains to be seen. In any case, being a dynamic form of citizenship, it may evolve even further in the future, be it in terms of legislative, jurisprudential or societal developments.

© Vera Kissler, April 2009

Bibliography

Barnard, Catherine, The Substantive Law of the EU (2nd edn Oxford University Press, Oxford 2007).

Chalmers, Damian, ‘The unbearable heaviness of European citizenship’ (2006) 31(6) ELRev 779.

Craig, Paul and Gráinne de Búrca, EU Law. Text, Cases, and Materials.(4th edn Oxford University Press, Oxford 2008).

Dougan, Michael, ‘Cross-border educational mobility and the exportation of student financial assistance’ (2008) 33(5) ELRev 723.

Dougan, Michael, ‘The constitutional dimension to the case-law on Union citizenship’ (2006) 31(5) ELRev 613.

Dougan, Michael and Eleanor Spaventa, ‘Educating Rudy and the non English patient: a double bill on residency rights under Article 18 EC’ (2003) 28(5) ELRev 699.

‘Editorial comments. Two-speed European Citizenship? Can the Lisbon Treaty help close the gap?’ (2008) 45(1) CMLR 1.

Epiney, Astrid, ‘The Scope of Article 12 EC: Some Remarks on the Influence of European Citizenship’ (2007) 13(5) ELJ 611.

Hailbronner, Kay, ‘Union citizenship and access to social benefits’ (2005) 42(5) CMLR 1245.

Halberstam, Daniel, ‘The bride of Messina: constitutionalism and democracy in Europe’ (2005) 30(6) ELRev 775.

Iliopoulou, Anastasia and Helen Toner, ‘Case C-184/99, Rudy Grzelczyk v. Centre public d’aide sociale d’Ottignies-Louvain-la-Neuve, judgment of the Full Court of 20 September 2001, [2001] ECR I-6193′ (2002) 39(3) CMLR 609.

Jacobs, Francis G., ‘Citizenship of the European Union – A Legal Analysis’ (2007) 13(5) ELJ 591.

Mather, James D., ‘The Court of Justice and the Union Citizen’ (2005) 11(6) ELJ 722.

O’Brien, Charlotte, ‘Real links, abstract rights and false alarms: the relationship between the ECJ’s “real link” case-law and national solidarity’ (2008) 33(5) ELRev 643.

O’Leary, Siofra, ‘Putting flesh on the bones of European Union citizenship’ (1999) 24(1) ELRev 68.

Reich, Norbert and Solvita Harbacevica, ‘Citizenship and family on trial: A fairly optimistic overview of recent court practice with regard to free movement of persons’ (2003) 40(3) CMLR 615.

Spaventa, Eleanor, ‘Seeing the wood despite the trees? On the scope of Union citizenship and its constitutional effects’ (2008) 45(1) CMLR 13.

Weiss, Friedl and Frank Wooldridge, Free movement of Persons within the European Community (2nd edn Kluwer Law International, London 2007).

Case-law:

Boukhalfa v. Germany C-214/94 [1996] E.C.R. 2253.

Martínez Sala v. Freistaat Bayern C-85/96 [1998] ECR I-2691.

Baumbast and R. v. Secretary of State for the Home Department C-413/99 [2002] ECR I-7091.

Trojani v. Centre public d’aide sociale de Bruxelles C-456/02 [2004] ECR I-7573.

Brown v. Secretary of State for Scotland C-197/86 [1998] ECR I-3205.

Grzelczyk v. Centre public d’aide sociale d’Ottignies-Louvain-la-Neuve C-184/99 [2001] ECR I-6193.

Bidar v. London Borough of Ealing and Secretary of State for Education and Skills C-209/03 [2005] ECR I-2119.

D’Hoop v. Office national de l’emploi C-224/98 [2002] ECR I-6191.

Collins v. Secretary of State for Work and Pensions C-138/02 [2004] ECR I-2703.

Schempp v. Finanzamt München C-403/03 [2005] ECR I-6421.

Garcia Avello v. Belgium C-148/02 [2003] ECR I-11613.

Zhu and Chen v. Secretary of State for the Home Department C-200/02 [2004] ECR I-9925.

Tas-Hagen and Tas v. Raadskamer WUBO van de Pensioen- en Uitkeringsraad C-192/05 [2006] ECR I-10451.

Joined cases Morgan v. Bezirksregierung Köln C-11/06 and Bucher v. Landrat des Kreises Düren C-12/06 [2007] ECR I-9161.

Pusa v. Osuuspankkien Keskinainen Vakuutusythio C-224/02 [2004] ECR I-5763.

Bickel and Franz C-274/96 [1998] ECR I-7637.

De Cuyper v. Office National de l’Emploi C-406/04 [2006] ECR I-6947.

Turpeinen v. Uudenmaan verovirasto C-520/04 [2006] ECR I-10685.

Schwarz and Gootjes-Schwarz v. Finanzamt Bergisch Gladbach C-76/05 [2007] ECR I-6849.

[1] C-214/94 [1996] E.C.R. 2253.

[2] stuff and things (Erklärung in Layout)

[3] Case C-85/96 [1998] ECR I-2691.

[4] Note that it was not a direct right of residence by virtue of Art. 18(1).

[5] Case C-413/99 [2002] ECR I-7091.

[6] Case C-456/02 [2004] ECR I-7573.

[7] At para 43: ‘a citizen of the Union who is not economically active may rely on Article 12 EC where he has been lawfully resident for a certain period of time or possesses a residence permit”.

[8] Case C-197/86 [1998] ECR I-3205.

[9] Case C-184/99 [2001] ECR I-6193.

[10] Case C-209/03 [2005] ECR I-2119.

[11] Case C-224/98 [2002] ECR I-6191.

[12] Case C-138/02 [2004] ECR I-2703.

[13] Case C-403/03 [2005] ECR I-6421.

[14] Case C-148/02 [2003] ECR I-11613.

[15] Case C-200/02 [2004] ECR I-9925.

[16] Case C-192/05 [2006] ECR I-10451.

[17] Joined cases C-11/06 and C-12/06 [2007] ECR I-9161.

[18] Case C-224/02 [2004] ECR I-5763.

[19] Case C-274/96 [1998] ECR I-7637.

[20] Case C-406/04 [2006] ECR I-6947.

[21] Case C-520/04 [2006] ECR I-10685.

[22] Case C-76/05 [2007] ECR I-6849.

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