EU Free Movement as a Legal Construction – not as Social Imagination

Daniel Thym

Monetary union demonstrates that some EU projects are realised without preparation for all eventualities. In the case of the euro, the financial crisis revealed lacunae in the field of economic and budgetary supervision, which the euro countries had to bridge through the introduction of new instruments. In the case of Union citizenship the legal gaps are less dramatic, but nonetheless visible – in particular with regard to access to social benefits for persons who do not work. It was these uncertainties that the European Court of Justice (ECJ) had to confront in the Dano judgment of last Tuesday. It opts for a surprisingly conventional solution, which abandons earlier attempts to conceive of Union citizenship as a projection sphere for political visions of a good life and just society.

The European Court of Justice as Legal Technician

A reminder of the debate about the Free Movement Directive demonstrates the absence of clear political guidance. Initially, the EU Commission had suggested to lay down explicitly that Union citizens who do not work should not have access to social benefits during the first five years of their stay in another EU country (Art. 21.2). It later abandoned the project after the ECJ had ruled in Grzelczyk that similar provisions on study grants do not pre-empt recourse to the Treaty guarantee of non-discrimination. As a result, the final version of the Free Movement Directive reiterated existing Treaty rules, whose precise bearing for people like Ms Dano remained unclear. Otherwise put, there was never a positive political agreement at EU level on the status of Union citizens who do not work. This shifted the responsibility upon judges to resolve open questions.

Judges in Luxembourg used this room for manoeuvre for progressive decisions on various occasions. Judgments such as Grzelczyk, Martínez Sala, Collins, Trojani, Bidar, Vatsouras and Ruiz Zambrano constitute the most ambitious and tantalising line of case law in recent memory. They are characterised by an attempt to breathe life into the abstract Treaty provisions on Union citizenship by granting equal access to social benefits for various categories of economically inactive citizens irrespective of the limits laid down in secondary legislation. It would have been possible for the Court to decide the Dano case differently under recourse to the argumentative arsenal of these judgments.

That did not happen. For more than a decade, the ECJ had ignored the arguments put forward by his most outspoken academic critic, Kay Hailbronner – but they now dominate its reasoning on why citizens like Ms Dano cannot claim social benefits. This presents us with a noteworthy shift of emphasis from a promise of equality inherent in EU citizenship towards the ‘limitations and conditions’, which primary law had always provided for (Art. 21.1 TFEU). Judges abandon the aspirational underpinning of the citizenship concept to the benefit of conventional doctrinal arguments such as the wording or the systematic structure. In short, the Court turns into a legal technician.

Anuscheh Farahat criticises the Court’s outcome and, yet, she follows a similar path as the ECJ, when she argues that the technical rules on inter-state social security coordination mandated a different outcome. It is not convincing to maintain that this specialised field of secondary law should have defined the answer, not least since doing so would have required the Court to disconnect the interpretation of the non-discrimination principle in Article 4 of Regulation (EC) Nr. 883/2004 from primary law. A fundamental question, such as this one, should be answered primarily on the basis of the EU Treaties and the citizenship concept – even by those who disagree with the Court’s conclusion.

It seems to me that the outcome of the Dano case is no coincidence. Judges in Luxembourg are not autistic and listen to the general political context. The Pringle judgment on the compatibility of the ESM Treaty with the rules on monetary union was a case in point – and the same held for the Förster ruling, in which the Court shied away from open conflict with the EU legislator, when it accepted a five-year waiting period for access to study grants for incoming EU students in line with the Free Movement Directive. The Grand Chamber deciding the Dano case will have considered potential implications of its judgment for the overall support for the integration project at a time, when eurosceptic political parties are on rise across the continent, not only in the United Kingdom. Continue reading

A Spring in the Desert: the German ECJ Reference on the ECB Bond Purchases

Daniel Thym

Among domestic commentators, the initial response was amazement: the reference by the German Constitutional Court was perceived as a sensation and turning point. My reaction is more moderate. Judges in Karlsruhe recognise their limits and try to push the ECJ in their direction. This appears to be ground-breaking against the background of widespread media hype only. In principle, it is regular business. Judges in Karlsruhe boldly go where almost 2000 German courts, the regional Constitutional Court of Hesse and highest courts from other Member States had gone before.

By following their example, the Federal Constitutional Court (FCC) recognises reality. Its position is not much different from Angela Merkel, the German Bundesbank and the Parliament. Without German involvement, euro rescue operations cannot succeed – and yet German state organs are not in a position to shape events single-handedly. In this respect, the reference for a preliminary ruling is nothing unusual and reflects the wider state of European affairs. It is quite telling that the domestic debate in Germany perceives as a sensation what is (or rather: ought to be) utterly self-evident.

Most importantly, the reference changes the legal setting. Instead of grounding the argument on the German constitution, the rules for monetary union in the EU Treaties take centre state (which the justices in Karlsruhe had ignored intentionally in earlier rulings on euro rescue operations). One may disagree how to interpret these provisions, but there is no reasonable doubt that the ECB has to comply with the prescriptions in the EU Treaties. Detailed rules in Articles 119-135 TFEU and related protocols are the appropriate standard for ECB action, not the so-called eternity clause of the German constitution, the Grundgesetz, upon which the FCC had relied hitherto.

This change of legal context has not been paid adequate attention by Justice Gertrude Lübbe-Wolff in her otherwise excellent dissenting opinion, which may soon become a must-read for students of constitutional law on the limits of judicial review (the FCC has promised to publish an English translation). She is right to criticise the majority for having embarked upon a tour of the desert, which was bound to fail from the beginning. Contrary to her suggestion, there is a spring in the desert, which justices may head for – although they refused to see it until last week: the ECB must comply with the rules of the EU Treaties and it is the responsibility of the ECJ to guarantee that they are respected. Judges in Karlsruhe should be applauded for having recognised this. Continue reading