A Rejoinder to Citizenship for Sale (Commission v Malta)

In his piece on Citizenship for Sale of 14 April 2024, Joseph Weiler criticizes the European Commission’s infringement procedure against Malta’s golden passport scheme. The reason why the Commission should (or could) not have brought the case and the Court should not uphold it, essentially seems to come down to the triple argument that:

• The EU does not have competence to regulate national citizenship, as a result of which the Commission should not be allowed to circumvent this lack of competence by going to the Court pursuant to Article 258 TFEU;
• The fundamental status of EU citizenship (which would provide the basis to argue that Malta can be restricted under EU law as to whom it grants national citizenship) was created ex nihilo;
• The Commission focuses on golden passport schemes although it recognizes that golden residence schemes (of other Member States) are qualitative as problematic but quantitatively more significant.

While the present reply does not argue that the Court will necessarily find in the Commission’s favour, the Commission’s legal claim and strategy do not seem to be as (constitutionally) problematic as Weiler make them out to be. Three counter arguments substantiate this:

First, and as a matter of law, the first argument noted above has been tried, tested and rejected by the Court of Justice. Since the scope of EU law is broader than the scope of the EU’s competences, the Court of Justice typically responds to a Member State invoking its retained competence in a matter by stating that the EU indeed does not have competence but, “the fact remains that, when exercising [their] competence, the Member States are required to comply with their obligations deriving from EU law.” (para. 56) This reasoning by the Court was coined the “no, but” reasoning by De Witte, and can be found in numerous policy areas falling within national competence, the rule of law being the most recent illustration. Specifically regarding national citizenship Callies (already in 2007) surmised that Member States, when exercising their own competence “must not harm the interests of the Union and the other Member States through either a too generous or too restrictive naturalization policy.”¹⁾ Of course, it could be that legally the competence to grant national citizenship is qualitatively different from the competence to organize the national justice system or to raise taxes, but to argue that point, one would first have to engage with the “no, but” jurisprudence of the Court.

In cases on the withdrawal of national citizenship, such as Rottmann, Tjebbes, and JY, the “no, but” jurisprudence means that the Court accepts that it remains a competence of the Member States, but that Member States must ensure there is proportionality between the reason for withdrawal and the effects of the resulting loss of EU citizenship. If this is considered “good law”, and we can assume that the Court considers it to be so, a similar logic is at play to argue, in relation to the grant of national citizenship. Although this is also a Member State competence, the ground for granting citizenship could not be manifestly inappropriate²⁾ (as part of proportionality) to reflect the “social fact of attachment, [the] genuine connection of existence, interests and sentiments” to which nationality legally gives expression (Nottebohm, p. 23), given that the fundamental status of EU citizenship (and the concomitant rights for the individual and the obligations owed to it by other Member States) flows from that national citizenship. While van den Brink notes that even taking into account the “no, but” jurisprudence, “there is no precedent for the argument that national rules on the acquisition and loss of nationality must be compatible with a genuine link requirement,” Commission v. Malta precisely presents the opportunity to set a precedent, and identifying such a requirement would follow the logic of the “no, but” jurisprudence. It even seems necessary to take this further step because Member States are required under EU law, following Micheletti, to accept that there is a genuine link between other Member States and their citizens. Since Member States cannot put such a genuine link in doubt anymore between themselves, it appears plausible to suggest that such genuine links may be presumed precisely because there is also a requirement flowing from EU law to that effect.

As to the second argument to the effect that the Commission’s case rests on the premise that EU citizenship is destined to be the fundamental status of the nationals of the EU Member States, Weiler is evidently right, as he argued earlier, that there is no clue for this “fundamental status” in the Treaties and that it was more or less conjured up out of thin air by the Court in Grzelczyk. At the same time, the ship of the fundamental status of EU citizenship has already sailed: the EU secondary legislator codified it in Directive 2004/38 and the Court has reaffirmed it in over 50 cases. While it can still be debated academically, the Court will not backtrack on it in Commission v. Malta. The more pertinent question would then seem to be what the most persuasive legal argument is that Malta can make that limits the reach of EU law as much as possible, without challenging directly the idea of the “fundamental status of EU citizenship”.

Finally, the third argument ignores a number of legal and (potentially) strategic considerations. Legally, it is well-established that the Commission has full discretion in its choice of bringing (or not bringing) infringement cases, no matter how trivial, manifest or serious the alleged infringement (see eg para. 22). Even if “golden residence” schemes are objectively more problematic than “golden passport” schemes, this is legally irrelevant for the question whether the Commission could bring an infringement case and it does not affect the objective assessment which the Court will have to make (based on the evidence adduced by the Commission, see para. 60). It is also the objective nature of the infringement procedure that has meant that the Court is unreceptive to Member States’ arguments pointing to the lack of compliance by other Member States (eg para. 11). Only recently did the Court deviate from this approach in the infringement cases on the temporary relocation mechanism, noting that the Commission had still distinguished several Member States pursuant to a “neutral and objective criterion”. (para. 81) Assuming that this amounts to a requirement limiting the Commission’s discretion in bringing cases, it would in any event still be met in Commission v. Malta since that Member State would be the only Member State that has maintained its golden passport scheme. Such a scheme is objectively different from a golden residence scheme, despite their similar effects. Legally, Weiler questions the Commission’s approach of bringing proceedings rather than to propose EU legislation that harmonizes the national procedures to acquire residence permits or citizenship. However, both legally and strategically these are not either-or options. Without being privy to the strategic considerations entertained by the Commission, it is perfectly possible for the Commission to first initiate (a) test case(s) before the Court and later use the momentum created by the judgment(s) of the Court to propose a common EU action.³⁾ From that perspective it may also make strategic sense for the Commission to focus on golden passport schemes rather than golden residence schemes, because if the Court finds the former to come within the scope of EU law, that would a fortiori also be the case for the latter. A judicial finding to this end, would then (legally) reinforce a possible proposal of the Commission pursuant to Article 352 TFEU to introduce EU harmonization in this area, as advocated by Weiler.

One can of course debate whether the Commission’s approach is strategically wise given the current socio-political context, even if one should probably not suspect that European citizens look benevolently at “pay for citizenship” schemes. However, from the perspective of “the profound values inherent in jurisdictional limits and constitutional procedures”, the principle that a Member State does not enjoy unfettered discretion, under EU law, in granting its national citizenship appears perfectly tenable.