TOUGH TALK:  British Prime Minister David Cameron, second right, and European Union (EU) Council president Donald Tusk, second left, in Brussels on Thursday. EU leaders were set to thrash out an agreement with Britain on reforms. Picture: EPA
TOUGH TALK: British Prime Minister David Cameron, second right, and European Union (EU) Council president Donald Tusk, second left, in Brussels on Thursday. EU leaders were set to thrash out an agreement with Britain on reforms. Picture: EPA

BRUSSELS — European Commission chief Jean-Claude Juncker said he was confident of a deal to keep Britain from crashing out of the European Union (EU), despite sharp divisions among leaders at a crucial summit on Thursday.

The 28-member EU is battling its worst migration crisis since the Second World War and has proved unable to forge a common response to the wave of people arriving from the Middle East and elsewhere. Despite crucial questions about British Prime Minister David Cameron’s demands remaining unresolved at the start of the tense two-day summit, Mr Juncker played up the chances of an agreement to avoid a so-called Brexit.

"I’m quite confident that we will have a deal during this European Council. We have to sort out a certain number of questions," said Mr Juncker, the former Luxembourg prime minister who now heads the powerful executive arm of the EU.

European Parliament president Martin Schulz, who like Mr Juncker had held talks with Mr Cameron earlier this week, said there was a "great deal of interest in ensuring Britain remains in the EU".

Mr Cameron, under pressure from Eurosceptics in the centre-right Conservative Party and a hostile right-wing press, has demanded a series of reforms that will return powers to London ahead of a British referendum on whether to leave the EU.

But four eastern European states oppose Mr Cameron’s call for restrictions on welfare benefits to EU migrants working in Britain, while France leads opposition to protections for countries such as Britain that do not use the euro.

In a demonstration of the likely battles ahead, a leaked draft of the summit conclusions still had a number of crucial passages in brackets, including on the "euro-outs" and on migrant benefits, meaning they have not been agreed upon despite weeks of tense negotiations. If the summit fails to clinch a deal, Mr Cameron has said anything is possible, including Britain becoming the first country to quit the bloc after an in-or-out referendum that could be held in June.

EU President Donald Tusk warned late on Wednesday there was "no guarantee" of an accord.

In London, a UK government official said the prime minister had taken "a very personal involvement" in the talks and now "this is crunch time".

Mr Cameron has staked his political survival on winning the vote in the hope of ending a feud over Britain’s place in the EU that has plagued the Conservative Party for decades.

Britons voted overwhelmingly in favour of staying in the EU in a 1975 referendum, just two years after joining, when the then Labour government said the country would miss out on Europe’s growing prosperity if it left.

That is the same case made now — but with Britain more prosperous and growing faster than most of its EU peers, Eurosceptics say "Brexit" should hold no fears.

"My guess is that there will be an agreement, but this is so far away from the fundamental reform as to be, quite frankly, pitiful," Nigel Farage of the Eurosceptic UK Independence Party told AFP.

Mr Cameron has four major demands — welfare restrictions to help curb immigration, safeguards for non-euro Britain, increasing EU competitiveness, and an opt-out from closer EU integration. Brussels has offered an "emergency brake" to limit benefits for new migrants for four years after their arrival, which Britain could invoke if its welfare system were overwhelmed by the inflow of workers, as it believes it has been.

But Poland and other eastern European member states who have hundreds of thousands of citizens in Britain, bitterly oppose such a change, saying it would discriminate against them and undercut the EU’s core principle of freedom of movement.

The right-wing British press was dismissive, plastering front pages on Thursday with reports that the number of workers from other EU states in Britain had grown to 2-million.

Mr Cameron won crucial backing, however, from German Chancellor Angela Merkel, Europe’s power broker, who said Berlin had shared his EU concerns "for many years".

On Mr Cameron’s call that non-euro Britain have safeguards against closer integration of the single currency area, France insists that Mr Cameron must "in no circumstances" obtain a veto over the eurozone to favour the City of London financial hub.

AFP