Free Movement and Non-discrimination in an Unequal Union

Susanne Schmidt, Michael Blauberger, Dorte Martinsen

• Publisher: Routledge
• Year: 2020
• eBook ISBN: 9780429684357
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

The European Union's (EU) fundamental principles on free movement of persons and non-discrimination have long challenged the traditional closure of the welfare state. Although EU-wide free movement and national welfare appeared largely unproblematic before Eastern enlargement, the increased differences among EU member states in economic development and welfare provision have resulted in fears about potential welfare migration. Because rights of EU citizens were shaped to an important extent by jurisprudence of the European Court of Justice, these are often not very clearly delineated, and easily politicised.

This comprehensive volume shows the normative limits of a strict non-discriminatory approach to EU citizens' access to national welfare and analyses how the Court developed its jurisprudence, partly reacting to politicisation. Although, empirically, free movement negatively impacts national welfare only under extreme conditions, it is notable that member states have adjusted their social policies in reaction to EU jurisprudence and migration pressure alike. Their heterogeneous institutions of national welfare, administration and labour markets imply for member states that they face very different opportunities and challenges in view of intra-EU migration.

This book was originally published as a special issue of the Journal of European Public Policy.

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Free movement and equal treatment in an unequal union

Susanne K. Schmidt, Michael Blauberger and Dorte Sindbjerg Martinsen

ABSTRACT

The European Union’s (EU) fundamental principles of free movement of persons and non-discrimination have long challenged the traditional closure of the welfare state. Whereas the relationship between the EU and the welfare state appeared largely reconciled before the grand enlargement of 2004, economic downturn and politicisation question the nexus anew. This collection explores the current dynamics, scope and limits of free movement and welfare equal treatment for EU citizens on the move. The different contributions bring together the normative, legal and political developments and about-turns which dynamically square the circle of pan-European social solidarity. The collection covers the new politics of EU cross-border welfare but also the structuring role of the European Court of Justice. It includes the political economy of free movement as well as its outputs and outcomes in selected member states. Finally, it analyses the mechanisms that activate attitudinal polarisation on intra-EU migration and welfare.

Introduction

The free movement of workers is a cornerstone of European integration. Over time, it has been extended to EU citizens more generally and infused with equal treatment rights. Yet, equal treatment and free movement itself have come under challenge. Since Eastern enlargement and particularly after Bulgaria and Romania reached full free movement rights in 2014, the potential of welfare migration is contentiously discussed. In the Brexit referendum, the issues of exempting recently settled EU citizens from social benefits or even limiting their settlement fared high. While the British situation was unique, the potential of politicisation of free movement rights is evident. In fact, the European Union is exceptional among all regional organisations in granting wide-ranging free movement rights among its member states, and this in a context where some of the member states have the most developed welfare states worldwide. Geddes and Hadj-Abdou describe it as ‘a radical experiment in open borders (…) uneasily coupled with a continued attachment in member states to social solidarity and cohesion associated with national welfare states’ (Geddes and Hadj-Abdou 2016: 222). This experiment takes place in a political system with a manifest status-quo bias in its policymaking, backed by a high degree of judicialisation of decision-making, while facing increased politicisation and economic heterogeneity.

Due to enlargement and economic crises that are fuelled by the uneven working of the Euro-regime, the differences among EU member states in economic development and welfare provision have increased and, therefore, also has the potential for welfare migration. While numbers of inner-EU mobility were traditionally low, they have been increasing in recent times. Moreover, the integration process has always been characterised by judicialisation, where important impetus stems from rulings of the European Court of Justice (ECJ). Its citizenship jurisprudence has strived to create direct bonds between EU citizens and the Union, by strengthening equal rights not only for those employed, but also for economically inactive EU citizens. Rulings of the Court created significant adjustment pressures for member states’ social policies. While the Court has recently strengthened member states to potentially restrict social benefits for economically inactive EU citizens and newly arrived jobseekers, the question of who qualifies as a worker has become all the more important – with ECJ case law mandating that this status and, accordingly, full equal treatment may apply for those just working 5.5 h a week, as the prerequisite is that work is not only ‘marginal and ancillary’. However, on comparison, national implementation of this judge-made concept differs widely (O’Brien et al. 2016).

In general, EU citizens move to other member states in order to work. As most are of working age, they in general contribute more to their host countries than they consume in the form of public services and benefits (Dustmann et al. 2010; Martinsen and Pons Rotger 2017). Yet, broad non-discrimination rules can also be subject to exploitation, either in terms of setting individual incentives for benefit support, as may happen, for instance, for students studying in another member state, but in part also for organised welfare abuses. There is limited evidence for welfare migration or welfare abuses, but even low absolute numbers carry great risks of being politicised. As this may harm the legitimacy of the political system of the EU and its member states, concerns have to be taken seriously. Next to the British upheaval, we do in fact observe reforms of social rights and residence rules targeting EU citizens in several member states. Responses are, however, diverse, as the type of welfare state, administrative cooperation, the political economy of labour markets, but also the conditions in the home country, and language similarities all play a role.

The collection analyses a crucial topic for modern European societies: how to reconcile free movement rights and equal treatment on one side with the traditional closure of the welfare state on the other side. As rights to non-discriminatory access to social benefits for EU citizens are much settled by case law, the collection also contributes to a further understanding of the way case law of the European Court of Justice structures national policies as well as administrative practice. The collection brings together the normative, legal and political content and contestation of free movement and welfare equal treatment. It assembles articles discussing the normative and legal basis of EU citizenship, free movement and cross-border access to social benefits; the politicised discussion of welfare migration in the media and its impact on the jurisprudence of the European Court of Justice; as well as contributions examining the theoretical and empirical nexus between Union free movement and its reconciliation with the welfare state’s need for closure.

Legal framework

The four freedoms, covering goods, services, persons (comprising the free movement of workers and of establishment), and capital are the building blocks of the single market, and with it of one of the central achievements of European integration. Right from the start, the free movement of workers became relevant, with Italy being interested in the export of workers, and the other member states being able to take in surplus labour into their growing economies. Already in 1958, regulations No. 3 and 4 set down first rules for the coordination of social security for migrant workers. It is on this basis that the current regime of regulations 883/04 (formerly 1408/71) and 492/2011 (formerly 1612/68) evolved. As member states did not want to relinquish the responsibility for their welfare systems, the EU only coordinates the responsibilities and rights. In general, the regulations establish the principle of ‘lex loci laboris’, implying that a person is covered by the system where he or she works (Christensen and Malmstedt 2000). If country of work and residence are not the same, the latter has some residual responsibilities. By contrast, the country of residence is responsible for those that are economically inactive. Whereas the contributory benefits of regulation 883/04 are portable, social assistance benefits are not.

The revisions of these regulations on the coordination of social security reflect not only the changing world of labour and of welfare, but also the importance of the ECJ rulings in this area. As the arbiter not only for the interpretation of the regulations, but also of the free movement right in the Treaty, the Court has repeatedly expanded rights, which member states were eager to restrict for EU workers. Importantly, when the ECJ interprets the Treaty, this interpretation becomes part of the Treaty, and thereby influences subsequent legislation (Schmidt 2018). In this way, the Court set out in the 1980s that the privileged status of the free movement of workers applies as soon as work is not ‘only marginal and ancillary’, so that it covers also those persons that work few hours and cannot meet the needs of their subsistence (C-53/81 Levin). At the same time, EU member states have also sought to use legislation to contain cross-border welfare where the Court’s jurisprudence left them with room for manoeuvre (see the amendments of regulation 1408/71 by regulation 27/93 and 1247/92. See also the citizenship directive’s Article 24(2); Martinsen 2015).

EU citizenship was introduced with the Treaty of Maastricht. Originally, this was more of a symbolic addition, as member states clearly did not want to renounce the sovereignty over their citizenship regimes. Article 21 TFEU grants ‘the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect.’ Despite the explicit reference to secondary law, from the late 1990s onwards, the Court has shaped the EU citizenship regime with its judgments. Famously, in Grzelczyk (C-184/99) the Court ruled: ‘Union citizenship is destined to be the fundamental status of nationals of the Member States’ (para 31). The citizenship directive that was agreed shortly before the Eastern enlargement of 2004 provides the secondary law to these rights. During the first three months, EU citizens can freely reside in other member states. After five years of legal residence, they have the right to permanent residence and to be treated equally with the hosting member states’ own nationals. For those in between these thresholds, the directive failed to provide clear rules. On the one hand, citizens have to be financially self-sufficient and have their own health insurance. On the other hand, member states cannot automatically expel those in need (Article 14(3)). This reflects the existing case law of the Court that the EU legislator could not overrule but aimed to tame by adding preconditions (Wasserfallen 2010). Thus, in Grzelczyk benefits were granted after three years, and the Court generally emphasized that member states needed to assess eligibility individually, with view to the integration into the host member state. However, at the same time, the citizenship directive specified that member states were not obliged to pay study grants to EU citizens who are not workers, self-employed or their family members before permanent residence, i.e., five years of residence (Article 24(2)). The judicial and political reading of the scope and limits of EU rules on cross border welfare appear to be an ongoing battle.

As we will see in the contributions in this collection, the existing legal uncertainty relating to the (un)equal treatment of EU citizens’ resulted in many court cases and quite diverse approaches in EU member states, depending on the precise shape of their welfare system, political and administrative responses, access to domestic courts, and the willingness of judges to take up European law and possibly refer cases to the ECJ. Alongside the growing political contention as to welfare migration, the ECJ appears to have stopped its expansion of rights since late 2014, giving more scope to member states to protect their welfare systems from those entering member states and not being economically active (C-333/13 Dano).

The role of the ECJ: normative assessment and empirical analysis

The crucial role played by the ECJ in interpreting and re-balancing free movement and equal treatment is a recurrent topic across the contributions to this collection. The Court has long been hailed as an ‘engine of integration’ or criticised for ‘judicial activism’ and its recent turn on EU citizenship is enlightening for this debate, both from a normative and from an empirical-analytical perspective.

While the ECJ’s ability to promote ‘integration through law’ is often implicitly endorsed by EU scholars, it has also triggered significant normative debate about the right balance of judicial and political decision-making in the EU’s political system. The Court’s interpretation of EU citizens’ individual rights is at the core of these debates. On one side, judicialisation is regarded as essential for protecting and extending individual rights and, thus, for promoting liberal democracy in the EU (Kelemen 2013). On the other side, due to an asymmetry between judicial and political decision-making, the EU is said to be biased towards individual rights and to undermine the political autonomy and republican legitimacy of its member states (Scharpf 2009). Given the high hurdles for changing ‘over-constitutionalised’ (Grimm 2015) EU Treaty law politically, much depends on European judges themselves and what particular balance they strike between EU citizens’ individual rights and national political autonomy, e.g., regarding welfare policies.

The ECJ’s case law on EU citizenship is commented upon extensively by EU legal scholars in terms of legal coherence and with regard to its broader desirability – the latter, however, often without the underlying normative theory being made explicit. In their contribution to this collection, Bellamy and Lacey (2018) systematise and discuss different normative accounts of the relationship between European and national citizenship as well as their implications for welfare rights. Transnationalists and supranationalists, they argue, ultimately aim at transforming national into Union citizenship in order to overcome problems of arbitrary exclusion of non-nationals. By contrast, Bellamy and Lacey emphasise the parallel problem of arbitrary inclusion of non-nationals, for instance, with regard to non-contributory welfare benefits, and insist on the continued relevance of national citizenship and national political communities. They propose a demoicratic approach, intended to preserve the ‘advantages of national citizenship while overcoming many of its disadvantages’ (Bellamy and Lacey 2018) for non-nationals with a perspective to ‘stakeholdership’ abroad. For this the ‘willingness and capacity to contribute to the socioeconomic fabric of the receiving state’ (Bellamy and Lacey 2018) is decisive. Their approach provides a normative yardstick to critically assess the Court’s teleological jurisprudence, proclaiming EU citizenship to be ‘destined to be the fundamental status of nationals of the member states’ (Grzelczyk), while showing greater deference to a complementary conception of EU citizenship and to the political intentions behind EU secondary legislation.

From an empirical-analytical perspective, the Court’s recent turn on citizenship is equally interesting as it offers new insights to an established debate around the question: to what extent is the ECJ independent from or respon...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Citation Information
• Notes on Contributors
• 1 Free movement and equal treatment in an unequal union
• 2 Balancing the rights and duties of European and national citizens: a demoicratic approach
• 3 ECJ Judges read the morning papers. Explaining the turnaround of European citizenship jurisprudence
• 4 Has the Court changed, or have the cases? The deservingness of litigants as an element in Court of Justice citizenship adjudication
• 5 Worker mobility under attack? Explaining labour market chauvinism in the EU
• 6 Institutional contexts of political conflicts around free movement in the European Union: a theoretical analysis
• 7 Responding to free movement: quarantining mobile union citizens in European welfare states
• 8 Failing on the social dimension: judicial law-making and student mobility in the EU
• Index