1. EU Citizenship and the Internal Market
Martijn van den Brink
Zagreb,

2. Outline for today
Key question: Does EU citizenship offer a new fundamental freedom beyond the four other freedoms?
Treaty provisions on EU citizenship
Secondary legislation (Citizenship Directive)
Case law (compare early with recent case law)

3. Free movement of persons
Free movement of workers (Art. 45 TFEU) and freedom of establishment (Art. 49 TFEU)
Right of residence in another Member State
Removing obstacles to free movement
Non-discrimination on grounds of nationality
Derogations to be interpreted strictly
Case C-55/94, Gebhard, para 37: ‘National measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must fulfil four conditions:
they must be applied in a non-discriminatory manner;
they must be justified by imperative requirements in the general interest;
they must be suitable for securing the attainment of the objective which they pursue;
and they must not go beyond what is necessary in order to attain it.

4. Need for economic activity
Case 53/81, Levin, para 17: ‘whilst part-time employment is not excluded from the field of application of the rules on freedom of movement for workers, those rules cover only the pursuit of effective and genuine activities, to the exclusion of activities on such a small scale as to be regarded as purely marginal and ancillary’
Case C-316/85, Lebon, para 26: ‘It must be pointed out that the right to equal treatment with regard to social and tax advantages applies only to workers. Those who move in search of employment qualify for equal treatment only as regards access to employment’
Case C-197/86, Brown, para 18: ‘At the present stage of development of Community law, assistance given to students for maintenance and for training falls in principle outside the scope of the EEC Treaty’

5. Beyond economic free movement?
Three Directives adopted in 1990
Council Directive 93/96/EEC on the right of residence for students
Article 3: ‘This Directive shall not establish any entitlement to the payment of maintenance grants by the host Member State on the part of students benefiting from the right of residence’
Council Directive 90/365/EEC on the right of residence for employees and self- employed persons who have ceased their occupational activity
Article 1(1): ‘Member States shall grant the right of residence to nationals of Member States who have pursued an activity as an employee or self-employed person provided that they avoid becoming a burden on the social security system of the host Member State during their period of residence and provided they are covered by sickness insurance’
Council Directive 90/364/EEC on the right of residence
 Article 1(1): ‘Member States shall grant the right of residence to nationals of Member States who do not enjoy this right under other provisions of Community law … provided that they … are covered by sickness insurance in respect of all risks in the host Member State and have sufficient resources to avoid becoming a burden on the social assistance system of the host Member State during their period of residence’

6. EU Citizenship Article 20 TFEU:
Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union.
Citizens of the Union shall enjoy
the right to move and reside freely within the territory of the Member States;
the right to vote and to stand as candidates in elections to the European Parliament and in municipal elections in their Member State of residence, under the same conditions as nationals of that State;
the right to enjoy, in the territory of a third country in which the Member State of which they are nationals is not represented, the protection of the diplomatic and consular authorities of any Member State on the same conditions as the nationals of that State;
the right to petition the European Parliament, to apply to the European Ombudsman, and to address the institutions and advisory bodies of the Union in any of the Treaty languages and to obtain a reply in the same language.

7. The right to free movement
Article 21(1) TFEU: ‘Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect’
Article 18 TFEU: ‘Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited’

8. Initial skepticism EU citizenship
‘pie in the sky’
‘cynical exercise in public relations’
‘flag that fails to cover its cargo’
EU citizenship is substantially empty

9. Early ECJ case law – Martínez Sala (1)
Facts
Spanish national resident in Germany (for around 25 years)
Has had several jobs and lawful residence/residence permits
When she applied for child-raising allowance, she did not have permit
Questions referred
(1) is she a worker?
(2) & (3) do benefits fall within the scope of EU law?
(4) is it compatible with EU law to discriminate against non-Germans by requiring residence permit for benefits?

10. Early ECJ case law – Martínez Sala (2)
Questions 2 and 3
Benefits fall within scope EU law. Child-raising allowance is social advantage in the meaning of Art. 7(2) Reg. No 1612/68 (paras 25-26)
Question 1
Court does not have sufficient information to decide whether applicant is worker (para 34)

11. Early ECJ case law – Martínez Sala (3)
Question 4
Requirement of residence permit amounts to unequal treatment
Art. 18 TFEU prohibits such discrimination when:
‘In the sphere of application of the Treaty’,
and in the absence of a justification
Sphere application Treaty?
Material scope: yes (see answer to questions 2 and 3)
Personal scope:
EU citizenship (right to free movement)
Lawful residence in another Member State sufficient
Justification possible?
No, because direct discrimination on grounds of nationality

12. Early ECJ case law – Martínez Sala (4)
Questions to consider:
What are the implications of the decision?
Does the case treat EU citizenship as a freedom beyond the market?
How does the decision relate to the 1990 legislation which allows for discrimination?
Legal principle: Lawful residence means equal treatment when situation falls within material scope Treaties

13. Early ECJ case law – Grzelczyk (1)
Facts
French national resident in Belgium
Applied for minimex in final year of residence
Application denied because nationality requirement not met
Question referred:
Is this decision contrary to principles EU citizenship, in particular Articles 18 and 20 TFEU?

14. Early ECJ case law – Grzelczyk (2)
Preliminary remarks
Mr Grzelczyk does not qualify as worker
Observations submitted:
All but two parties argue that EU citizenship does not offer something new
Article 20 TFEU (subject to limitations...)
Secondary legislation (Directive 93/96)
Former case law (Brown)

15. Early ECJ case law – Grzelczyk (3)
Principles EU citizenship
Discrimination on grounds of nationality in principle prohibited (paras 29-30)
EU citizenship destined to be fundamental status ... ‘subject to such exceptions as are expressly provided for’ (para 31)
Non-discrimination if EU citizen is lawfully resident and situation falls within material scope EU law (para 32)
Situations involving exercise of free movement fall within material scope EU law (para 33)

16. Early ECJ case law – Grzelczyk (4)
Relevance former case law (Brown)
Brown: student assistance fell outside scope Treaties
But since Brown (para 35):
New Treaty chapter on vocational training
EU citizenship rights
Directive 93/96

17. Early ECJ case law – Grzelczyk (5)
Article 20 TFEU and secondary legislation
Treaties subject to Directive 93/96
Art. 1: ‘the Member States shall recognize the right of residence for any student who … has sufficient resources to avoid becoming a burden on the social assistance system’
Art. 3: ‘This Directive shall not establish any entitlement to the payment of maintenance grants by the host Member State’
Response ECJ (paras 38-43)
Benefit is social security
Directive does not indicate minimum level of income (different from two other Directives)
Right to reside may be withdrawn
But not as automatic consequence of application social assistance

18. Early ECJ case law – Grzelczyk (5)
Questions to be considered
Is the reasoning of the Court convincing?
To what extent does the decision differ from Martínez Sala?
Is it broader or narrower in scope?
Legal principles
Lawful residence means equal treatment when person has exercised right to free movement
The Treaties constrain the scope of secondary legislation
Right to residence can be withdrawn but not as automatic consequence of recourse to benefits

19. Early ECJ case law – Trojani (1)
Facts:
French national resident in Belgium (lawfully resident)
Does various jobs as part of reintegration programme. Receives board, lodging and some pocket money from Salvation Army
Requested minimex
CAPS refused
no Belgian nationality
no worker

20. Early ECJ case law – Trojani (2)
Right to reside subject to the limitations laid down by legislation
Art. 1 Directive 90/364: Member States shall grant the right of residence to nationals of Member States who do not enjoy this right under other provisions of Community law, provided that they themselves … have sufficient resources to avoid becoming a burden on the social assistance system
Para 36: ‘a citizen of the Union in a situation such as that of the claimant in the main proceedings does not derive from Article 18 EC the right to reside in the territory of a Member State of which he is not a national, for want of sufficient resources within the meaning of Directive 90/364’

21. Early ECJ case law – Trojani (3)
Mr Trojani enjoyed residence under national law
Para 40: ‘while the Member States may make residence of a citizen of the Union who is not economically active conditional on his having sufficient resources, that does not mean that such a person cannot, during his lawful residence in the host Member State, benefit from the fundamental principle of equal treatment as laid down in Article 18 TFEU’
Para 45: Member State may withdraw right of residence, but ‘recourse to the social assistance system by a citizen of the Union may not automatically entail such a measure’

22. Early ECJ case law – Trojani (4)
Questions to be considered?
Was Directive 93/96 really so special and different (as ECJ said in Grelczyk) from Directive 90/364 (one at issues in Trojani)?
Legal principles Grelzcyk stand

23. Searching for real links – Collins (1)
Facts:
Irish-American national who had lived almost his entire life outside of the EU
Lived in the UK in 1979 to study and in to work
Returned to UK in 1998 to search for work and claimed jobseeker’s allowance
Regulation 1612/68
Art. 7(2): A worker ‘shall enjoy the same social and tax advantages as national workers’
Art. 5: A jobseeker ‘shall receive the same assistance there as that afforded by the employment offices in that State to their own nationals seeking employment’
Case law prior to EU citizenship
Lebon: Those who move in search of employment qualify for equal treatment only as regards access to employment in accordance

24. Searching for real links – Collins (2)
Para 58: Court acknowledges ‘that Member State nationals who move in search of employment qualify for equal treatment only as regards access to employment, but not with regard to social and tax advantages
Para 61: However, ‘citizens of the Union lawfully resident in the territory of a host Member State can rely on Article 18 TFEU in all situations which fall within the material scope of EU law’
Para 63: ‘In view of the establishment of citizenship of the Union …, it is no longer possible to exclude from the scope of Article 45 TFEU – which expresses the fundamental principle of equal treatment, guaranteed by Article 6 of the Treaty – a benefit of a financial nature intended to facilitate access to employment in the labour market of a Member State’

25. Searching for real links – Collins (3)
UK offers allowance only to habitual residents
‘ that requirement is capable of being met more easily by the State’s own nationals’ (para 65)
‘can be justified only if it is based on objective considerations that are independent of the nationality of the persons concerned and proportionate to the legitimate aim of the national provisions’ (para 66)
‘it is legitimate for the national legislature to wish to ensure that there is a genuine link between an applicant for an allowance and the geographic employment market’ (para 69)
‘The existence of such a link may be determined, in particular, by establishing that the person concerned has, for a reasonable period, in fact genuinely sought work’ (para 70)

26. Searching for real links – Collins (4)
‘while a residence requirement is, in principle, appropriate for the purpose of ensuring such a connection, if it is to be proportionate … its application by the national authorities must rest on clear criteria known in advance …. In any event, if compliance with the requirement demands a period of residence, the period must not exceed what is necessary in order for the national authorities to be able to satisfy themselves that the person concerned is genuinely seeking work’
Is residence requirement or genuine search for work more clear requirement?
Is it possible to examine whether individual has sought work based on a residence test?

27. Searching for real links
Collins: genuine link with employment market
Bidar: ‘certain degree of integration into the society of that State’
‘representative elements’, including
‘family, employment, language skills or the existence of other social and economic factors’,
location were schooling has been completed,
the chance of a future link with society,
the distance of the location of birth to the border of the host Member State.
Legal principles:
Lawful residence means equal treatment
Restrictions justifiable if they ensure genuine link/degree of integration

28. The EU Citizenship Directive (2004/38/EC)
General objectives
‘simplify and strengthen the right of free movement and residence of all Union citizens’
Prevent EU citizens from becoming ‘an unreasonable burden on the social assistance system of the host Member State’
Take into consideration the social integration and economic contribution of EU citizens to the host state.
Greater protection for long-term residents and economically active

29. The EU Citizenship Directive (2004/38/EC)
Article 24 Directive – equal treatment
(1) Subject to such specific provisions as are expressly provided for in the Treaty and secondary law, all Union citizens residing on the basis of this Directive in the territory of the host Member State shall enjoy equal treatment with the nationals of that Member State
(2) By way of derogation from paragraph 1, the host Member State shall not be obliged to confer entitlement to social assistance during the first three months of residence or, where appropriate, the longer period provided for in Article 14(4)(b), nor shall it be obliged, prior to acquisition of the right of permanent residence, to grant maintenance aid for studies … other than workers, self-employed persons, persons who retain such status and members of their families.

30. The EU Citizenship Directive (2004/38/EC)
Equal treatment for
Workers and self-employed
Permanent residents
Art. 16(1) ‘Union citizens who have resided legally for a continuous period of five years in the host Member State shall have the right of permanent residence there’
No equal treatment
During first three months
During longer period in Article 14(4)(b)
‘an expulsion measure may in no case be adopted against Union citizens or their family members if the Union citizens entered the territory of the host Member State in order to seek employment. In this case, the Union citizens and their family members may not be expelled for as long as the Union citizens can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged’
For students who are not permanent residents

31. The EU Citizenship Directive (2004/38/EC)
Additional rules on equal treatment
Article 7(3): ‘a Union citizen who is no longer a worker or self-employed person shall retain the status of worker or self-employed person in the following circumstances’
(b) ‘he/she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a job-seeker with the relevant employment office’
(c) ‘he/she is in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a jobseeker with the relevant employment office. In this case, the status of worker shall be retained for no less than six months’

32. Challenging the Directive – Vatsouras and Koupatantze (1)
Tension between Directive and Collins
Collins: social assistance after jobseeker has ‘for a reasonable period, in fact genuinely sought work’
Art. 24(2) Directive: No social assistance for jobseekers
Validity Article 24(2) challenged in Vatsouras and Koupatantze
Facts
Two Greek nationals in Germany
Employed for little under one year
Applied for benefits for jobseekers (SGB II under German law)
Application denied

33. Challenging the Directive – Vatsouras and Koupatantze (2)
Court circumvented validity question by reaffirming its own case law
‘benefit of a financial nature intended to facilitate access to employment in the labour market of a Member State’ (para 37)
‘legitimate for a Member State to establish a real link between the job-seeker and the labour market of that State’ (para 38)
‘such a link can be determined, in particular, by establishing that the person concerned has, for a reasonable period, in fact genuinely sought work’ (para 39)
‘the derogation provided for in Article 24(2) of Directive 2004/38 must be interpreted in accordance with Article 45 TFEU’ (para 44)
‘benefits which are intended to facilitate access to the labour market cannot be regarded as constituting ‘social assistance’ within the meaning of Article 24(2) of Directive 2004/38’ (para 45)

34. After Vatsouras and Koupatantze
Four principles
Lawful residence under national law means equal treatment
Real links applicant matter and can serve as justifiable restriction on equality
Secondary legislation interpreted so as to be compatible with Treaties
Benefits intended to facilitate access to labour market are not social assistance

35. Recent EU citizenship case law – Dano (1)
Facts
Romanian national who moved to Germany in 2010
Residence certificate issues by German authorities in 2011 (lawful residence)
Ms Dano lived with sister, did not speak German and did not look for work
She applied for benefits (SGB II – same benefit as in Vatsouras)
Application refused
Central question
Do legal provisions on EU citizenship (Treaties or legislation) allow for discrimination EU citizens who are not Germans

36. Recent EU citizenship case law – Dano (2)
First part reaffirms earlier decisions
EU citizenship destined to be fundamental status (para 58)
All citizens can rely on Article 18 TFEU if situation falls within material scope Treaties (para 59)
Then the Court changes course
The right to free movement ‘subject to limitations and restrictions laid down in Treaties and legislation’
Article 24(2) Directive gives more specific expression to Article 18 TFEU
Therefore, ‘the Court should interpret Article 24 of Directive 2004/38’ (para 62)
What is the difference with Vatsouras and Koupatantze?

37. Recent EU citizenship case law – Dano (3)
SGB II benefit is defined as social assistance benefit
Social assistance ‘refers to all assistance schemes established by the public authorities, … to which recourse may be had by an individual who does not have resources sufficient to meet his own basic needs’ (para 63)
Public benefits
For those in need
What is the difference with Vatsouras and Koupatantze?

38. Recent EU citizenship case law – Dano (3)
Court applies Article 24(2) to Ms Dano
Residence for more than three months
She is not looking for jobs
Her situation falls outside scope Art. 24(2) (para 66)
Court examines requirements of lawful residence
Residence must comply with conditions Article 7(1)(b)
‘have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence’
‘Any unequal treatment is an inevitable consequence of the Directive’ (para 77)
Those without sufficient resources do not fulfil requirements legal residence of Directive and can be denied benefits (para 81)

39. Recent EU citizenship case law – Dano (4)
Four principles
Lawful residence under national law means equal treatment
Real links applicant matter and can serve as justifiable restriction on equality
Secondary legislation interpreted so as to be compatible with Treaties
Benefits intended to facilitate access to labour market are not social assistance

40. Recent EU citizenship case law – Alimanovic (1)
Facts
Family from Sweden, lived in Germany until 1999 and returned in 2010
Acquired permanent residence in Germany and two members family worked for 11 months
They received unemployment benefits (SGB II) for six months (only)
Question: Is denial SGB II benefits in subsequent benefits compatible with principle of equal treatment and can that principle be limited by Article 24(2) Directive?

41. Recent EU citizenship case law – Alimanovic (2)
‘Union citizen can claim equal treatment … only if his residence … complies with the conditions of Directive 2004/38’ (para 49)
Two provisions Directive can confer right of residence on jobseekers (para 52)
Art. 7(3)(c): if ‘in duly recorded involuntary unemployment after completing a fixed- term employment contract of less than a year … and registered as a jobseeker with the relevant employment office …, the status of worker shall be retained for no less than six months’
Not in dispute that they received benefits for six months
Art 14(4)(b): jobseekers cannot be expelled if they can provide evidence that they are continuing to seek employment and have a genuine chance of being engaged (para 56)
No right to social assistance in that period according to Article 24(2) Directive

42. Recent EU citizenship case law – Alimanovic (3)
No individual assessment needed in such situations (para 59)
‘Directive 2004/38, establishing a gradual system as regards the retention of the status of ‘worker’ which seeks to safeguard the right of residence and access to social assistance, itself takes into consideration various factors characterising the individual situation of each applicant for social assistance and, in particular, the duration of the exercise of any economic activity’ (para 60)
By enabling those concerned to know, without any ambiguity, what their rights and obligations are, … namely a period of six months after the cessation of employment during which the right to social assistance is retained, is consequently such as to guarantee a significant level of legal certainty and transparency in the context of the award of social assistance by way of basic provision, while complying with the principle of proportionality

43. Recent EU citizenship case law – Alimanovic (4)
Four principles
Lawful residence under national law means equal treatment
Real links applicant matter and can serve as justifiable restriction on equality
Secondary legislation interpreted so as to be compatible with Treaties
Benefits intended to facilitate access to labour market are not social assistance

44. A freedom beyond the market?
Should the Court have reversed its earlier decisions and was it right to follow legislation?
To what extent does EU citizenship still offer a freedom beyond the market?