—Goran Selanec, Constitutional Court of Croatia
[Editor’s Note: This is one of our ICONnect columns. For more information on our 2025 columnists, see here.]
At the end of April, the Court of Justice (CJEU) delivered a highly anticipated ruling in the case C-181/23 Commission v Malta.[1] The case concerned the possibility of issuing the so-called “golden passports” by EU Member States.[2] More precisely, in question was the naturalisation scheme that allowed the government to grant national citizenship (nationality) in exchange for predetermined payments or investments. The anticipation of the decision was in some way driven by unfavourable reactions to the dubious strategy that the European Commissions used in both initiating the infringement proceedings and arguing its case before the CJEU. What attracted particular attention was the fact that the Commission was well aware of related “golden” schemes run by other Member States[3] and its insistence on the “genuine link” requirement for granting national citizenship.[4]
Although it (seemingly) stayed away from the “genuine link” argument, the Court upheld many of the Commission’s claims. It held that the Maltese investor citizenship scheme amounts to the commercialisation of the grant of the nationality of a Member State and, by extension, of Union citizenship, which violates EU law, particularly the citizenship provisions in Art 20 TFEU. However, besides the fact that the Court found violations in relation with that concrete scheme, not much else is clear. Even those who agree with the result of the decision would have a challenging task of explaining how its conclusions follow from the provided reasoning. What is it about the “commercialisation” of naturalisation practices that makes it impossible “to establish the necessary bond of solidarity and good faith between a Member State and its citizens, or to ensure mutual trust between the Member States and thus constitutes a breach of the principle of sincere cooperation”? The reasoning is incomplete, as if the Court could not strike a clear path.
The CJEU’s reasoning
The Court built its reasoning around the notion of nationality. Similarly to the Commission’s claim that the Treaty contains a definition of some abstract core of the concept of nationality, the Court held that the concept entails some “bedrock” meaning at the Treaty level. For the Commission the key precondition for acquiring nationality of any Member state, and thus EU citizenship, was the existence of a “genuine link” between an individual and the State. The Court stayed away from the “genuine link” argument.[5] Nevertheless, it pointed out that in the previous case-law regarding the free movement of citizens it already held that nationality rests on a “special relation” between the State and its nationals. What makes the relationship special is the bond of “solidarity and good faith” and “the reciprocity of rights and duties”. This construction might have been coined in the previous case-law, but it is (and has always been)[6] as vague as the notion of genuine link employed by the Commission. The two may well be like the terms “morning star” and “evening star”. They may have somewhat different senses but, at the end (and the beginning) of the day, they still have the same celestial referent.
This “bedrock” of the notion of nationality has a decisive normative role in the formation and maintenance of EU citizenship. As the Court put it, “the special relationship of solidarity and good faith between each Member State and its nationals also forms the basis of the rights and obligations reserved to Union citizens by the Treaties”. Notice the structure of the assertion. It does not claim that the EU citizenship rests on the special relationship between the Union and its people(s). When the Court asserts that EU citizenship has fundamental importance in the EU constitutional framework because it is “one of the principal expressions of the solidarity”, it is piggybacking on the existence of a special bond between a nation (people) and their national state. The EU citizenship is ontologically tied to the notion of nationality.[7] However, from that moment on the logic is rather clear, as are its practical controversial implications. Having control over legal interpretation and enforcement of the EU citizenship guarantees necessitates the same control over the meaning of nationality. Consequently, the responsibility to explicate precise content and scope of that special relationship between States and their nationals seems to fall within the scope of the Court’s task.[8] This is not particularly intuitive for many. The ability to set conditions of nationality may be central to the ability of national states to (re)construct their national identity. The Treaty text is rather favourable to the understanding that issues of national identity, including the very privilege of defining nationality, remain within the regulatory competence of the Member States. The Court does not deny that. However, the fact remains that, on this approach, it is up to the EU Court to maintain “the bedrock” of nationality, if only at the level of inspecting the compliance of national legislation with EU law. No doubt, there will be more than few Constitutional Courts pondering (again) the implications of this approach for their task, as well as the distribution of competences between the EU level and their national constitutional orders.
Once it (re)established that the special relationship of solidarity and good faith constitute essential requirement of nationality, and thus indirectly the foundation of EU citizenship, the CJEU asserted that a “naturalisation scheme based on a transactional procedure” in which nationality is “essentially granted in exchange for predetermined payments or investments” manifestly disregards the requirement for such a special relationship and thus breaks the mutual trust on which the EU citizenship (and the whole European integration) is based. The Court does not elaborate why a national scheme granting nationality in transactional fashion breaks the mutual trust of other Member States, especially if they are already running their own transactional naturalisation schemes. Similarly, no clear reasons are provided for the assertion that “commercialisation of the granting of the status of national of a Member State” is incompatible with the fundamental (constitutional) status of EU citizenship.
Some pointers can possibly be inferred from the CJEU’s concrete analysis of the scheme before it. Unsurprisingly the Court first stressed that the scheme has no conventional actual residency condition. However, yet again, the Court did elaborate what (kind and length of physical presence) would amount to “actual residence”. Next, and more interesting, the CJEU pointed out that the scheme lacked a guarantee of assessment intended to establish whether the applicant’s situation justified the grant. It considered that nothing suggested that the scheme provided for “a specific and concrete examination of the relevance of certain investments in order to establish the existence and extent of an applicant’s ties with the Republic of Malta, or to enable the development of such links.” This finding indicates a focus shift. A transactional character of the investment is not per se problematic. What matters is whether it holds possibility for some minimal degree of social integration of the applicant. Yet again, it could be argued that national authorities are better placed for such assessment having a better insight of their local social, cultural, economic and political circumstances. Of course, “assuming that they are trustworthy”, one could quickly quip.
A better framework: commodification
The Court’s reasoning relies heavily on several venerated principles. That is not problematic per se. It is problematic when they remain vacant, which is the case here. The reasoning offers few answers to important questions existing outside the particular instance of this case. The Court should have been reminded that some other EU states run related immigration investors schemes raising similar concerns.[9] Although, that could actually also be a barrier to greater precision.
In any case, it remains unclear why the Court felt it necessary to ontologically merge notion of EU citizenship to the notion of nationality. As argued, such approach is problematic from the perspective of competence distribution and vertical separation of power in the EU. It is also avoidable. Both the Court and the Commission pointed to a more pragmatic analytical framework.
The reasoning suggests that the Court is distinguishing the scheme based on transactions (but capable of developing ties) form the one amounting to commercialisation. The Commission similarly points out that the scheme constitutes commodification of citizenship.
The argument of commodification offers a powerful framework for clarifying legitimate concerns about practices that treat public goods like fungible products that can be marketed, price-tagged, and traded.[10] The argument is well-known and well-developed.[11] It rests on the compelling premise that there exist public goods that we value in a manner that is fundamentally different from the transactional rationality we use in market-based environment. Moreover, allowing the invasion of rational favoring market-metrics into these areas of our social interactions, which are based on distinct and profoundly different modes of perceiving what is valuable in life, undermines our ability to engage in these forms of valuing. At the same time they are necessary for the maintenance and promotion of our joint civic life in society organised around our commitment to human dignity, freedom, democracy, equality, the rule of law and human rights – all of these being “common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail”.
In the current environment, the commodification argument seems particularly potent when placed in the context of EU democracy. The argument that the EU constitutional framework holds some “essentialist” definition of nationality common to all Member States, which the Court must uphold to protect the survival of the concept of EU citizenship, may not be convincing to many. However, the claim that the Treaty provides for an independent conception of democratic process specific to the Union’s supranational political environment is difficult to refute. Accordingly, if turning national citizenship into commodity destabilises democratic processes at the EU level this is more than sufficient reason to find a violation of EU law.
At the same time, conception of democracy promoted through the Treaty provisions has a feature (of constitutive relevance) that corelates to the commodification argument.
The EU democracy is constituted through the notion of proportional representation. It serves to achieve the Treaty proclamation that the EU is a political venture of “creating an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the citizen”. The application of the principle on the EU’s outstanding social, cultural and political diversity produced highly pluralist version of democratic process. One can only look at the organisation, structure and functioning of the EU Parliament. For example, it is remarkable that although organized along national lines, through allocation of seats in proportion to size of Member State population, the EU parliament operates through large pan-EU political coalitions (families) of politically related national parties. This is a direct consequence of the capacity of the proportionality principle to foster representational pluralism. Yet, it is certainly challenging to maintain such complex political process in a functional way. A high degree of cooperation, reciprocated acknowledgment of concerns, and mutual trust between the participants is required.
Proportional representation aims to ensure that wide variety of distinctive views, formed primarily within national political communities, can be expressed in the EU political decision-making and impact its outcomes. This obviously presupposes that those representing their communities can articulate their views and interests. That is hardly possible without their active participation in those communities. Equally obvious is another presumption. To have a view that could be represented at all at the level of EU decision-making necessitates a (national) community in which people engage in various modes of joint participation in its public life. The experience of joint participation in public life is vital for development of civic capacity. In addition, the principle serves yet another distinct feature of EU democracy. The principle facilitates deliberative capacity of democratic decision-making at EU level. The example of the EU Parliament shows that in a democratic context of complex pluralism of political views, political effectiveness necessitates partnership formation. This requires capacity to acknowledge others with their different views, interests, and concerns, and to engage with them.
Put differently, the EU conception of democracy requires citizens that are considerate of and conversant about the interrelation of all political levels shaping their daily life, from the potent supranational EU level right through democratically prevailing national level to the level of local self-governance. This requires experience of active participation in public life. To have a vote in the electoral process is to contribute to the shaping of experiences of others. For those affected, it is sensible to expect from other participants (voters) to have some basic understanding of what constitutes and concerns polity which they all jointly share and govern. This is particularly the case with multinational integrationist ventures such as the EU. To transcend divisions among them, citizens certainly need to grasp interests of their community, but also its capacity for adjustment so interests of others, who are joined in this venture, could be accommodated too. This is relevant to the use of the free movement rights as well.
Turning parts of our civic social status into commodities promotes a particular normative view that is focused primarily on maximisation of personal gains. Accordingly, it perceives benefits that we derive from civic interactions on public matters as translatable into market-like metrics and exchangeable. It thus risks undermining the importance of public engagement, mutual understanding, civic responsiveness, and commitment to common public good, and consequently may erode the very things that constitute a deliberative account of democratic life.
The Court did not take this route in its reasoning. No elaborated account of how commercialisation of national citizenship erodes the EU’s political mechanisms of democratic decision-making has been offered. At the same time, the decision contains notable references to all the Treaty provisions directly framing the conception of supranational democracy at the EU level. The connection between EU citizenship and political rights, including the right to vote, is stressed in the reasoning as one of the constitutive elements of the fundamental status the EU citizenship enjoys in the EU constitutional framework. Unfortunately, these points are not further developed.
This is particularly regrettable since one of the most significant threats to democracy in the EU has emerged from a particular form of commodification. Conventional venues of public discourse serving our ability to meaningfully engage in political lives of our polities have been eroded by technological developments in the IT sector. Recent experience even suggests that tremendous wealth and power accumulated through this process encourages its beneficiaries to directly interfere in the mechanisms of democratic decision-making in Europe, notwithstanding the simple fact that they have no actual civic connections whatsoever with these polities. In that sense, it is worth noticing that the Court is yet to develop its case-law on the scope and implications of the EU democratic guarantees on the behaviour of both EU institutions and individual Member States. In the current context of the rise of authoritarian erosion of democracy, the Court is undoubtedly lagging behind in carrying out this responsibility.
Suggested citation: Goran Selanec, Commodifying Nationality, Undermining Democracy, Int’l J. Const. L. Blog, May 16, 2025, at: http://www.iconnectblog.com/commodifying-nationality-undermining-democracy/
[1] https://curia.europa.eu/juris/documents.jsf?num=C-181/23
[2] See e.g. https://www.globalcitizensolutions.com/citizenship-by-investment/
[3] https://commission.europa.eu/strategy-and-policy/policies/justice-and-fundamental-rights/democracy-eu-citizenship-anti-corruption/eu-citizenship/investor-citizenship-schemes_en
[4] See https://verfassungsblog.de/citizenship-for-sale/
[5] See https://verfassungsblog.de/why-bother-with-legal-reasoning/
[6] See https://eulawanalysis.blogspot.com/2025/04/pirates-of-mediterranean-meet-judges-of.html?m=1
[7] See https://verfassungsblog.de/the-silent-engine-of-european-citizenship/
[8] See https://eulawlive.com/op-ed-the-end-of-the-reserved-domain-on-citizenship-attribution/
[9] See e.g. https://www.reuters.com/markets/europe/portugals-revamped-golden-visa-scheme-boost-investment-funds-2024-01-09/
[10] See Bertrand, Elodie, and Vida Panitch, eds. 2024. The Routledge Handbook of Commodification. First edition. Abingdon, Oxon: Routledge.
[11] See Anderson, Elizabeth. Value in Ethics and Economics. United Kingdom: Harvard University Press, 1995.; Radin, Margaret Jane. Contested commodities. Cambridge: Harvard University Press, 1996.
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