The Impact of Free Movement of People on the European Union's Internal Market

Critically discuss the effect of free movement of persons in the internal market, refer to case law

Free movement of people within the European Union is a fundamental aspect of the Union Citizenship as established by the 1992 Treaty of Maastricht. Free movement of people means that EU citizens have the right to move freely and reside within any EU member state. Through this principle, the EU citizens are enabled to look for a job in any EU country, work there without requiring to obtain a permit, live there for the duration of their work or even after the employment ends and enjoy equal treatment with regard to accessing opportunities, employment conditions and any other social or tax benefits. For students who are focusing on law dissertation help, understanding the intricacies of free movement within the EU is vital for comprehending the legal framework underpinning Union Citizenship. The freedom of movement, besides benefiting job seekers, is also applicable to their family members, students, non-economically active persons and even EU citizens returning to their country of origin from abroad. Within the European Union a few laws are governing various operations and aspects initially with the treaty establishing the European Community. Specifically, focusing on the internal market of free movement of persons the European Union citizenship directive is the main regulation like the European Union charter on human rights. This highlights the subsistence of two categories of the EU states. There are the old states otherwise referred to as the EU 15 and the new states that joined the community referred to as the EU 13, and the free movement of people is applicable to and occurs in both. The purpose of this essay, therefore, is to establish: the various effects that the free movement of people and the various laws governing it have impacted on the single internal market; and whether or not free movement has helped the internal market to succeed.

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1. Directive 2004/38(EU Citizenship Directive)

Effects of free Movement of persons within the European Union on the internal market

This section will highlight some of the reasons or motivations that people have to move between the various EU member states and how this free movement is seen to impact on the single internal market, by looking at a number of law cases concerning the free movement of people in the EU.

One significant effect of the free movement of people is that people who move to any country that is an EU member state is bound to benefit from equal treatment and rights as the county’s citizens. A citizen of a member state is, by virtue of Art 20(1) TFEU, a citizen of the EU which entitles them to the benefits under EU law. However, this notion and the implementation of the EU citizenship directive has been contentious on many fronts, given that there are instances (some rightly so) when non-citizens don’t get to enjoy similar rights and/ or benefits that the country’s citizens enjoy.

Free movement has brought in immigration impacts particularly from the old European Union states otherwise the EU 15. A lot of movement has been seen from the new states (known as the EU 13) to EU 15, and vice versa. The original and old members seem to have influx of individuals from other member states in an increasing mode over the last two decades. However, such movements have brought with it a number of implementation difference problems when it comes to social protection or benefits in. This has often resulted into (perceived) discrimination of foreigners in some other countries.

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2. Directive 2004/38(EU Citizenship Directive)
3. 'Job-Seekers Have A Right Of Residence But No Access To Social Assistance Benefits Under Directive 2004/38: Case C-67/14 Alimanvoic, EU:C:2015:597' (2016) 23 Maastricht Journal of European and Comparative Law.
4. Dion KRAMER, 'Earning Social Citizenship In The European Union: Free Movement And Access To Social Assistance Benefits Reconstructed' (2016) 18 Cambridge Yearbook of European Legal Studies.

Free movement has seen to some people moving away from their countries of origin and into other countries with the sole objective of benefiting from those countries’ social welfare systems. However, some countries within the Union do not support and recognize social protection of non-members otherwise foreigners. This aspect of non-recognition of the social welfare of foreigners was given approval by the Court of Justice of the European Union in a number of instances. The Dano v Jobcenter Leipzig (2014) is an example of a law case that demonstrates this effect of the free movement. Ms. Dano and her son moved to Germany from Romania and have been living with their sister. Ms. Dano applied for social assistance, which the country’s citizens are entitled to, and the Jobcenter Leipzig refused her request. She filed a case in court, but lost. This is an instance of an economically inactive citizen. Whereas the EU Citizenship Directive does not require that member states provide social assistance to non-citizens , it is thought that the Charter of Fundamental Rights may ultimately do just that. The German law on Grundsicherun (social assistance for jobseekers) excludes foreigners whose right of residence is only based on their search for a job or who come into Germany primarily to benefit from social assistance from such assistance. It is for this reason that Germany refused MS. Dano’s claim and request for social assistance, and this was affirmed by the European Court of Justice when the case was referred to it for preliminary ruling. It can therefore be concluded that this ruling was rightly made since Germany’s refusal was in line with the EU law: the EU citizenship directive has not made it a requirement for countries to grant social assistance to economically inactive citizens in the first three months and has outlined that, if the duration of residence exceeds three months but is less than 5 years as in the case of Ms.Dano, these citizens

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5. Blauberger, M. and Schmidt, S.K., 2014. Welfare migration? Free movement of EU citizens and access to social benefits. Research & Politics, 1(3), p.205
6. Ibid
7. Ibid

should have adequate resources of their own so as to avoid needing to depend on the host country’s social welfare for their subsistence.

Another effect of the free movement of people is that it enables people and workers seeking employment to move from countries thought of to have limited employment opportunities to countries with many jobs, and with a short supply of human labor. This move has led to people gaining employment in various sectors in countries away from their own, and they get to enjoy the various benefits that citizens of their host countries enjoy, in terms of pay, residence, equal rights and other social benefits. The free movement of people has been estimated to bring about a 6% decrease in the average unemployment rate across the continent in the last year. This has, however, also been predicted to result in a 12% shrink in the working-age population as most young and skilled people leave EU for better opportunities in foreign countries, that could cause a shortage of labor and skills which will in turn strain the economic development of the EU.

Free movement has also been seen to promote unfair competition and unequal development among countries. This is because it has led a lot of people moving away from their countries to counties where they believe there are better prospects. This has brought about some countries having extremely higher immigrant numbers and people in search of work or employment, potentially leading to an influx of cheap immigrant labor in some countries which companies

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8. Ibid
9. Carrera, S., 2005. What does free movement mean in theory and practice in an enlarged EU?. European law journal, 11(6), pp.699-721.
10. Heindlmaier, A. and Blauberger, M., 2017. Enter at your own risk: free movement of EU citizens in practice. West European Politics, 40(6), pp.1198-1217.
11. Van der Mei, A.P., 2003. Free movement of persons within the European Community: cross-border access to public benefits (Vol. 30). Hart Publishing.
12. Heindlmaier, A. and Blauberger, M., 2017. Enter at your own risk: free movement of EU citizens in practice. West European Politics, 40(6), pp.1198-1217.
13. Krings, T., 2009. A race to the bottom? Trade unions, EU enlargement and the free movement of labour. European Journal of Industrial Relations, 15(1), pp.49-69.

and countries have taken advantage of to gain competitive advantage and to undertake social dumping. Multinational corporations in higher-wage member countries have cut corners to avoid legal requirements by hiring cheaper temporary immigrant labor and subcontractors from low wage countries and moving their production and other processes to low wage countries that are not as regulated. Some countries have also taken advantage of the free movement to temporarily send their citizens en mass to foreign counties for purposes of work in the context of posted workers- and paying them lower salaries compared to the prevalent requirements of equal pay for same work in those countries-, and to carry out undeclared work, giving them an unfair competitive advantage (as a result of the differences in social protection, regulations and conditions between industries and countries). This is referred to as social dumping. Whereas posted workers are entitled to receive similar working rights and benefits of the host country, they usually tend to remain under and subject to the regulations of their countries of origin. Companies and countries with more advantageous regulations are therefore taking advantage of regulatory arbitrage and manipulating regulatory conformance to ‘post’ workers in countries whose regulations are less advantageous to deliver various services for them at a cost that would be lower compared to the prevailing conditions in the host countries. These two phenomena (social dumping and higher immigrant workers) have resulted in negative consequences when it comes to social security of the workers (in terms of working periods, work benefits, health and safety environments and non-discriminatory and equal right regulations) and on economic processes, as well as significant differences between local and posted workers. It has led to the pay that workers receive, their working and living conditions are lower and sub-standard in

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14. Ibid
15. 'Job-Seekers Have A Right Of Residence But No Access To Social Assistance Benefits Under Directive 2004/38: Case C-67/14 Alimanvoic, EU:C:2015:597' (2016) 23 Maastricht Journal of European and Comparative Law.

relation to the requirements specified by law or labor market agreements or conditions prevalent at the time. These actions by larger multinational companies have effectively out-competed smaller firms, leading to job losses among those that are forced to close shop, while some countries have accused others of unfairly developing at their expense, leading to a general lack of shared prosperity. This unequal development has also been attributed to the departure of various investors for other European countries, which has led to economic growth and living standards in their countries of origin declining. However, there have been arguments against posted workers and high immigrant workforce being sources of unfair competitive advantage, with some claiming that they are a force that helps to further promote the integration of the EU single market and arguing that differences in wages, social security and tax advantages are a normal thing. It is also seen as detrimental to competition and a threat to the poorer countries or those with limited resources, as a result of the ‘same work, same place, same pay’ notion, to hire more productive and higher-skilled workers in order to compete effectively.

As a result of free movement, foreigners who move to other countries for work can effectively maintain their right to residence and continue enjoying the benefits enjoyed by the host country’s citizens. This is as provided for by the EU citizenship directive through art. 7(3)(b) which states that an EU citizen can maintain their “worker” status and earn the right to continue residing and enjoying benefits if they work for over a year in the host country. This was also affirmed for those who have been self-employed by the CJUE ruling against the Irish Department of Social

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16. Van der Mei, A.P., 2003. Free movement of persons within the European Community: cross-border access to public benefits (Vol. 30). Hart Publishing.
17. Damay, L. and Mercenier, H., 2016. Free movement and EU citizenship: a virtuous circle?. Journal of European Public Policy, 23(8), pp.1139-1157.
18. Verschueren, H., 2015. Free movement of EU citizens: including for the poor?. Maastricht journal of European and comparative law, 22(1), pp.10-34.
19. Ibid

Welfare in the case of Gusa v Minister for Social Protection, Ireland and Attorney General. The EU law also provides for the protection and rights of self-employed individuals who cease to work as a result of conditions beyond their control. The court further explained that interpreting the provision did not require a restrictive approach as to only cover those employed since this would lead to unjustified outcome. It was their decision that those who had worked as self-employed individuals for a period of one year and were forced into involuntary employment were entitled to retain their status as self-employed and thus the right of residence, and that any other ruling would be against the directive’s very objective of remedying unsystematic and partial characteristic of the earlier ruling, and would about a difference between the union citizen employees and those who were employed. Although the ruling strengthens the rights of several self-employed people in their host countries, it is seen to lack a spectacular legal logic among most people. This cemented the fact that the retention of worker status applied to not only union workers who were employed under a contract, but also the self-employed citizens, who had worked for over a year.

Conclusion

Although the concept of the free movement enables of all EU citizens to move to, look for employment and work in other countries without any restriction and proposes that they should enjoy the same benefits and equal rights as the citizens of the host countries, there are various conditions and requirements that should be fulfilled before they get to enjoy these rights. These conditions differ for the different groups; jobseekers, students, self-employed and employed people, retired or economically inactive people. The freedom of movement has also been found

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20. Ibid
21. Seikel, D., 2015. Class struggle in the shadow of Luxembourg. The domestic impact of the European Court of Justice's case law on the regulation of working conditions. Journal of European Public Policy, 22(8), pp.1166-1185.

to have a number of effects or impacts on the single market, with some impacts being positive and others negative. These impacts range from unrestricted ease of movement to other countries, gaining of employment by foreigners and their enjoyment of equal treatment in host countries, availability of cheap labor, misuse of certain rights and privileges by companies and countries. There have, however been numerous problems in the implementation of free movement provisions and requirements, which have seen to the filing of court cases, as have been highlighted above. It can thus be concluded that there is glaring gap and need to harmonize a number of directives governing European Union to prevent a number of concerns that are apparent in the internal market creation, the borderless limits and freedom of movement.

BIBLIOGRAPHY

Books & Journals

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Blauberger M and Schmidt S K, 2014. Welfare migration? Free movement of EU citizens and access to social benefits. Research & Politics, 1(3), p.2053168014563879.

Carrera S, 2005. What does free movement mean in theory and practice in an enlarged EU?. European law journal, 11(6), pp.699-721.

Damay L and Mercenier H, 2016. Free movement and EU citizenship: a virtuous circle?. Journal of European Public Policy, 23(8), pp.1139-1157.

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van der Mei, A.P., 2018. Overview of recent cases before the Court of Justice of the European Union (October− December 2017). European Journal of Social Security, 20(1), pp.49-55.

Verschueren H, 2015. Free movement of EU citizens: including for the poor? Maastricht journal of European and comparative law, 22(1), pp.10-34.

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Werner B, 2016. Why is the Court of Justice of the European Union not more contested? Three mechanisms of opposition abatement. JCMS: Journal of Common Market Studies, 54(6), pp.1449-1464.

Case Laws

C-333/13; Elisabeta Dano v Jobcenter Leipzig

Gusa 2017 Case C-442/16; Florea Gusa v Minister for Social Protection, Ireland and Attorney

General

Statutes/Directives

Directive 2004/38(EU Citizenship Directive)

EU Charter of Fundamental Rights

Regulation No 883/2004

Schengen Agreement of 1985

Single European Act (SEA) 1986

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