david cameron, donald tusk.jpg
Photograph: EPA/FACUNDO ARRIZABALAGA

EU leaders insisted Thursday that a reform deal with Britain would not come at any price, ahead of "make-or-break" talks in Brussels at which the country's continued membership in the bloc is at stake.

"I will be battling for Britain. If we can get a good deal, I will take that deal, but I will not take a deal that doesn't meet what we need," British Prime Minister David Cameron said as he arrived for the two-day talks with his 27 EU counterparts.

"This is a make-or-break summit," said EU President Donald Tusk. "We are in the middle of still very difficult and sensitive negotiations," he added.

Fears are rife that Britain - the world's fifth largest economy - might decide to leave the European Union in a referendum that Cameron has promised to hold by the end of 2017, but that is widely expected this year already.

Many worry that Brexit - the buzzword for a British departure from the EU after more than 40 years of half-hearted membership - would reduce the bloc's global influence at a time when it is struggling with a migration crisis and enduring economic woes.

"The reaction [to Brexit] would surely be a wave of nationalism and separatism washing over all of Europe," Czech Prime Minister Bohuslav Sobotka told domestic lawmakers earlier Thursday, according to the CTK news agency.

German Chancellor Angela Merkel said keeping Britain in the EU is a matter of "national interest" for Berlin.

But with Cameron demanding reforms in the areas of sovereignty, immigration, economic governance and competitiveness, the EU's 27 other member states have refused to budge on basic values, such as the freedom to live and work anywhere in the bloc.

Belgian Prime Minister Charles Michel said he would do everything to keep Britain on board. "But not at the cost of dismantling the European project," he warned.

"I want Britain to remain in the EU, but above all I hope that Europe can advance, can be stronger and that nobody, no head of government or head of state can prevent it," added French President Francois Hollande.

One of the crunch issues is a British demand to curb welfare payments to European workers, with a row brewing in particular over the issue of child benefits to Europeans whose families live outside Britain.

European Commission President Jean-Claude Juncker warned that any special rules applied to child benefits would encourage attempts to curb other payments, such as pensions. "That has to be blocked from the start," he said.

Other unresolved issues relate to a British exemption to the EU's stated goal of "ever closer union," as well as a proposed mechanism for non-eurozone countries such as Britain to raise concerns about initiatives taken by the currency bloc.

But despite the unresolved issues, several leaders were hopeful of reaching a deal.

"I think we have a good chance to make an agreement. I am rather optimistic," said Hungarian Prime Minister Viktor Orban. "I think everybody will have [their] own drama and then we will agree," added Lithuanian President Dalia Grybauskaite.

Speculation has been rife that if a deal is reached, it will pave the way for Cameron to call the referendum for June 23. It is hoped that the vote will end more than three years of uncertainty since Cameron first announced his intention to hold a referendum in early 2013.

"If it turns into a victory, it will be a victory for all 28," said Dutch Prime Minister Mark Rutte on his way into Thursday's talks.

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