What’s at Stake as Britain and E.U. Discuss How to Maintain a Union

http://www.nytimes.com/2016/02/19/world/europe/european-union-david-cameron-brexit.html

Version 0 of 1.

Leaders of the European Union nations will meet on Thursday and Friday in Brussels in an effort to agree on changes to rules intended to persuade Britain to remain a member of the bloc.

If all 28 member nations agree to the changes, Prime Minister David Cameron will call a referendum on British membership in the bloc, probably for June. But there are no guarantees that the leaders will reach a deal on all the outstanding issues. Even if they do, Mr. Cameron could face a tough campaign to overcome antipathy to Brussels within his Conservative Party and to convince his nation that the benefits of remaining in the union outweigh the drawbacks.

Here are some of the key issues in the negotiations:

Q. What does the British government want?

A. Mr. Cameron’s demands go to the fundamental nature of Britain’s relationship with the European Union, including the rights of Europeans who move to Britain and the relative power of countries that use the euro as their currency versus those, like Britain, that do not:

■ The right to restrict welfare payments for four years for European Union citizens who move to Britain to work, including “in-work benefits” that typically supplement low-paid employees (this is sometimes referred to as an “emergency brake”). The right of citizens to move and work across European borders is one of the bloc’s core principles, and the British demand is seen in some countries, especially those in Eastern Europe, as impinging on that right.

■ Rules to ensure that banks and investment firms in Britain, which has elected to keep its own currency, are not at a competitive disadvantage in Europe to those based in countries that use the euro.

■ An exemption for Britain from a European treaty obligation to strive for an “ever closer union.” The phrase has come to be seen by many critics of the bloc in Britain as a commitment to surrendering evermore national sovereignty.

Q. Why do some members of the European Union oppose Britain’s demands?

A. Eastern European nations, from which huge numbers of workers in Britain have come, are wary of welfare restrictions, fearing the new rules could give their citizens second-class status. France is worried that the proposals related to the financial industry might give British companies an unfair economic advantage. And Belgium is unhappy about a British effort to pull back from an “ever closer union,” fearing it may weaken the bloc’s ambitions.

Q. If Britain is granted exemptions, will other countries make similar demands?

A. This possibility is one of the nightmares of European negotiators. The president of the European Council, Donald Tusk, has managed to prevent other nations from presenting their own wish lists, but if Mr. Cameron gets his way and negotiates what is seen as a good deal, political leaders in other European countries may decide that challenging the bloc can pay off.

Q. How are Britons expected to vote in a referendum on European Union membership?

A. Anti-European sentiment in Britain goes back decades and has long threatened to tear apart the Conservative Party. Even if Mr. Cameron gets everything he wants from the negotiation in Brussels, the outcome would be unlikely to change the minds of die-hard euroskeptics, who would vote to leave the union under any circumstances. But getting a good deal could help Mr. Cameron limit defections from his cabinet and could be vital in coming months to convincing undecided voters against leaving Europe.

Opinion polls show that Britons are divided, although most voters have not focused yet on this issue. The “remain” campaign is betting that the economic risks attached to leaving the European Union would prove influential. But referendums on European Union issues are difficult to win anywhere, and surveys show that Britons are among the most skeptical people in Europe about membership.

Q. Why is Mr. Cameron pushing for an early vote?

A. Mr. Cameron has pledged to hold a referendum by 2017, but one reason he is pushing to hold a vote sooner is believed to be a fear that the migration crisis will intensify during the summer, making the European Union look ineffectual and membership less attractive. Another is that Mr. Cameron wants to take the initiative while campaigners for a Brexit — a shorthand phrase for a British exit from the bloc — are divided over who should lead their campaign. And having outlined relatively modest ambitions for his renegotiation, it makes little sense for Mr. Cameron to drag out efforts to secure them. Should Mr. Cameron lose the referendum, it would imperil his ability to remain as prime minister.

Q. What happens if Britain decides to leave the bloc, and how long would it take?

A. Unless an agreement on withdrawal is reached earlier, or all of the nations in the bloc agree to extend the negotiating period, European Union treaties would cease to apply to Britain after two years. Britain would then no longer be a member. Agreements on trade, travel, regulation and a host of other issues would have to be renegotiated. Scotland, which tends to be more pro-Europe than the rest of Britain, could demand another referendum on independence, raising the possibility of Britain fracturing.

Q. Are migrants from inside the European Union a drain on the British economy?

A. According to some studies, citizens from other European Union countries collectively pay far more in taxes to Britain than they receive in state benefits. Mr. Cameron has focused on welfare because the British system, while not particularly generous by European standards, is easy to gain access to. Welfare claimants in Britain do not have to contribute before receiving benefits, and there are worries that the system provides an incentive for residents of less-prosperous countries, particularly in Eastern Europe, to come to Britain rather than stay at home or go elsewhere in Europe.

Q. What is the United States’ point of view on a possible British exit?

A. The United States has made clear on many occasions that it would like Britain to remain a part of the European Union. The United States trade representative, Michael B. Froman, said in October that there was no free-trade agreement that would apply to Britain if it left the bloc, and that the Americans have no interest in negotiating one.

Q. What would happen to European Union citizens living in Britain (and vice versa)?

A. This, and a vast array of other questions, would be covered by the negotiations. Common sense suggests that all sides would have an interest in minimizing disruption, but there is no guarantee that Britain and the 27 other nations will agree on the details of a new relationship, and the talks are likely to be complex.