EU warns UK deal 'fragile' as Paris, East seek changes

Reuters News
Posted: Feb 10, 2016 3:09 PM

By Alastair Macdonald and Gabriela Baczynska

BRUSSELS (Reuters) - A draft accord to help keep Britain in the European Union is "very fragile", a top EU official warned on Wednesday as France and eastern states pushed for changes before leaders meet to try and seal the deal next week.

European Council President Donald Tusk, who agreed reform proposals last week with British Prime Minister David Cameron, said they were "balanced and solid" and he hoped to finalize them when he chairs a Brussels summit next Thursday and Friday.

"However, let me be clear -- this is a very fragile political process," he added, announcing that he had cleared his diary and would travel to Paris, Berlin and eastern Europe early next week "to secure broad political support for my proposal".

Tusk spoke on the eve of a second round of talks among the 28 EU leaders' top aides and envoys in Brussels. Officials said they will discuss a new draft with small, technical tweaks.

The first meeting of "sherpas", on Friday following Tusk's circulation of his reform proposals, saw participants broadly welcome a first draft as a way to help Cameron win a referendum in the coming months to prolong Britain's 43-year membership.

But on Wednesday, France, the traditional pro-European sparring partner of euroskeptic Britain, demanded significant changes, particularly to Cameron's effort to secure protections for the sterling-based City of London from possible EU measures favoring the majority of states which uses the euro.

Finance Minister Michel Sapin told lawmakers in Paris that the current draft must be amended to avoid skewing EU rules in favor of London, the bloc's leading banking center: "There are ... several ambiguities in the texts," he said. "Treatment must be as identical as possible. That's why we're fighting."

French concerns focus on British-based banks benefiting from different regulations to those in the euro zone -- less onerous capital requirements, say -- while retaining full access to the single European Union market in financial services.

And while Cameron has insisted he has not sought a veto over the euro zone's affairs, Paris also argues that the current wording of a new British right to delay euro zone decisions which it fears could hurt its interests must be amended to place tighter limits on how long London could hold up the process.


Eastern European negotiators also plan to seek amendments to limit the extent that their citizens may be penalized by a new "emergency brake" mechanism on EU immigration.

Under the Tusk proposal, governments who persuade their EU peers that immigration is jeopardizing their welfare system will be able to deny benefits to other Europeans for up to four years after they start work in that country. That stretches EU rules which ban discrimination among EU citizens on national grounds.

A draft statement seen by Reuters that was prepared by Poland, Hungary, Slovakia and the Czech Republic -- collectively the Visegrad Group -- broadly endorses the effort to appease London but says the welfare issue is a "primary concern".

It highlighted a lack of agreement yet on how long a state could go on applying the "brake" for new arrivals and said the overall period during which fresh immigrants could be penalized should not exceed four years. That would imply Britain ending the measures in 2020 if it imposed them this year as planned.

Diplomats said the aim was to settle as much of the reform plan as possible, leaving only certain elements to the summit.

"Everyone is fed up with this," one said. "We need to get this out of the way to be able to deal with other problems. So the common approach is not to hinder this process, help Britain solve its own internal problems and safeguard this compromise."

(Writing by Alastair Macdonald; Editing by Dominic Evans)