The internal market is a large trading unit with no internal barriers to trade. The creation of the internal market is one of the central purposes of the European Union. Article 26(2) of the Treaty of Functioning of the European Union (TFEU) stated that “internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties”. Under Article 26 of TFEU, four freedoms identified which are the free movement of persons, free movement of services, free movement of goods and free movement of capital. In our hypothetical situation, we will only be looking at free movement of persons and free movement of…show more content… CD 2004/38 sets out the conditions in which Union citizen and their families exercise their right to move and reside freely within the Member States, the right of permanent residence and restrictions of free movement rights on the grounds of public policy, public security ort public health.
Article 6(1) of CD 2004/38 provides Union citizen the right of residence in ‘host’ state for a period up to three months without any conditions or formalities except to hold a valid identity card or passport. Article 6 of CD 2004/38 also applies to family members who are not Union citizen to accompany or join the Union citizen with a valid passport. Article 2(2) of CD 2004/38 defines family members of Union citizen as the spouse, registered partner, direct descendants and dependant direct relatives of the Union citizen. In Netherlands v Reed [1986], European Court of Justice (ECJ) stated that the term ‘spouse’ means only to a marital relationship. In addition, Article 3(2) of CD 2004/38 also stated that ‘host’ state shall ‘facilitate’ entry and residence of other family members fall outside the definition of Article 2 of CD 2004/38 who are dependants or members of the household of the Union citizen having primary right of residence or have serious health issues which require the personal care by the Union citizen and he has a durable relationship with the Union citizen.