EU heads into difficult 2016 amid Brexit fears

Will they stay or will they go? This could just as well be the unofficial slogan of the European Union in 2016, with one of its largest member states possibly headed for the exit.

Britain has long been a reluctant member of the 28-country EU, wresting special arrangements from the bloc and challenging integration efforts over the years.

Now, British Prime Minister David Cameron has promised to hold an in-out referendum on EU membership. The stability of the bloc and its international influence hangs in the balance.

"The stakes are so high that we cannot escape a serious debate with no taboos," EU President Donald Tusk had written to the bloc's national leaders before they met with Cameron in mid-December for a first showdown.

Tusk later told journalists that he thought the EU had survived a "make or break" meeting. But a tough road still lies ahead.

Cameron has promised to hold the referendum by the end of 2017, but many analysts expect him to do so already in 2016, especially if Tusk manages to broker a deal between leaders in February on Britain's demands for EU reforms.

Cameron is seeking changes that he says could help avert a referendum vote in favour of Brexit, as Britain's potential departure from the EU has come to be known. His reform demands touch on competitiveness, national sovereignty, economic governance and social welfare.

But his proposals are controversial, most notably a demand that other EU citizens should be required to work in Britain for four years before qualifying for welfare benefits.

Eastern European countries have been particularly vocal in criticizing the measure, but a survey carried out by the Centre for European Reform (CER) think tank found that virtually all EU member states are opposed to welfare discrimination against their nationals.

"Only Ireland and Finland may appear to be more flexible. Keeping Britain in the EU seems to be more important to them," CER researcher Agata Gostynska-Jakubowska wrote. "But even these governments feel uneasy about Cameron's support for discriminatory measures."

She also predicted that Cameron would struggle to secure any formal recognition that membership in the eurozone is voluntary. Britain is not part of the European currency area and does not plan to join it.

Any British attempts to change EU treaties are expected to face resistance too, given the long and tortuous history of past attempts.

London may find allies in Cyprus, Hungary, Ireland, Malta and Poland, Gostynska-Jakubowska predicted. Italy has also made a point of showing support for Britain.

In a text recently published by the Daily Telegraph newspaper, Britain Foreign Secretary Philip Hammond and Italian Foreign Minister Paolo Gentiloni wrote that their countries "agree on the need for a deep reform of the EU."

"A successful EU will be one which can combine ... different visions of Europe and embrace that diversity," they added.

Many analysts are still optimistic that Britons will not vote for Brexit, notably because of the economic impact it would have. Britain would lose access to the European border-free market with some 500 million consumers.

"Half of all the United Kingdom's trade is with the EU," ING bank analyst James Knightley noted. "Any uncertainty - even if the UK eventually votes to remain within the EU - poses a major risk to the UK economy."

"[Cameron] will win the British referendum on EU membership, ... not because he is so brilliant, but because the British are not suicidal," Jan Techau of the Carnegie Europe think tank added.

An average of polls conducted in December suggests that 56 per cent of voters want Britain to remain in the EU.

But a more detailed poll by YouGov suggested that perceptions of the success of Cameron's negotiations could still affect the vote, with more people saying they would opt to leave if they believed Cameron had achieved little or no change.

The "spiral of alarm and negativity" surrounding immigration, heavily covered by major media outlets, will also "clearly have an influence" on the outcome of the referendum, said researchers Geoffrey Evans and Jonathan Mellon of Nuffield College at the University of Oxford.

A recent Eurobarometer survey found that 61 per cent of respondents in Britain identified immigration as one of the most important issues facing the EU.

Whatever the vote on Brexit may end up being, it will set a precedent - at a time when Europe is contending with eurosceptic and separatist movements keen on pursuing their own agendas.

"Once the referendum genie is out of the bottle, it is very hard to put it back in," Carnegie Europe analyst Stefan Lehne said.

"National governments will not think of the UK's concerns first, but of their own interests," Vivien Pertusot of the French Institute of International Relations added. "EU member states want the UK in the EU, but not at all costs."

Last update: Fri, 24/06/2016 - 08:49

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