By Gijsbert Vonk
Case-note on C-333/13, Elisabeta Dano v Jobcenter Leipzig
The Dano case goes right to the heart of the debate on social tourism. Are economically inactive EU-citizens, residing in a Member State of which they are not a national, entitled to social assistance which is granted to nationals of that host Member State? Directive 2004/38/EC (the EU Citizenship Directive) does not oblige Member States to provide for such assistance, but Art. 18 TFEU, Regulation 883/2004 on the coordination of social security and the Charter of Fundamental Rights might do so in the end. These were the elements at stake in the Dano case.
In Germany, foreign nationals are excluded from social assistance for jobseekers (the so-called Grundsicherung für Arbeitsuchende according to Book II of the German Social Code, Sozialgesetzbuch Zweites Buch) when they enter the national territory with a view to obtaining such social assistance or when the right of residence arises solely from the search for employment. In the Dano case a Romanian citizen, Ms Dano, was refused the Grundsicherung für Arbeitsuchende exactly for that reason.
Ms Dano is currently staying with her son in Germany. She is not seeking employment, nor has she been trained in a profession and, to date, she has never worked in Germany or Romania. They live with Ms Dano’s sister, who provides for them. But is Germany’s refusal to grant the Grundsicherung to Ms Dano in line with EU law? That question was referred to the Court of Justice (CJEU) for a preliminary ruling.
According to the CJEU, the EU Citizenship Directive does not oblige the host Member State to grant social assistance during the first three months of residence. Where the period of residence is longer than three months but less than five years, as in the present case, one of the conditions which the Directive lays down for a right of residence is that economically inactive persons must have sufficient resources of their own. The Directive thus seeks to prevent economically inactive Union citizens from using the host Member State’s welfare system to fund their means of subsistence. A Member State must therefore have the possibility of refusing to grant social benefits to economically inactive Union citizens who do not have sufficient resources to claim a right of residence and who exercise their right to freedom of movement solely in order to obtain another Member State’s social assistance. For this purpose, each individual case must be examined without taking account of the social benefits the EU citizen claims in the host Member State. What is more, the EU Charter of Fundamental Rights is not considered to have bearing on the situation of Ms Dano. According to the CJEU, when the Member States lay down the conditions for the granting of special non-contributory cash benefits and the extent of such benefits, they are not implementing EU law. Hence the Charter is not applicable.
The conditions under which EU nationals can claim non-contributory benefits have always been a contentious issue. During the last years the discussion about ‘social tourism’ has flared up again and as a result each step the CJEU takes is watched with eagle eyes both by the Member States, which fear intrusions in their (presumed) autonomy to block access to rights, and by the European Commission, which valiantly defends and promotes the freedom of movement of persons. In this ruling, the CJEU reaffirms the restrictive conditions for economically non-active citizens applying in the EU Citizenship Directive, which is the main directive on the freedom of movement. Member States will welcome this judgment with great relief, in particular those which are trying to cope with an increasingly disgruntled home front, feeding on nationalist and anti-European emotions.
As such the EU Citizenship Directive makes it quite clear that economically inactive persons with insufficient resources of their own cannot claim benefits, at least during the first five years of their stay in another Member State. In the Dano judgment the CJEU simply reaffirms the restrictions that apply to this group. Nonetheless, the outcome of the case is not as straightforward as the text of the Directive suggests. There are two reasons for this.
Relevance of Art. 18 TFEU and Regulation 883/2004?
First, the CJEU regularly “intervenes” in the system of Directive 2004/38/EC on grounds of the overriding principle of EU citizenship enshrined in Art. 18 TFEU. Examples of such interventions are the cases of Trojani (granting a right to social assistance as long as the national residence title is not withdrawn), Vatsouras and Koupatanze (granting a right to receive jobseeker’s allowances for EU citizens who genuinely seek employment) and Brey (prohibiting an automatic rejection of benefit rights on grounds of a person having insufficient resources of his own).
The second reason is Regulation 883/2004 on the coordination of social security. This regulation does not apply to social assistance as such, but it contains a special regime for “special non-contributory cash benefits” (such as jobseeker’s allowances, certain benefits for the handicapped and income guarantees for the elderly). Such benefits do not have to be exported (meaning that they are excluded from the export principle), but they can be claimed in the host Member State. Unlike the EU Citizenship Directive, this Regulation does not contain restrictive conditions for economically inactive persons without sufficient resources of their own.
It is precisely with reference to these two reasons that the Sozialgericht in Leipzig asked the CJEU for a preliminary ruling. Nevertheless, the CJEU skilfully manoeuvres around the possible guarantees included in its own case-law on European citizenship and the ones triggered by Regulation 883/2004 on social security coordination. The Court interprets Regulation 883/2004 in conjunction with the restrictive provisions laid down in the EU Citizenship Directive. In particular, the CJEU holds that
“there is nothing to prevent the granting of such benefits to Union citizens who are not economically active from being made subject to the requirement that those citizens fulfil the conditions for obtaining a right of residence under Directive 2004/38 in the host Member State” (par. 83).
This element had been previously developed in the Brey case. Nevertheless, other implications of the latter case remain undiscussed in Dano, in particular the finding of the Court in Brey that Member States may not automatically assume that an EU national claiming social assistance can no longer invoke the Citizenship Directive by reason of being a burden on the public funds of the home state. Moreover, in Dano the CJEU does not refer to the ealier case of Trojani, in which it stated that EU citizens are entitled to social assistance in the host Member State as long as the he or she is still in the possession of a valid national residence status. The message of the CJEU in Dano is clear: the heart of the restrictions for economically inactive persons contained in the Citizenship Directive are not to be tempered with.
The CJEU wrongly denies the relevance and applicability of the EU Charter of Fundamental Rights
The last question raised by the German Court deals with the impact of some articles contained in the Charter of Fundamental Rights. By stating that Ms Dano’s situation is not governed by EU law is outside the realm of EU law, the CJEU simply denies the relevance and applicability of the Charter. This is very disappointing and in my view unnecessary. How can it be maintained that, notwithstanding the outcome of this particular case, the question of granting benefits to EU nationals is not a question of applying EU law? I can see that the Member States are free to determine the material conditions and levels of benefit of their social security systems. This is part of the non-harmonisation principle applying in EU social security law. But once you have a benefit scheme, the question of under what conditions rights arising from such schemes must be granted to EU nationals, cannot deemed to be fully a national issue. This is European law pur sang and it has been ever since 1958, the year that the first social security regulation came into being.
Only the European Social Charter provides for ‘shelter’
What will happen to EU nationals who become stranded in other Member States if they cannot claim any social assistance? Will they go home or will they stay in the host Member State, begging for money and sleeping in homeless shelters? It happens. Homelessness is on the increase, particularly amongst stranded EU citizens, as emphasized in the the 2014 Study on Mobility, Migration and Destitution in the European Union ordered by the European Commission. Will Member States help and support these people? In any case, EU law offers no remedy to these persons, so much is clear after Dano.
The Dano ruling was handed down in the same week that the complaint authority of the European Social Charter, the European Social Rights Committee (ESRC), took two decisions in collective complaints procedures against the Netherlands about its refusal to grant shelter and emergency assistance to foreign nationals without residence status (Council of European Churches v. the Netherlands; No. 90/2013) and about the practice of local councils applying a local connection test before giving shelter to the homeless (FEANTSA v. the Netherlands: No. 86/2013)). According to the ESRC, the Netherlands violates several articles of the European Social Charter. So this is ironically the current state of affairs under European law when it comes to the right to protection for non-nationals offered by social assistance schemes. EU citizens cannot invoke their EU Charter rights before the CJEU, but must rely on NGOs using the complaint procedure adopted by the Council of Europe under the European Social Charter.