Only rarely do lawsuits at the Luxembourg-based European Court of Justice create such a stir as the case of Elisabeta Dano. The complaint filed by the young unemployed Romanian woman trying to receive social welfare in Germany became a symbol of the controversy over mass immigration to wealthier EU countries.

She has been living with her sister in the eastern German city of Leipzig since 2010 and has never worked in either Romania or Germany. The social welfare authorities paid out child benefits and, temporarily, an alimony downpayment. Dano then applied for the long-term unemployment benefit known as Hartz IV - without success. She took the authorities to court over the matter, and a Leipzig court turned the case over to Luxembourg due to its fundamental importance.

A clear decision

The verdict handed down today leaves no room for ambiguity: European regulations allow host countries to deny unemployed immigrants social welfare payments under specific circumstances. If the duration of residence is between three months and five years, as in Dano's case, people without a source of income will be required to have sufficient resources of their own at their disposal.

If that is not the case, countries may refuse to pay if a person entered solely in order to obtain the host state's social assistance. Having said that, the ECJ judges added that every case had to be reviewed individually - the verdict was not designed to generally bar out-of-work immigrants from receiving social welfare.

Behind the Dano case lurk conflicting interests and legal questions over which the European Commission and EU member states - in this case Germany - are at odds. The problem became more pressing after freedom of movement came into force for Romanian and Bulgarian citizens at the beginning of 2014.

At the same time, the European Commission had given its assessment of the Dano case, suggesting that Germany make unemployment benefits more easily accessible - which in turn prompted resentful reactions from conservative politicians in the country. In February, the German government established a task force to look into further regulations to prevent abuse of the social welfare system. Also subject to debate here - at the instigation of the conservative Christian Social Union - is the question of how to prevent certain immigrants from claiming child benefits. Now the ECJ has, at least, provided German policy makers with a guideline for all further discussions of the issue.

Positive reactions

"I'm happy, this is a good verdict," said Thomas Mann, and social policy expert in the European Parliament for Germany's Christian Democratic Union. The court sent out a clear message, he continued, and to him it was of particular importance that the verdict provides a basis for standing up to the euroskeptic Alternative for Germany (AfD) populists: they will not be able to continue spreading their cheap polemics any more, according to which Europe lacks regulation and protection against misuse of social security benefits.

His Social Democrat colleague Jutta Steinruck welcomed the verdict as well: "It confirms current German legal practice and, first and foremost, creates legal certainty for local authorities," she said. Indeed, to date German courts had found different verdicts in similar cases. For example, in the western state of North Rhine-Westphalia some courts agreed with the plaintiffs, so that communities had to pay up. However, Steinruck emphasized that while loopholes allowing abuse of freedom of movement had to be closed, immigration on the whole was a great benefit for Germany. And, she continued, it was essential not to create a two- or three-tier society with respect to social welfare recipients - it fell to policy makers to balance this out.

A ghost debate

Professor Herbert Brücker, senior researcher at the Nuremberg Institute for Employment Research (IAB) considered a huge slice of this debate to be political rhetoric: "There is no social welfare scrounging in Germany." Only 195 cases of potential benefit abuse had been uncovered by his organization, he said.

Apart from that, the ECJ verdict meant essentially that the status quo remains for Germany. Admittedly, in the course of the year the number of social welfare beneficiaries among Bulgarians and Romanians had increased by around 66 percent. However, their overall percentage was still below the proportion of Germans or immigrants from other countries receiving unemployment benefits, Brücker explained. In addition, he pointed out that, on balance, German pension funds and health insurance institutions receive more benefits from Romanian and Bulgarian employees than the social security funds have to pay them. As a matter of principle, his institute has found, notably Romanians are, contrary to common prejudice, particularly well integrated into the German labor market.