The Ups and Downs of Dual Citizenship – the CJEU on Dual Turkish/EU citizens and social rights

Professors: Elspeth Guild, Queen Mary University of London; Kees Groenendijk, Radboud University; and Steve Peers, University of Essex

In recent years, an increasing number of Turkish citizens residing in the EU have become dual citizens of Turkey and an EU Member State. Like other dual citizens of a Member State and a non-Member State, they can invoke EU free movement law to move and reside in another Member State (see the CJEU’s Micheletti judgment). But as a general rule, EU free movement law will not confer rights in their home Member State. So in that case, can they still rely upon their Turkish citizenship to claim rights under the EU/Turkey association agreement?

Back in 2012, in its judgment in Kahveci and Inan, the CJEU determined that dual Turkish/Dutch nationals were entitled to rely on their Turkish citizenship to enjoy the benefits of the EU/Turkey association agreement as regards family reunification and thus escape the stricter national legislation for own nationals’ family members. So until the recent decision earlier this month in Demirci, it looked as if Turkish citizens with a second passport from a Member State were more or less free to choose which one to rely on in order to benefit from EU law. But the Demirci judgment changes the rules slightly and provides a more elaborated legal reasoning to when dual nationals of Turkey and a Member State may use one or other of their citizenship.

The finding is rather ominous so we will start some background on the facts of the case and conclude with a rather optimistic analysis where we conclude that dual nationality is still a strong source of rights in EU law and that this judgment is perhaps the exception.

The Facts:

Mr Demirci and his fellow applicants are all former Turkish workers who had worked in the Netherlands for many years fulfilling the conditions of the secondary legislation of the EU/Turkey Association Agreement, Decision 1/80 of the EU/Turkey Association Council, which regulates aspects of the immigration status of Turkish workers and their family members. They had all naturalised as Dutch nationals but kept their Turkish citizenship. They all became disabled and incapacitated for work and thus permanently left the labour force. They received a Dutch social benefit designed to provide income for the incapacitated. But this benefit is rather low so they applied for a top up benefit to bring their income closer to that of the minimum wage. They were all awarded the top up benefit.

Then a series of things happened. The men retired with their families to Turkey. The Dutch Government began to change the rules on the top up benefit to exclude anyone not resident in the Netherlands (or the EU). Mr Demirci and his colleagues first had their top up benefit reduced then it was cut off altogether on the basis that they no longer lived in the Netherlands (or EU). They appealed, relying on their Turkish nationality, on the basis that this treatment was contrary to the EU/Turkey Association Agreement measure on social security – Association Council Decision 3/80. The argument went that the Dutch authorities may be able to cut off the top up benefit to their own nationals living outside the EU as this is a matter wholly internal to one Member State. But they cannot cut off the top up benefit to Turkish nationals who have fulfilled the conditions as workers in a Member State under Decision 1/80 as this is a matter of EU law (which does not permit such an act – Article 6(1) of Decision 3/80 protects Turkish workers who retire to Turkey as regards receipt of social benefits). Several years ago, the CJEU ruled in Akdas that such rules infringed Decision 3/80 as regards Turkish nationals who returned to Turkey. But could a dual citizen of Turkey and a Member State rely on that judgment, as a Turkish citizen – or would he or she be prevented from doing so, as a national of that Member State?  

The reasoning

The CJEU bluntly tells Mr Demirci and his colleagues that they cannot rely on Decision 3/80 to object to the residence requirement imposed by the Dutch authorities (para 52). This is because, according to the Court, the objectives of the Decision and the EU/Turkey regime is to ensure the progressive integration of Turkish workers into the territory of the host Member State. The social security provisions consolidate that objective.

The Court provides two main reasons for this position. First, because Mr Demirci and his colleagues had acquired Dutch nationality they are in a particular situation as regards the Agreement. Citizenship is ‘the most accomplished level of integration’ of a person into the host state (para 54). This new citizenship means that the former Turkish worker can now enter and reside freely in the Netherlands or indeed any other EU Member State where he or she might wish to go. Conversely, in Kahveci & Inan the Court did not accept the argument of the Dutch government that naturalisation is the pinnacle of integration. In that case AG Sharpston argued that naturalisation may be an indication that an immigrant is on his path to integration, but that is not the same as saying that he has become completely integrated. .

But as Turkish nationals, Mr Demirci and his friends could only live in Turkey or their host Member State (the Netherlands) and so they have no free movement rights. Further as such, they only benefit from certain rights in the host Member State. So, says the Court, for the purposes of paying them a benefit, it is reasonable for the national authorities to make this subject to the same rules as apply to all other Dutch nationals (para 57).   

Secondly, dual Turkish/Dutch nationals would be placed in a better position than other EU citizens if they were allowed to have the top up benefit even though they did not fulfil the residential requirement (para 58). The right to export to Turkey social benefits in Decision 3/80, according to the Court, is a sort of compensation for the fact that Turkish nationals will no longer be able to return to and live in the host Member State. As the CJEU held in Bozkurt, a Turkish national ceases to be a protected person under Decision 1/80 if he or she becomes totally and permanently incapacitated for work (para 64). So there is a justification for applying different rules to those who are exclusively Turkish nationals as they have a much less secure residence status in the host Member State and no free movement rights in EU law. They therefore need the extra protection of the export right. For dual Turkish/Dutch nationals, they can always move back to the EU and fulfil the residential requirements for the top up benefit (even if they would rather not) (para 65).

 Distinguishing Kahveci & Inan

As mentioned above, this judgment takes a different approach from the CJEU’s own jurisprudence in Kahveci & Inan where it held that dual Turkish/Dutch nationals were allowed to rely on their Turkish nationality for the purposes of the EU/Turkey family reunification rules, in order to benefit from the expulsion of Turkish workers’ family members, which are more favourable than the rules applying to the expulsion of the family members of Dutch citizens in the Netherlands. However, the CJEU is anxious to protect its ruling in Kahveci and goes to some lengths to explain why the finding in Kahveci is consistent with that which they were giving in Demirci (para 66). The argument goes like this. Family reunification enhances integration, for Turkish workers who are already legally integrated into the host Member State. Article 7 of Decision 1/80 deepens the last integration of a Turkish worker by granting to that worker’s family members, after three years residence, access to the labour force (para 67). So, acquisition of national citizenship could not be used as a reason to deprive the worker of the benefit of family reunification in Decision 1/80 (para 68). By contrast with the facts in Demirci, the family’s integration would be hindered if it was denied on the basis of dual citizenship. Further in Kahvecithe person was seeking to benefit family members who are also Turkish nationals (para 70). Presumably this reasoning means that dual Turkish/EU citizens can also invoke the ‘standstill’ clause in the EU/Turkey association agreement, as interpreted last year in the CJEU’s Doganjudgment (discussed here), to avoid stricter rules for family reunion that apply to a Member State’s own nationals.

But in the case of Mr Demirci he can always go back to the Netherlands (or the EU) to satisfy the residential requirement to get the top up (para 69). Further all he and his colleagues wanted was a top up benefit for themselves (para 71). Finally, the CJEU considered that if Mr Demirci could rely on Decision 1/80 to have the top up benefit while not fulfilling the residential requirement, this would put them in a better situation than that of other citizens of the Union (and thus contravene Article 59 of the Additional Protocol to the EU/Turkey association agreement, which rules out Turkish citizens being better off than EU citizens).

The Court’s approach seems to be that there is something inherently wrong about letting Mr Demirci and his colleagues have their cake and eat it too. The arguments may not be the most compelling in the world but they show a clear judicial line. The CJEU will favour Turkish nationals living in the EU even if they have taken a second citizenship so long as this improves their long lasting integration. But they cannot rely on their Turkish citizenship after naturalization when what they seek is a financial benefit which is subject to a residential requirement for EU citizens (and which they do not fulfil because they have left the EU).

The Court appears to implicitly return somewhat to its reasoning in the Mesbahjudgement of 1999, where it held that the Moroccan mother of a Belgian-Moroccan worker who was living with her son in Belgium could not rely on the clause prohibiting discrimination on grounds on nationality in the EEC-Morocco Association Agreement to claim a disablement allowance that under Belgian law was only granted to Belgian nationals. The Court in Demirci, however, does explicitly point to the difference with Kahveci & Inan: “[in] the present case, by contrast, the respondents in the main proceedings are relying on the provisions of Decision 1/80 on their own behalf and in their own interest” (para 70). The Court leaves the door open for the Turkish spouse of a Turkish/Dutch (ex-) worker to rely on Decision 3/80, because the spouse, not having Dutch nationality, would be unable to return to the Netherlands.

 

Conclusions

The most important thing to remember about the Demirci decision is that it does notundermine the Court’s judgment in favour of dual rights for dual citizens in Kahveci & Inan. Yes, Turkish nationals can rely on the EU/Turkey association agreement family reunion rules even after they have naturalized in their host Member State, provided they are allowed to have dual nationality (it isn’t yet clear if they could invoke the EU’s own family reunion Directive). But they cannot rely on their non-EU citizenship after they leave the EU to get around a national residential requirement for the export of a social benefit if such a requirement applies to nationals of the host Member State.

Barnard & Peers: chapter 13, chapter 26

Photo credit: www.dw.de

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Amending EU free movement law: What are the legal limits?

Steve Peers

Much public debate in recent weeks has centred upon the possible amendment of EU rules on the free movement of people. In particular, the think-tank Open Europe and the UK Labour party have set out policies on this issue, and Prime Minister David Cameron is expected to make an announcement of his views soon. While most of the discussion focuses on the political and economic aspects of these proposals, there is also an important legal dimension to the debate, because EU law determines how easy (or difficult) it would be to put any potential changes into effect.

In particular, there are three principal ways to change the EU free movement rules: (a) by changing national law, while still remaining consistent with EU law; (b) by changing EU legislation; or (c) by amending the EU Treaties. The first course of action needs only (at most) a national parliamentary majority; the second course of action needs a Commission proposal and support from the European Parliament and a qualified majority in the Council; but the third route needs unanimous support from all 28 Member States’ governments, then ratification in national parliaments.

So it’s important to know which of these categories the proposed reforms fall into. For the reasons set out in this blog post, some of the proposals of Open Europe fall into the second category (EU legislative amendment). But contrary to their arguments, the most significant proposals made by Open Europe fall into the third category (Treaty amendment), making them much more difficult to accomplish than their authors suggest.

As for the Labour party proposals, they broadly reflect the Open Europe suggestion to impose a waiting period on access to in-work benefits for EU migrants. Finally, it’s obviously not possible to comment on David Cameron’s proposals for EU policy reform (which might go beyond EU free movement law) until he makes them. So this blog will return to the issue after his forthcoming speech.

This blog post is in three parts: an analysis of the proposals on cutting back benefits for workers, job-seekers and former workers;  an examination of the other proposals made by Open Europe; and my suggested text for proposed amendments to EU legislation to implement those Open Europe proposals which are (in my view) both desirable and legally feasible.  

Cutting back workers’ benefits

The central proposal of Open Europe today is that newly-arrived EU citizens should be denied equal treatment as regards out-of-work or in-work non-contributory benefits, social housing and apprenticeship schemes for a period of between one and five years, to be negotiated. This suggestion builds upon another recent Open Europe paperwhich suggests further details of changes to EU legislation on these issues. My comments are mainly directed at the latter paper, which sets out the legal reasoning underpinning today’s proposal. As noted already, the Labour party proposals reflect Open Europe's suggestions, and so the following comments equally apply to those proposals.

I won’t mince words: there’s a fundamental legal problem at the core of these proposals. The Open Europe paper suggests that both in-work and out-of-work benefits could be limited simply by amending EU legislation. This is true for those EU citizens who are not workers, and who have never looked for work or held work in the host Member State, as the CJEU has recently clarified in the ‘benefit tourism’ case of Dano (see discussion here). But look at the Court’s reasoning: it deferred to the wording of EU legislation in that case because the Treaty rules on the rights of EU citizens (Articles 20 and 21 TFEU) defer to the limitations on EU citizens’ rights ‘defined by the Treaties and the measures adopted thereunder’, and ‘laid down in the Treaties and in the measures adopted to give them effect’. Equally the Court referred to Article 18 TFEU, which provides for non-discrimination against EU citizens ‘[w]ithin the scope of application of the Treaties, without prejudice to any special provisions contained therein’.

For people like Ms. Dano, there are no Treaty rules which govern their legal situation, because she was not a worker, and was not a job-seeker or former worker either. Neither was she a self-employed person, service provider or student. Therefore the Court only looked at her position under EU free movement legislation.

But the vast majority of EU citizens in another Member State do fall within one of those other categories – most notably as workers, including job-seekers and former workers. The crucial point here is that all of those other categories of EU citizens have rights not just pursuant to EU legislation, but also pursuant to the Treaties. Indeed, that point is recognised in the very wording of Articles 18, 20 and 21 TFEU: Article 18 defers to the special rules on non-discrimination in the rest of the Treaty, while Articles 20 and 21 defer equally to the Treaties and secondary legislation. The intention of the Treaty drafters is perfectly clear.

So what does this mean for the position of workers? (I’ll concentrate on them, since they are the main focus of the Open Europe proposals). The specific Treaty provision regulating workers’ free movement is Article 45 TFEU, which first specifies that ‘Freedom of movement for workers shall be secured within the Union’. Article 45(2) further specifies that free movement entails the abolition of discrimination between EU workers as regards ‘employment, remuneration and other conditions of work and employment’. Article 46 TFEU then confers powers to adopt legislation ‘setting out the measures required to bring about freedom of movement for workers’. Article 48 TFEU sets out powers to adopt rules to coordinate social security for workers.

The wording of these Treaty articles doesn’t defer to the legislation in order to set out workers’ rights, and this has long been recognised by the Court of Justice. So free movement of workers (and the associated right to equal treatment) has long been recognised in CJEU jurisprudence as a directly effective Treaty right, precisely because it is not dependent on the adoption of further measures. This also means that the CJEU controls the definition of ‘worker’, and extends it to cover also those who are former workers or job-seekers.

Indeed, as recently as this summer, in the Saint-Prix case (discussed here), the CJEU expressly asserted that the definition of former workers (and therefore the access to benefits) as defined in EU legislation didn’t matter, since the Court would determine which former workers still qualified for access to benefits. So the Court ruled that female workers who were former workers at the time when they gave birth still had access to benefits (as long as they got work soon afterward), even though the legislation did not define them as former workers.

So unless the CJEU does a U-turn on this issue, there would be little point in trying to amend the legislation in order to require former workers to wait longer for benefits. At the moment, EU citizens retain worker status, and access to benefits, if they become involuntarily unemployed after working for more than one year in a Member State. If they become unemployed before that point, they retain worker status for a maximum of six months. There are also several other cases where they retain that status.

What about job-seekers who were not formerly employed in the host State? Well, there’s no need to amend EU legislation in order to refuse them some types of benefits, since the EU citizens’ Directive expressly makes clear that they are entitled to no equal treatment as regards ‘social assistance’ at all. However, the CJEU has said (in the Collinscase) that, pursuant to the Treaties, job-seekers cannot be refused equal treatment as regards benefits which are intended to facilitate access to employment. And in the Vatsourascase, it expressly distinguished this type of benefit from ‘social assistance’ benefits which job-seekers are not entitled to pursuant to the citizens’ Directive.

The CJEU will have a chance to clarify the position in the pending case of Alimanovic. It might possibly do a U-turn on this issue in its judgment on that case. If it doesn’t, then again, in order to cut back on such labour-market benefits for job-seekers, a Treaty amendment would be necessary.

Next, as regards workers, the key free movement rule, and the equal treatment right, are laid down in the Treaty itself. When ruling on workers’ equal treatment rights, the Court regularly refers to the Treaty rule and the relevant legislation, and both of these confer equal treatment as regards benefits: see the judgment in O’Flynn, for instance. Since the right to workers’ equal treatment is expressly set out in the Treaties, then removing in-work benefits for workers – the core of the Open Europe proposal – would be manifestly contrary to the Treaties, and would require a Treaty amendment.

Of course, a Treaty amendment is not impossible; it’s simply much more difficult than a legislative amendment. It would most likely take the form of a Protocol which sets out a derogation from the Treaty rules.

Other Open Europe proposals

The Open Europe paper suggests an amendment to EU legislation to specify that EU law cannot derogate from national powers as regards matters such as social assistance. It’s not possible for EU secondary legislation to limit EU powers as defined in the Treaties, but an amendment to EU secondary legislation could refer to such limits. This is my suggested amendment 1 below.

In the context of a waiting period for benefits, the Open Europe paper correctly mentions that the time period spent in detention in the home State for committing offences does not count for this purpose. This rule is set out in the case law, but it could also be added to EU legislation. This is suggested amendment 2 below.

Next, the Open Europe paper suggests a number of protections for national workers as regards unfair competition from other Member States. It is suggested here that the EU posted workers’ Directive provides such protection, but this isn’t always the case. So I suggest an amendment to that Directive in order to overturn the controversial CJEU judgment in Laval (amendment 3).

The specific suggested amendments relating to unfair recruitment standards, living wages et al can best be addressed by amendments to the specific Regulation on the free movement of workers. My suggestions to this end are set out in amendment 4.  

Finally, the Open Europe paper gets round to suggesting some protection for migrant EU workers in areas other than employment, on the grounds that the proposed three-year waiting period for equal treatment ‘might contribute to a sense of vulnerability on their part’. The report’s authors should win an award for their contribution to the great British art of understatement here. One could equally say that the Titanic’s collision with an iceberg might have contributed to a sense of dropping body temperature on the part of its passengers.

Open Europe's specific suggestion is to adopt EU legislation protecting EU migrant workers against discrimination on grounds of nationality as regards supply of goods and services. This is possibly superfluous in light of the non-discrimination rules in the Treaty. But to be on the safe side, I have suggested amendment 5, to the Regulation on migrant workers.

Finally, a number of specific statements in the Open Europe paper need correction or clarification. On page 3, there are more than two ‘important protections’ (for States) as regards exceptions from equal treatment for benefits. Nor is sickness insurance a requirement for all EU citizens, only those who are not workers or self-employed. The Brey judgment (text at note 6) has been effectively overturned by Dano, which was delivered after this paper was published. Equal treatment applies only to those EU citizens who are legally resident. Former workers are entitled to benefits not just in the cases referred to in note 9. On page 9, the CJEU has yet to rule whether Article 31 of the EU Charter of Fundamental Rights creates justiciable rights; this issue is the subject of the pending Fenollcase. It’s an overstatement to say that national law giving effect to Charter social rights is always protected by EU law, as the CJEU judgments in Laval, Viking Line and Alemo-Herronmake clear.

Proposed amendments

Amendment 1

Add a new Article 1(2) to the citizens’ Directive:

This Directive shall not affect Member States’ competence to define national rules on social assistance and social security (including pensions), public health, public education and employment policies, in accordance with the Treaties.

Amendment 2

Add a new sentence to Article 21 of the citizens’ Directive:

Periods spent in prison as the consequence of a conviction for a criminal offence shall not be taken into account.

Amendment 3

Add a new sentence to Article 2(10) of the posted workers’ directive:

In particular, equality of treatment as regards pay shall be assured as regards all collective agreements, whether or not they are covered by the definition set out in paragraph 8.  

Amendment 4

Regulation 492/2011 on the free movement of workers should be amended to add a new Section 1a, ‘Equal treatment of host State workers’, consisting of a new Article 6a:

Member States shall not permit recruitment of or advertising for employment to nationals of other Member States only.

A new sentence should be added to Article 7(1):

The principle of equal treatment in working conditions applies in particular to any rule relating to wages, including a minimum wage or living wage requirement in the host Member State, as well as any rules relating to health and safety.

A new Article 7(5) should be added:

In order to ensure a dignified standard of living for workers exercising free movement rights, Member States may prohibit bonded agreements or tied housing.

Amendment 5

A new Article 7(6) should be added to Regulation 492/2011:

Workers shall enjoy equal treatment without discrimination on grounds of nationality as regards access to and supply of goods and services which are available to the public.

*Note: This would be enforceable in the way that the Open Europe paper suggests, by means of the Directive on enforcement of migrant workers’ rights, adopted in 2014.

 

Barnard & Peers: chapter 13

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Free movement and social benefits for economically inactive EU citizens: The Dano judgment in historical context

 

Géraldine Renaudière, Trainee at the CJEU, within the cabinet of the Court Vice-President, Koen Lenaerts. (This post reflects the author's view only). 

In yesterday’s judgment in Elisabeta Dano and Florin Dano v Jobcenter Leipzig, the CJEU once again addresses the highly sensitive issue of the exclusion by national legislation of economically inactive Union citizens, from special non-contributory cash benefits, although these are provided to nationals of the respective Member States who are in the same situation. One year after its controversial Brey decision, the Court attempts to redefine the relationship between two primordial EU law instruments: Directive 2004/38 on the right of citizens of the Union to move and reside freely within the territory of the Member States (the citizens’ Directive) and Regulation 883/2004 on the coordination of social security systems. The broader political context of the judgment has been discussed in the separate post by Steve Peers, but it is also important to examine the judgment in the historical context of the development of the case-law on EU citizens' access to benefits.

Background

In this regard, it might be noted that although the Maastricht Treaty marked an important milestone in the field of free movement of persons by expanding the right to move and reside freely within the EU (formerly the exclusive preserve of people exercising an economic activity) to all Union citizens, the traditional “economically-oriented” approach has never entirely disappeared from the EU legal landscape. So the right of free movement remains subject to limitations and conditions, as laid down in Articles 20, (2) and 21 TFEU. On several occasions, the CJEU was called upon to clarify those conditions (now specifically provided by Directive 2004/38) while at the same time it had to deal with the closely related issue of the (equal) access for EU citizens to social assistance and minimum subsistence benefits in the State of residence.

The least one can say is that, so far, the Court hardly achieved the right balance between the rights of economically inactive migrants and the legitimate interest of Member States to protect their welfare systems from so-called benefit tourism. Even more, it has caused further confusion regarding the very existence of a “right” to social benefits for European students, retired people or in a particular state of need. The question now is whether the Dano judgment departs from the previous logic and to what extent it ensures greater legal certainty and a fairer balance of the interests at stake.

Judgment

In the case at hand, the Sozialgericht Leipzig of Germany requested a preliminary ruling in a case concerning the refusal from the German authorities to grant Mrs. Dano and her son, Romanian nationals and non-economically active, subsistence benefits, social allowance as well as contribution to accommodation and heating costs. In reply to questions raised by the national judge, the Court starts to recall that such “special non-contributory cash benefits” fall within the scope Article 4 of Regulation 883/2004. This provision, corresponding to the specific expression of the principle of non-discrimination embodied in Article 18 TFEU (applying to Union citizens who invoke in the host Member State such category of social benefits) must however in the present case be interpreted in the light of Article 24 of Directive 2004/38 which sets out an equal treatment rule for Union citizens exercising their right to move and reside freely within the EU territory.

Essentially following the Advocate General’s observations, the Court admits for the first time that when it is apparent that the applicant does not meet the conditions set out in Article 7(1) of Directive 2004/38 (i.e. does not have sufficient resources to meet his own basic needs and the needs of his family) he does not fall within the scope ratione personae of Article 24(1) and (2) of the Directive. Therefore, as far as social benefits are concerned, a Union citizen is not entitled to claim equal treatment with nationals of the host Member State once it is established that his right of residence in the territory of that State does not comply with the conditions of the Directive 2004/38.

Comments

In a series of judgments rendered prior to the entry into force of Directive 2004/38, the usual approach adopted by the CJEU was to consider the right to equal treatment and non-discrimination on grounds of nationality in the host State as the corollary of the status of citizen of the Union, both principles being consecrated by the TFEU (see the Martinez Sala judgment). In that sense, it enabled those who found themselves in the same situation to enjoy the same treatment in law, irrespective of their nationality, and therefore to be granted social assistance benefits (minimexor family benefits) independently of a right to reside and to move freely within the territory of the Member States in the meaning of EU Law (see the Grzelczyk and Trojani judgments). Regarded as a cornerstone of Union citizenship, only restrictive and proportionate differential treatments were deemed acceptable whilst forgetting that Article 18 TFEU additionally requires a situation to fall “within the scope of application of the Treaties”.

Having been criticised for this “too generous” approach, the Court progressively allowed more flexibility to Member States which, depending on the case, could render the access to social benefits for economically inactive EU migrants conditional upon the demonstration of a genuine link to the employment market (Collinsand Vatsouras), a certain degree of integration into the host society by the person concerned (Bidar and Forster) or temporary financial difficulties unlikely to place an unreasonable burden on the State’s public finances (Grzelczyk again).

While this balanced and individual approach is to be welcomed, this case-law, still referring to vague and general concepts and leaving a wide margin of appreciation to national authorities, somewhat undermined the legal certainty and predictability of the Court’s decisions. Yet the Court adopted the same logic in Brey, albeit the issue at stake was a bit more complex. In that case, a compensatory supplement was refused to a retired German national on the ground that he didn’t have sufficient resources to establish his lawful residence in Austria in the meaning of Article 7 (1) (b) of Directive 2004/38 while the benefit requested was listed among the “special non-contributory benefits” provided by Regulation 883/2004.  

According to the Court in its Brey judgment, Member States remain free to determine the conditions to be met in order for inactive EU migrants to receive such benefits, notably having a legal right to reside for more than three months within the meaning of EU law. But paradoxically, when assessing whether such conditions have been fulfilled, national authorities must take into account additional elements, especially the social benefit requested (in this case, intended to ensure minimum means of subsistence of the person concerned: see Skalka) and assess whether being eligible for such benefit could jeopardize the right of residence of the migrant and place an unreasonable burden on the national social assistance system as a whole.

 

In such circumstances, it appeared almost impossible to clearly define the beneficiaries of those special non-contributory benefits. On the contrary, the judgment in Dano (also dealing with the relationship between the Directive and the Regulation, especially in terms of equality of treatment) is much less confusing on that point: Member States can decide to exclude inactive European Union citizens from accessing non-contributory benefits when they do not have a proper right of residence pursuant to Article 7(1) of Directive 2004/38. More importantly, the condition of having sufficient resources not to become an “unreasonable” burden on the social assistance system of the host Member State, is to be appreciated in the light of individual circumstances but without taking into account of the social benefits claimed.

 

By proceeding in this way, the Court clearly distinguishes people who have acquired a legal right of residence of more than three months, but who, owing to circumstances, are temporarily unable to fulfill the necessary conditions, from people who have arrived in a Member State without fulfilling such conditions and are therefore not entitled to rely on equality of treatment to get (unconditional) access to such benefits. Any other interpretation would, in the Court’s view, defeat the object and purpose of the Directive 2004/38 seeking to prevent economically inactive citizens from using the host Member State’s welfare system to fund their means of subsistence.

 

It remains now to be seen whether this last case, beyond the legal clarification, will put an end to the practical difficulties which might result from the interpretation of concepts such as “sufficient resources” or “unreasonable burden” (when the very right of residence within EU law is contested or when financial issues of the inactive migrant are no longer “temporary”…) and whether, in practical terms, a fair and reasonable balance between EU inactive migrants’ rights and Member States’ legitimate interests has finally been achieved…

 

Barnard & Peers: chapter 13, chapter 16

 

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Benefit Tourism by EU citizens: the CJEU just says No

 

 

Steve Peers

 

The CJEU has today delivered a pivotal judgment in the case of Dano, concerning access to social welfare benefits by EU citizens who move to another Member State. The Court's approach to the issues in this case (and other judgments on EU citizens with criminal convictions, decided earlier this year) is stricter than usual, so we can deduce from this that it is taking account of the broader political debate on the free movement of EU citizens. However, some aspects of the issues remain to be clarified in later case law.

 

The judgment

 

Mrs. Dano is a Romanian citizen who applied for job seekers benefits in Germany. She has not worked in Germany, and is not looking for work either.

 

The type of benefit she was applying for is a 'special non - contributory benefit' under the EU regulation on social security regulation. Also, the EU citizens' Directive provides that EU citizens are entitled to equal treatment regarding benefits on the territory of another Member State, except during their first three months of entry, if they are job-seekers or if they are seeking student grants before five years residence.

 

The CJEU said that these exceptions to the equal treatment rule did not apply to Mrs. Dano. However, the Court then ruled that she could nevertheless not invoke the equal treatment rule, since she did not qualify to be covered by the citizens Directive in the first place.

 

The directive applies to workers, self employed persons, students and others who have sufficient resources. While Article 8(4) of the Directive seems to provide for some flexibility as regards what might be considered as sufficient resources, the Court definitively rules that Mrs Dano doesn't have them. Indeed, the Court ruled firmly that the requirement in question 'seeks to prevent economically inactive Union citizens from using the host Member State's welfare system to fund their means of subsistence'.

 

While previous judgments had relied upon the equal treatment rules in the Treaties to suggest that impecunious EU citizens might still be entitled to benefits, today the Court ruled that unequal treatment was an 'inevitable consequence' of the EU rules.

 

Finally, the Court ruled that the EU's Charter of Fundamental Rights was not applicable, since the rules on access to special social security benefits fall outside the scope of the relevant regulation.

 

Comments

 

Earlier this year, the CJEU rule in the cases of G and Onuekwere that EU citizens who were sentenced to prison in a host Member State could not count the period of imprisonment either towards the five-year period needed to qualify for permanent residence in the host Member State or the ten year period needed to qualify for further enhanced protection against expulsion. The judgments were delivered shortly after the transition period on the free movement of Romanians and Bulgarians ended, at a time of great public debate about the free movement of EU citizens in the UK.

 

That debate has increased further since. The Court judgment in Dano provides a clear rejection, as compared to the prior case-law, of access to benefits by those who have never worked and who are not looking for work. In particular, in this judgment the Court now defers to the EU legislature and accepts the limits on access to benefits set out in the EU Directive, rather than insist (as it did before) that any legally resident EU citizen can in principle claim equal treatment as regards access to benefits based on the Treaties (On this point, see further the separate blog post on the historical context of the judgment).

Since the EU legislature is now in charge of access to benefits by EU citizens, it is more easy to amend the relevant rules to tighten them up, since amending the citizens' Directive would only need a Commission proposal and a qualified majority vote in the Council and agreement of the European Parliament. If access to benefits were still defined by the Treaties, then only a Treaty amendment could change the relevant rules, requiring agreement of all Member States and ratification by national parliaments. The judgment has therefore facilitated a possible renegotiation of the EU free movement rules on this issue, and more broadly a renegotiation of the UK's membership of the EU.

 

However, it leaves open the question of what restrictions might be placed on job-seekers or former workers' access to benefits or students' access to grants. Nor does it impact upon the strong obligation to give equal treatment to those who are working. As recently as June, the CJEU insisted in the Saint-Prix case (see discussion here) that it (and not the EU legislature) would still determine the meaning of 'worker', including former workers (as well as job-seekers, according to previous case law).

 

Furthermore, the judgment doesn't as such address the possible expulsion of persons in Mrs Dano's situation, still less the prospect of denying her re-entry. As I have pointed out before, the citizens Directive places considerable constraints on the former, and does not permit the latter. (See now also my separate blog post on the question of whether this judgment affects expulsion of unemployed EU citizens).

 

So it doesn't address some of the key issues in the debate. Nor could it address the question of whether a Member State could introduce quotas for workers coming from other Member States. That is clearly illegal under EU law as it now stands.

 

Having said that, the Court judgment sends a clear message that Member States can act against at least the most blatant types of benefit tourism. The tone of the judgment suggests that the CJEU's judges, as Americans say, read the morning papers.

 

 

Barnard and Peers: chapter 13, chapter 16

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Non-EU benefit claimants and implications for the EU's relations with Switzerland

Steve Peers

Even the most xenophobic of British tabloids is unlikely to greet today's judgment of the Court of Justice of the European Union (CJEU) with the headline, 'Scrounging Swiss'. Yet the judgment, concerning the correct legal base of an EU measure extending revised social security rules to Swiss citizens, raises interesting questions concerning the extension of social security rules to third states in general, and on the EU's relations with Switzerland in particular.

Background

This the second in a series of three cases (to date) in which the UK has challenged the 'legal base' of Council Decisions which establish the EU's position as regards the extension of revised EU rules on social security coordination to particular third countries. The first case (C-431/11, UK v Council) concerned the European Economic Area (EEA), a treaty extending the EU's internal market to Norway, Iceland and Liechtenstein. The UK lost that challenge in September 2013. This case (C-656/11, UK v Council) concerns the extension of those social security rules to Switzerland, pursuant to the EU's free movement agreement with that country. A third case, still pending (C-83/13, UK v Council) concerns the extension of those rules to Turkey.

In all these cases, the Council has taken the view that the correct 'legal base' for its decision is Article 48 TFEU, which concerns the coordination of social security for employed and self-employed workers within the EU. Since the Treaty of Lisbon, this has provided for a qualified majority vote, although a Member State can pull an 'emergency brake' on proposed legislation if it believes that 'important aspects' or the 'financial balance' of its social security system will be affected by the proposal in question. The UK, on the other hand, has argued that the correct 'legal base' for these measures is Article 79 TFEU, which concerns the EU's common immigration policy.

This provision gives the UK (along with Ireland and Denmark) an opt-out. The UK intended to use this opt-out to reduce the cost of the provision of foreign benefits, although the total amount of the benefits paid out is surely not enormous. It may even be less than the cost of bringing this litigation.

It should be noted that the Council has taken a number of other decisions regarding social security rules for associated countries, based on Article 79 TFEU as the UK has advocated. In the Commission's view, set out in an interesting communication on social security and third countries, Article 48 should be used where the EU has a particularly close association with the country concerned, but otherwise Article 79 should be used.

Judgment

In the previous judgment concerning the EEA, the Court ruled that Article 48 TFEU had to be used because: the EEA was a particularly close association between the EU and the countries concerned; the decision aimed to extend the whole EU internal market to those countries; the relevant provisions of the TFEU and EEA treaty were the same; the EEA has particular rules on the legal effect of EEA law; the decision also applied to EU citizens in the third countries concerned; the decision merely updated prior commitments; and it would be difficult to ensure free movement in the event of parallel regimes. Article 79 TFEU could not be used, because it was 'manifestly irreconcilable' with the context and objectives of the EEA.

Most of those points were unique to the EEA, and so the UK had hoped that the previous judgment could be confined to its facts. However, the CJEU extended this case law to cover the EU/Swiss decision as well. It reasons were that: Switzerland has a 'vast' number of treaties with the EU which aim to strengthen the EU/Swiss economic relationship, even though the Swiss had voted not to participate in the EU internal market, via means of the EEA; the EU/Swiss treaty has the same wording as Article 48 TFEU; and the decision simply extends the revised EU rules to the third country concerned. 

The CJEU also ruled that Article 48 TFEU can apply to third-country nationals where an association agreement (which was the basis for the approval for the 'package' of seven EU agreements with Switzerland, in 1999) has already extended EU social security rules to the country concerned, and the decision in question merely aims to update the references concerned. Finally, the CJEU rejected the UK's argument that Article 48 could not apply to the rules on social security for those Swiss citizens not exercising economic activities (who are outside the scope of Article 48), on the grounds that this aspect of the new decision was purely ancillary to the rules on employed and self-employed persons.

So Article 48 TFEU can apply even if the relationship is not as special as the EEA, does not extend the full internal market to the country concerned, and does not contain the particular rules on the legal effect of EEA law. The most recent judgment makes no reference to the complication of having parallel regimes either. Moreover, the UK's best argument - that third country nationals not exercising economic activities were beyond the scope of Article 48 TFEU - has now been shot down by the Court.

It is surely likely, by analogy with this judgment, that the UK will lose its challenge to the Council decision regarding social security for Turkish citizens. Moreover, the Coumcil's decisions relating to social security for other associated third countries, based on Article 79, might even be legally questionable. This is because the Court's judgment today could be understood to mean that the implementation of any specific aspects of the EU's association agreements involve the use of the relevant legal base relating to internal EU law - given that, as the CJEU has always held, all association agreements aim to extend aspects of the EU's internal law to the third country concerned (Case 12/86 Demirel).

Broader implications

The CJEU makes no reference to the recent Swiss referendum, which established a legal requirement for the Swiss government to renegotiate the free movement treaty with the EU within three years, to establish a possible quota on free movement. Of course, the judgment does not concern termination of the EU's treaties with Switzerland, but rather their implementation. But it implicitly rejects any argument that the Treaty provisions on association agreements (now Article 217 TFEU) must always be used for decisions relating to such agreements. The Advocate-General's opinion in the previous EEA social security case had argued that Article 217 had to be used, but the Court did not follow that view.

It is therefore arguable that the EU could decide to denounce one or all of the other treaties in the 1999 package based on the particular legal base for the treaty concerned - such as the transport legal base for the treaty on aviation, for instance. If this is correct, most or all of these decisions to denounce could be taken by a qualified majority vote, so this would strengthen the EU's negotiating position with Switzerland when it comes time to renegotiate the main treaty on free movement of persons. It cannot be forgotten that the EU and the Swiss agreed in 1999 that the seven agreements were a package - and that the denunciation of one treaty would mean the denunciation of all of them.


Barnard & Peers: chapter 24

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