'No guarantee' for summit agreement on David Cameron's EU reforms


David Cameron is heading to Brussels for a crunch summit of European leaders with key elements of his demands for change in Britain's relations with the EU still in dispute.

A new draft of the reform package circulated to EU leaders late on Wednesday night by European Council president Donald Tusk made clear that agreement has not been reached on highly complex financial rules designed to protect the interests of members which do not use the euro.

The Prime Minister faces two days of tough negotiation over relations with the eurozone, benefits for migrant workers and his demand for treaty change if he is to return to London on Friday and declare a date for the long-awaited in/out referendum on EU membership.

Following phone talks with Mr Tusk late on Wednesday, Mr Cameron insisted there was a "good basis for agreement", and UK officials said Britain was "in a good place" going into the summit of 28 national leaders in the European Council.

But Mr Tusk warned there was "no guarantee" a deal would be reached.

In an eve-of-summit letter, Mr Tusk told EU leaders: "The negotiations are very advanced and we must make use of the momentum. There will not be a better time for a compromise."

Failure to reach a deal at the European Council gathering would be "a defeat both for the UK and the European Union, but a geopolitical victory for those who seek to divide us", he warned.

Mr Tusk's latest proposals - drawn up after a round of whirlwind diplomacy which saw him fly to capitals around Europe, including some of the eastern states with gravest concerns about restrictions on migrant worker benefits - show only minimal progress since an earlier draft last week.

Crucially, the document adds square brackets to a section relating to protections for non-euro states as the single currency integrates further, indicating that this is an issue which has not been settled in negotiations at official level and must be thrashed out by leaders round the table in Brussels.

The new text also removes a reference to the European Council using an "implementing act" to impose an emergency brake on migrant welfare at times when member states are facing extreme pressure from the volume of arrivals. An act of this kind can be used to bypass the European Parliament and its removal has sparked speculation that MEPs may be given a role in deciding whether the brake may be applied.

Also still in question is the duration of any brake. The UK initially wanted to be able to impose it for seven years, while the European Commission favoured two years with an option for a two-year extension.

Meanwhile, a provision that could have made the benefit curbs available only to Britain and other countries that did not impose transitional restrictions on migration when the EU expanded in 2004 has been removed, suggesting they will now apply to all member states.

This will be very poorly received by the Visegrad group of countries in eastern and central Europe - Poland, Hungary, the Czech Republic and Slovakia.

And eastern European states are standing firm on their insistence that changes to child benefit rules, which would cut payments to the offspring of migrant workers living in their home country, should apply only to new claims and not to the 34,000 already receiving payments form the UK.

Mr Cameron is also facing resistance to the rewriting of EU treaties to include Britain's hoped-for exemption from the requirement to seek "ever-closer union", as well as the protections for non-eurozone states.

Following Wednesday night's phone call, a Downing Street spokeswoman said Mr Cameron and Mr Tusk had agreed that "good progress" had been made and the new draft text presented "a good basis for agreement" subject to "the satisfactory resolution of outstanding issues".

Mr Cameron will be making a last-ditch push to overcome eastern European objections to changes to welfare rules for migrant workers as well as resistance from the likes of France and Belgium to his demand for EU treaties to be rewritten to incorporate British gains from the renegotiation.

But Britain made clear that the PM is ready to walk away without agreement if he cannot secure a satisfactory package.

"This is crunch time," said one UK official. "We need to secure the right settlement for the British people."

The Prime Minister was boosted on Wednesday by German chancellor Angela Merkel's declaration that most of his demands were "justified and necessary", while French PM Manuel Valls said authorities in Paris "believe and hope" it will be possible to keep the UK in the EU.

The summit begins after Office for National Statistics figures on Wednesday found the number of EU migrants working in this country increased by 215,000 to just over two million in the last quarter of 2015 compared with a year earlier.

The first session in Brussels will provide an opportunity for each of the 28 member states to set out their views on the UK demands.

Officials are then expected to work late into the night hammering out the shape of a possible final deal, while leaders discuss the migration crisis over dinner.

On Friday morning - in what Brussels wags are calling the "English breakfast" - the leaders will return to the table to thrash out remaining points of difference and determine whether they can craft a package acceptable to all.

If Mr Cameron gets a deal, he will fly back to London for a special Cabinet meeting to endorse the package and name a date for the referendum - widely expected to be June 23.

From that point, Eurosceptic ministers will be freed to campaign for Brexit, with all eyes on suspected waverers like Michael Gove and Boris Johnson to see which side they back.