After a series of decisions, the Court of Justice of the EU has been accused of undermining the value of Union citizenship as a tool to overcome the confines of ‘market citizenship’, thereby conferring residence and equal treatment rights to all Union citizens, regardless of economic status. This chapter argues that, rather than ‘abandoning’ Union citizenship, the Court has evolved its approach in these cases following the adoption of Directive 2004/38. The Court treats residence and equal treatment rights under the Directive as a closed system, with lawful residence under Article 7 of the Directive being the gateway to citizenship rights. Whilst this is legally coherent, strict reliance on the Directive is liable to create problems, particularly for low-wage workers and the economically inactive. The closed system of residence and equal treatment rights potentially results in more insecurity when (i) Member States systematically check the individual’s residence status when assessing social assistance claims; (ii) the individual applies for permanent residence status and must prove lawful residence for a continuous period of 5 years; and (iii) returning to their home Member State with a third country national spouse following a period of residence in a host Member State.

The market logic of the internal market has historically meant that EU citizens engaged in economic activity in a host-Member State obtain a secure form of lawful residence and far-reaching rights. For economically inactive citizens there is a less secure status in terms of residence, as well as more limited and conditional rights. The traditional case law of the Court of Justice of the EU has had the effect of protecting EU migrant workers in lower-paid employment. However, in the light of recent legal developments, some have suggested that this traditional position is being undermined. This chapter assesses the extent to which the EU legal system excludes those EU migrant workers on the fringes of economic activity. It begins by assessing how the ‘working proletariat’ should be understood in the 21st Century. It then analyses the development of the law of freedom of movement for workers and EU citizenship. Concretely, it claims that the introduction of Union citizenship, rather than offering a safety net for EU migrants regardless of their legal status, in some cases actually resulted in less protection than previously for EU migrant workers. Finally, it analyses the legal and wider implications of the exclusionary system.