Ruling on ‘benefit tourism’ highlights challenge of free movement

As the controversy over the Luxembourg Leaks scandal continued to overshadow Jean-Claude Juncker's first 10 days as European Commission president, there was at least some reprieve for him this week. On Tuesday the European Court of Justice delivered a ruling that may benefit the Juncker team in what will arguably be one of its biggest challenges – a possible British referendum on EU membership.

By ruling that a Romanian woman living in Germany was not entitled to full social welfare benefits because she was not deemed to be "economically active", the EU's highest court gave clarity to an issue that has been mired in confusion. Migration, and in particular free movement rules, have emerged as a lightning rod for anti-EU sentiment in recent years, and not just in Britain.

Immigration was one of the decisive issues for voters in the European elections six months ago, with anti-immigration parties witnessing a surge in support, including in some of the bloc's largest countries such as Britain and France.

Real concern

Uncomfortable as it may be for liberal Europeans, free movement has become a real concern for a significant minority of citizens, and one that is threatening to shape the policies of more mainstream parties, as evidenced in the British Conservative Party’s anti-immigration rhetoric.

That Tuesday’s ruling referred to a case in Germany indicates a level of dissatisfaction at EU free movement rules in one of the EU’s most pro- European countries.

While "benefit tourism" is not a serious political concern for Irish voters, Ireland is part of a subset of member states that are keen to gain more clarity on the limits and legality of EU free movement rules.

This is despite the fact that the Irish government is generally perceived as a strong advocate of EU migration, as evidenced by former minister for justice Alan Shatter’s intervention in a closed-doors justice ministers’ meeting in Brussels earlier this year in which he passionately defended the principle of free movement.

Nonetheless, within the EU there is an obvious divide between countries in central and eastern Europe whose citizens tend to migrate westwards to other EU member states, and "older" member states, including Ireland, who host many thousands of migrants. As one EU official says, "there is a sense among the northern countries that the EU Free Movement Directive is being interpreted in ways that were never foreseen. It's a highly complex area".

Tuesday’s judgment was an important step in the debate over free movement. In particular, the case reveals the complex overlap between EU law and national social security systems that lies at the heart of the “benefit tourism” debate. As the European Commission has consistently pointed out, the Directive on Free Movement already contains specific limits and boundaries on free movement.

In particular, it states that, after three months, EU citizens can only reside in another EU country if they fulfil certain conditions – they must either be in employment or full-time education, must be seeking employment and have a “genuine chance” of securing work, or have sufficient financial means to support themselves so as to not become a burden on the host country’s social assistance system.

‘Actively seeking work’

Tuesday’s judgment in many ways simply underlined what was already in place in EU law by ruling that the Romanian woman in question was not “actively seeking work” and hence could not qualify as a resident in Germany.

What the ruling underlines is that it’s up to individual member states to ensure that their social welfare systems – which vary considerably from country to country – are in compliance with EU free movement rules.

The very different approaches of Germany and Britain in tackling the challenges generated by EU free movement rules is revealing.

Germany, both under Angela Merkel and the previous Gerhard Schröder government, has been quietly tightening up welfare benefit rules within the existing EU free movement directive, while all the time maintaining a genuine commitment to the principle of free movement.

Britain, in contrast, has erroneously laid the responsibility for its frustrations at the door of Brussels, with prime minister David Cameron calling for fundamental changes to EU free movement rules and caps on immigrants that can never be delivered.

Instead of working constructively with like-minded member states to refine and clarify EU free movement laws within the existing treaties, Cameron has again isolated himself on EU matters at a delicate time in British-EU relations.