It is often held that free movement within the European Union and the expansion of social rights of mobile citizens by the European Court of Justice place national welfare states under pressure, potentially leading to welfare retrenchment. Yet thorough empirical investigation of this claim has been surprisingly limited. In this article, we distinguish three possible responses to such pressures: 'embedding', the inclusion of Union citizens in the welfare system; 'quarantining', restrictive measures excluding mobile Union citizens; and 'retrenchment', general cutbacks in benefit programmes. Through a longitudinal comparative case study of generous non-contributory welfare benefits in Denmark and the Netherlands, we find general welfare retrenchment in response to Europeanisation strikingly limited. Instead, welfare states remain resilient by creatively quarantining mobile Union citizens from the coverage of social benefits. Legal cultures and degrees of politicization are important factors, shaping the pathways towards these creative but exclusionary responses.