Why bother with legal reasoning?

This post first appeared on Globalcit.

Hindsight can make one look naive. Following the Opinion of Advocate General Collins in Commission v Malta, I argued that ‘the rhetorical battle over citizenship by investment has been won by the EU institutions’ but that ‘emotions and rhetoric alone should not decide legal battles’. Of course, I should have known better: the central dogma on which a large lineage of EU citizenship cases rests – that EU citizenship is destined to be the fundamental status of nationals – is a rhetorical device without basis in EU law. And once again, in the Commission v Malta ruling of 29 April 2025, on whether Malta was in breach of its obligations under EU law by maintaining and promoting a citizenship by investment (CBI) scheme, the Court prioritised rhetoric and political expediency over solid legal argumentation.

The outcome of the judgment will not have escaped the notice of many EU lawyers. The Court sided with the Commission in finding that, by introducing a CBI scheme, Malta had violated the principle of sincere cooperation in Article 4(3) TEU and the concept of EU citizenship in Article 20 TFEU. The Court’s legal reasoning, on the other hand, might have been harder to find for those who have read the judgment. The decision is reminiscent of Ruiz Zambrano, where the Court also opted for an expansionary reading of EU citizenship without offering a substantive legal justification. In this post, I argue that the judgment is thinly argued and will only contribute to the perception that the Court happily discards constitutional guardrails when political expediency so demands (see also here).

The disappearance of the genuine link

While the Court agreed with the Commission that Malta’s CBI scheme violated Articles 4(3) TEU and Article 20 TFEU, it followed a different line of argumentation. According to the Commission, the CBI scheme violated these provisions because it offered citizenship to persons ‘in exchange for pre-determined investments without requiring the existence of a genuine link between that Member State and those individuals’. The term genuine link is nowhere to be found in the main part of the judgment, understandably so, as it had been made clear by numerous academics as well as the Advocate General in his Opinion that this argument was a non-starter. The Commission borrowed the principle of genuine link from the 1954 Nottebohm decision of the International Court of Justice (ICJ), but this ruling merely concerned the recognition of nationality, not its acquisition, making it irrelevant to the present case (for more detail, see here and here).

Instead, the Court found a violation of Articles 4(3) TEU and 20 TFEU, mainly because the commercialisation of nationality violates the relationship of solidarity between Member States and their nationals and the principle of mutual trust. The Commission raised these points too but in part to support the plea that nationality could not be awarded absent a genuine link. By foregrounding solidarity and mutual trust and thereby substituting the principle of genuine link, the Court will at least escape the criticism that it does not understand ICJ case law.

Eleven mind-bending paragraphs

But if the judgment was not anchored in the principle of genuine link, then how did the Court justify its conclusion? According to Article 20 TFEU, EU citizenship is additional to national citizenship and Declaration No 2 states that ‘whether an individual possesses the nationality of a Member State shall be settled solely by reference to the national law of the Member State concerned’. Of course, this proves nothing yet: Member States must exercise their competences – including the power to lay down rules on the loss and acquisition of nationality – in accordance with EU law (e.g., Micheletti, para 10). However, a solid justification of which rule of EU law was breached is still needed.

It is here that the judgment becomes profoundly maddening and mind-bending, offering us legal reasoning of a kind and quality that is unacceptable of the EU’s highest court.

The Court’s findings are short for a ruling with such seismic constitutional implications: 42 paragraphs in all. Of these 42 paragraphs, the first five restate the settled principle that Member States must exercise their power to determine who is a national citizen in accordance with EU law (paras 79-83); the next seven paragraphs list the rights enjoyed by EU citizens and explains their value (paras 84-90), and the final 20 paragraphs discuss, after the Court has found that the commercialisation of national citizenship breaches EU law, whether there are any reasons to question the conclusion that Malta’s CBI scheme commercialises national and EU citizenship (paras 102-121).

That leaves 11 highly consequential paragraphs that fundamentally alter the relationship between EU and national citizenship. Allow me to take you through them one by one in an attempt to make sense of them. My thoughts are italicised.

• Paragraph 91: ‘the provisions relating to citizenship of the Union are among the fundamental provisions of the Treaties’. Nothing controversial yet.
• Paragraph 92: because of ‘the scope of the rights attaching to Union citizenship’ and ‘the fact that that status derives automatically from the fact of being a national of a Member State, … Union citizenship constitutes the fundamental status of nationals of the Member States’. A predictable sentence, but note the magic being performed here: EU citizenship is derived from national citizenship and therefore the fundamental status. Surely, the logical conclusion is that national citizenship is the fundamental status under EU law and EU citizenship merely derivative.
• Paragraph 93: ‘Union citizenship is thus one of the principal concrete expressions of the solidarity which forms the very basis of the process of integration’. Note the ‘thus’. EU citizenship is the fundamental status, ‘thus’ it is a concrete expression of solidarity. The logic is impossible to follow.
• Paragraph 94: the principle of sincere cooperation requires that states do not ‘jeopardise the attainment of the European Union’s objectives’. Uncontroversial, but search for the word objective in the judgment—you will find that the Court finds a violation of sincere cooperation without ever clarifying which objective has been jeopardised. Indeed, the Court ultimately reaches a conclusion on the basis of a rule it never properly applies to the issue before it.
• Paragraph 95: ‘Union citizenship is based on the common values contained in Article 2 TEU and on the mutual trust between the Member States’, so the power to lay down rules on the acquisition of nationality may not be exercised ‘in a way that is manifestly incompatible with the very nature of Union citizenship’. What does this even mean? Member States may not act in a way that is incompatible with the very nature of Union citizenship, period. What do Article 2 TEU and mutual trust add? Is Article 2 TEU suddenly the very nature of EU citizenship, so that a violation of the values contained therein amount to a violation of EU citizenship? It’s all rather cryptic.
• Paragraph 96: ‘it is clear from the Court’s settled case-law that the bedrock of the bond of nationality of a Member State is formed by the special relationship of solidarity and good faith between that State and its nationals and the reciprocity of rights and duties’. Citing settled case law selectively—always a good strategy! According to settled case law, ‘it is legitimate for a Member State to wish to protect the special relationship of solidarity and good faith between it and its nationals and also the reciprocity of rights and duties, which form the bedrock of nationality’ (e.g., here and here). Indeed, the reasoning in these cases offered a justification for Member States to restrict rights and even deprive individuals of their EU citizenship. Suddenly, and without argumentation, the Court tries turning this justification for a rights restriction into a positive legal obligation: Member States may not award national and EU citizenship if there is no a special relationship of solidarity and good faith between the state and the individual (see para 99). The reasoning just doesn’t add up.
• Paragraph 97: ‘in accordance with Article 20(1) TFEU, 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’. Here the Court is turning the conceptual statement that the special relationship of solidarity and good faith between that State and its nationals is at the bedrock of nationality into a legal one—argumentatively unsound, but something must be found to translate the conception of nationality in para 96 to the European level.
• Paragraph 98: The Court again repeats that national conditions for the award of citizenship must be in compliance with EU law.

Let’s pause for a moment. Eight of the eleven paragraphs have passed and the Court has yet to say anything about whether citizenship by investment schemes breaches EU law. But then it comes:

• Paragraph 99: ‘a Member State manifestly disregards the requirement for such a special relationship of solidarity and good faith, characterised by the reciprocity of rights and duties between the Member State and its nationals, and thus breaks the mutual trust on which Union citizenship is based, in breach of Article 20 TFEU and the principle of sincere cooperation enshrined in Article 4(3) TEU, when it establishes and implements a naturalisation scheme based on a transactional procedure between that Member State and persons submitting an application under that programme, at the end of which the nationality of that Member State and, therefore, the status of Union citizen, is essentially granted in exchange for predetermined payments or investments’.

Having selectively interpreted settled case law and decided that conceptually – and thus somehow also legally – the special relationship of solidarity and good faith between that State and its nationals and the reciprocity of rights and duties is at the basis of EU citizenship, the Court establishes the rule that member States must protect the special relationship of solidarity and the reciprocity of rights and duties in their nationality laws. And because Malta’s CBI scheme did not protect these values, a violation of Articles 20 TFEU and 4(3) TEU is found. A politically convenient conclusion, yet one lacking sound legal argumentation.

But there are two paragraphs left. Perhaps a justification can be found there.

• Paragraph 100: ‘A programme of that sort amounts to the commercialisation of the granting of the status of national of a Member State and, by extension, Union citizenship, which is incompatible with the conception of that fundamental status that stems from the Treaties’.

Why is the fundamental status of EU citizenship violated? For the Court, EU citizenship is the fundamental status because of ‘the scope of the rights attaching to Union citizenship’ and because ‘that status derives automatically from’ nationality (para 92). The Maltese CBI scheme doesn’t violate these rights nor alter EU citizenship’s derivative nature, so the Court’s conclusion simply doesn’t follow from its argument.

• Paragraph 101: Because Member States must recognise the effects of each other’s nationality decisions, ‘transactional naturalisation … is also liable, by its nature, to call into question the mutual trust which underlies that requirement of recognition, since that trust relates to the premiss that the grant of the nationality of a Member State must be based on a special relationship of solidarity and good faith’.

At first glance, this seems like the Court’s strongest argument: free movement is an EU objective; this objective requires mutual recognition of nationalities; mutual recognition only works when there is mutual trust; so CBI, by undermining mutual trust, imperils the EU’s objectives, thus being contrary to EU law (the Court doesn’t spell out the argument; fortunately, Stephen Coutts has done so for us with great care).

However, if we reflect on it for a moment, also this argument quickly unravels. The Court makes a theoretical claim that is questionable and an empirical claim unsupported by facts. The theoretical claim is that mutual trust can exist only when citizenship is based on a relationship of solidarity. The empirical claim is that CBI erodes mutual trust. Starting with the latter, have Member States ever complained about Malta’s scheme or threatened not to recognise Maltese passports anymore? That is, is there any evidence that mutual trust has been eroded? Not that I know, and the Court doesn’t offer any—and surely breach of law is a factual question, not a matter of mere hypothetical speculation. Moreover, what if, to take a different example, Member States would object to a third of Moldovan citizens having a Romanian passport? Many of these Moldovan citizens might have a stronger bond of solidarity with Romanian than the average investor with Malta, and yet many Member States will be less troubled about free movement by the billionaire with Maltese citizenship than the poor Moldovan with a Romanian passport—I am not saying this is fine, just stating what is likely true. It shows that mutual trust and solidarity need not correlate. But more importantly, what if Member States would actually lose trust in Romania’s naturalisation laws because Moldovan nationals can acquire Romanian nationality with such ease. Would Romania then violate EU law? In other words, should the lawfulness of nationality law depend on the subjective assessments of other Member States? I may hope not in the times we live in, and I doubt this is the Court’s position for it would be at odds with Micheletti. But if not, it uses mutual trust merely as a pretext to rule out CBI, perhaps unable to find better arguments.

Apologies for the cynicism, but the Court interferes in the domain of nationality in by far the most far-reaching way to date, and all it offers in terms of justification is 11 paragraphs of cryptic reasoning without sound argumentation? Almost every first-year student in law will receive an introduction to principles of legal reasoning, and the importance of sound legal argumentation is emphasised throughout their studies. We likely also tell them that outcome isn’t all that matters. Steve Peers already commented that his students would barely get a pass if he would ‘read this reasoning on an EU law exam’. Should we apply lower standards to the EU’s highest court than we have of our undergraduate students? It is concerning that the Court doesn’t bother with legal reasoning—or worse, that it really cannot see its shortcomings. The quality is nowhere near what one should expect from a ruling of such constitutional magnitude.

 Unrestricted in time and scope?

One may also expect that our constitutional judges reflect on the consequences of their decisions and try being clear about them. Here, the ruling raises two additional concerns.

First, unless provided otherwise, CJEU judgments have automatic retroactive effect. Only exceptionally does the Court limit their temporal effects, but ‘such a restriction may be allowed only in the actual judgment ruling upon the interpretation sought’ (Meilicke, para 36). Of course, Malta should perhaps have asked the Court to limit the temporal effects of its judgment if it found that its CBI scheme violates EU law, but should the Court not have reflected on the issue on its own motion? It is not excluded that, in order to give full effect to the judgment, many will have to be stripped of their Maltese citizenship, perhaps rendering some stateless. Of all the people struggling to acquire or retain Union citizenship, the billionaire in the position to purchase a passport may not  be the first of our concerns, but it would be a little ironic (to put it mildly) if the end point of a judgment inspired by the values of solidarity and mutual trust was statelessness.

Second, the Court at the very least should have clarified the scope of its judgment. Make no mistake, this is a massive stretch from where the case law used to stand. It was settled that the withdrawal of EU citizenship could fall foul of Article 20 TFEU if the withdrawal decision was disproportionate (e.g. Rottmann and Tjebbes). The Court never offered an entirely adequate justification for these cases (see here for criticism), but one may find it logical that the deprivation of EU citizenship is subject to supranational supervision. In any case, the supervision was so minimal that the proportionality requirement could not even protect individuals from being rendered stateless (the outcome in Rottmann). In Commission v Malta, the Court decided to strike down an entire citizenship practice even though no one had been deprived of their rights – to the contrary – and it did not seek to soften the blow by way of a proportionality analysis. We have entered a completely new terrain.

Moreover, while the case is about the legality of one specific CBI scheme, the reach of the Court’s reasoning is much wider. The Court effectively interprets Article 20(1) TFEU as an obligation that nationality cannot be awarded if the special relationship of solidarity between that State and its nationals and the reciprocity of rights and duties has not been formed. At this point, CBI is far from the only nationality acquisition rule violating EU law. Until recently, Italian law allowed descendants of Italian citizens born abroad to acquire Italian citizenship without any generational limits. Descendants of Sephardic Jews forced into exile in the 15th and 16th centuries can acquire Spanish and Portuguese nationality.  Descendants of Irish nationals can apply for citizenship without having to show a special relationship of solidarity with Ireland, a possibility eagerly used by many UK nationals after Brexit. The problem with the Commission’s genuine link principle was always that it would affect many more nationality rules than just CBI. Although the Court avoided this principle, it did not avoid the problem: requiring a special relationship of solidarity should logically render many other nationality schemes unlawful under EU law. Or do we really want to go down the path of accepting that relationships of solidarity automatically exist whenever there is ethnic affinity?

Have the constitutional guardrails come off?

It should worry EU lawyers that EU institutions have in recent years so often circumvented the EU’s constitutional framework when political necessity so required. Yet in the face of unprecedented crises, the position that constitutional law must be prioritised over the common good, solidarity, or security has always struck me as a little too lawyerly. But Commission v Malta was not a case of political necessity but political expediency. If the Court is also willing to ignore constitutional constraints in such case, the constitutional guardrails will just come off. Is this really the right signal in light of the unprecedented constitutional challenges at the national level—that we can bend constitutional law to our will without offering a minimum of legal reasoning.

I would like to thank Fulvia Ristuccia, Vincent Delhomme, and the editors of GlobalCit and the Verfassungsblog for their sharing their thoughts on an earlier draft. I would also like to thank Filipe Brito Bastos for bringing up the retroactive effect of the judgment.