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Half a month ago, I had asked this question which was part of my research.

I am closely following the developments about the Golden visa schemes in the EU and EU's efforts to stop them and put them to an end. In a nutshell, the EU (Commission and Parliament) thinks that they are very risky, bringing criminals, tax evaders etc.. into the EU. EU has formally asked member states to phase them out, but it is clear no member state wants to do that.

My previous question has an answer that concludes that EU cannot make the member states phase these schemes out because the EU Council (consisting of member states' Governments ministers) would never agree to do that. It would require both the EU council and EU parliament to agree to pass a decision. But that is clearly not possible as member states want their schemes to continue.

In this context, how would the EU manage to get rid off these schemes when it is impossible to convince the EU Council? What alternative tactics are likely to be implemented that EU Council would have no problem with but will lead to a decrease in the popularity of the golden visas?

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    If the Council is not on board, “the EU” does not think or want anything. As the answer to your earlier question revealed, the Council is a key institution. I am not sure what you are referring to but I am guessing you mean (some part of) the EU Commission. – Relaxed Sep 2 at 23:29
  • Yes you are right. EU Commission and EU Parliament want to end such schemes. EU Council is unlikely to agree. – Andrew Rozario Sep 3 at 4:42
  • @Relaxed Do see my comment to Erwan's answer. – Andrew Rozario Sep 3 at 4:48
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    This is an important distinction, you should really stop thinking and writing “the EU this” or “the EU that”. The EU hasn't reached a consensus. In this like in so many other matters (this isn't even the most contentious or most important one), the Commission cannot easily have its ways and is limited to writing reports, building coalitions, etc. to influence the process, nothing more. The Parliament has even less power. – Relaxed Sep 3 at 8:06
  • +1 I agree with you. Doing a google search like this one reveals that it is the EU Parliament that wants to abolish golden visa schemes. So you are right, I will keep that in mind not to refer it as "the EU wants this or that". – Andrew Rozario Sep 3 at 8:16
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Politically speaking, there are a few options that a group of (strong) EU member states could use to coerce others to drop their golden visas schemes:

  • Political quid pro quo across various issues: identify something that the target state needs or wants and exchange support on this issue against the target state dropping their golden visa policy. Naturally the success of this kind of strategy depends how much the anti-golden visa countries are ready to give away for this to happen.
  • An obvious variant of the first option is some kind of financial deal which compensates the golden visa countries for the loss of income, for instance by giving them access to some special loans for specific development projects for instance. This would be some morally questionable backroom politics, but it's not outside the realm of reality.
  • raising a strong PR campaign which would hurt the reputation of the target countries if they don't drop their golden visas schemes. This is fairly doable because the golden visas schemes are usually something that regular citizens don't like, but to be successful such a campaign would have to cause enough reputational damage (e.g. loss of tourism income) for the target countries to re-consider their golden visas schemes.
  • Threaten to leave the Schengen area: if free movement within the EU was restricted to only a few countries, the golden visas would lose a lot of their appeal. This is unrealistic though, since free movement is a crucial symbol of the EU identity.
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  • +1 Nice answer. Regarding the last point; you mention that although unrealistic, the EU could threaten to kick them out of Schengen Area. How likely is an event that the EU decides to restrict all the people who obtained citizenship through golden visas from movement across the EU and just stay in the country that granted them golden visa? That is, is it possible that in the end, if the EU cannot make these countries give up golden visa schemes, the EU will amend the Free Movement directive to restrict the movement of such golden visa persons to the country that granted them golden visa? – Andrew Rozario Sep 3 at 4:38
  • This will, in effect create a 2 tier EU citizenship, one the normal one and the other golden visa one, the latter being deprived of the right of free movement. This could make schemes in countries like Malta, Cyprus, Bulgaria etc unpopular as investors generally want to access the EU, not the countries they invested in especially when they are like Malta or Cyprus. Moreover, even if the schemes remain popular, free movement restrictions will stop criminals from travelling to other member states and thus those criminals' activities will only be restricted to the country that granted them visa. – Andrew Rozario Sep 3 at 4:54
  • I think this is a likely action. What is your opinion? Could EU use this tactic? Or is EU against creating a 2 tier citizenship? – Andrew Rozario Sep 3 at 4:55
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    @AndrewRozario What you propose seems unthinkable to me. What Erwan suggested is different: kicking the whole country out to exert pressure. That's not likely but legally and politically less of a breach of EU principles. – Relaxed Sep 3 at 8:10
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    @AndrewRozario That would be a fundamental attack on the member states' sovereignty and redefinition of the nature of EU citizenship. The Commission could hardly do that through secondary EU law, freedom of movement and EU citizenship are anchored in the treaties (and confirmed by EUCJ case law). The comparison with the US is relevant: the EU Commission is not in a kind of quasi-colonial relationship with member states, that's just not how it works. If there was even the suggestion of something like that, I fully expect France, Germany, etc. to be strongly opposed and to kill it within hours. – Relaxed Sep 3 at 8:29
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I assume that Golden Visas are actually EU citizenships in exchange for a large investment or something like this.

I can try to give a solution which is already possible under EU Directive 2004/38/EC.

Let's say we have a Russian citizen who recently acquired a citizenship of Cyprus. Then all other EU member states may restrict freedom of movement and residence of such citizen based on a threat against public health, policy, or security according to Article 27 of EU Directive 2004/38/EC.

Every person has a name, date and place of birth regardless of a citizenship. Therefore, even if Cyprus will not inform other EU member states that it gave a citizenship of Cyprus to a certain Russian citizen, other EU member states may restrict freedom of movement and residence of such person.

Citizenship law is not in competence of EU, so I cannot imagine that EU can prohibit Golden Visas - every state will see it little bit differently.

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    Note that Golden visas are akin to Permanent residence (or a pathway to PR). Golden passports mean selling citizenship, which is also the case for 3 EU countries. – Andrew Rozario Sep 2 at 17:25
  • I greatly appreciate your effort to find a solution. +1 for that. But is it okay that member states reject freedom of movement and residence of such citizen based on a threat against public health, policy, or security? For no reason? – Andrew Rozario Sep 2 at 17:27
  • EU states may restrict any person based on a threat against public health, policy, or security. So it can be applied also to third-country citizens with a (permanent) residence card which extemps e.g. from Schengen visa requirement in other Schengen states. – user108860 Sep 2 at 17:29
  • How would the member states know who became a citizen by golden passport? – Andrew Rozario Sep 2 at 17:31
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    If we talk about a known criminal, then the EU states would know. Otherwise, why would you restrict every person who got Golden Visa/Passport unless they are threat to public health, policy, or security? I personally have something like Golden EU Passport because I found the right ancester. Should I be also restricted? – user108860 Sep 2 at 17:39

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