France raises objections on deal to keep Britain in the EU

EU-chief Donald Tusk was in Paris on Monday to try to win the French leadership over for a proposal to keep Britain in the EU, ahead of a crucial EU summit later this week. The deal could give Britain powers to veto decisions on the eurozone despite the fact that the UK is not part of the 19-country monetary union.

France has earlier reiterated that it would rule out the introduction of any steps that would amount to countries outside the eurozone vetoing any measures intended for the stability of the eurozone itself. French President Francois Hollande had already announced earlier this month that there could be "no veto by countries outside the eurozone" on eurozone policies.

Paris maintains that the "euro-outs" like Britain should not have any say in the decisions of the eurozone, as it still struggles with the fallout from its debt crisis. However, French Finance Minister Michel Sapin said that Britain and its financial system belonged squarely in the European Union.

"Certainly, there are changes to be made, there needs to be more democracy in the workings of Europe but there are also some simple principles to be observed," Sapin said.

"The first principle is that the economic and monetary union (of the 19 eurozone countries) is going to be deepened, that it must be deepened, and on that nobody can oppose it."

In particular, France has expressed doubts on the wording of the proposal to give London a voice in decisions on the euro even though Britain does not use the EU common currency.

Tusk embarks on tour to win hearts and minds

European Council President Donald Tusk compiled a package designed to avoid a "Brexit" in an upcoming referendum. Among the proposals, there would be a news mechanism allowing non-euro countries to raise their concerns about decisions by eurozone nations which may affect their economies.

Tusk notably sought to reassure countries such as France that this would not amount to giving non-euro states a final say on such matters. Britain has a special opt-out on the euro, but ultimately the single currency is supposed to become the unit for the whole EU.

Tusk has started touring key EU capitals in a final push to reach a deal at the crucial Brussels summit. Last-ditch talks scheduled in Berlin, Paris, Athens and other capitals are intended to press key leaders to arrive at an agreement despite what he called a "very fragile" situation. He had warned recently that the prospect of Britain potentially leaving the EU felt like "the day before World War I."

Other EU nations weigh in

EU members Poland, Hungary, Slovakia and the Czech Republic have been the most vocal nations against plans to allow Britain an "emergency brake" on welfare benefits for EU migrant workers. Romania has also expressed reservations over the issue as part of a growing opposition.

Each one of those countries has hundreds of thousands of citizens working in Britain, who might have to rely on public benefits if they were to lose their jobs. They say that Tusk's proposal to let Britain curtail welfare for newly-arrived EU workers for four years could be discriminatory and breach the bloc's core principle of freedom of movement.

Britain, meanwhile, regards the proposals as a compromise after initially calling for a complete freeze on eligibility of benefits for foreign EU nationals. One of the main unresolved issues is how long Britain could keep the proposed brake in place, with London saying that it wants seven years.

The proposals could turn into a bargaining tool at the negotiation table, as other EU nations have started to weigh in on how the deal could benefit or harm them.

Facing criticism from the rest of the EU for its handling of the ongoing migration crisis, debt-ridden Greece could attempt to extract concessions for agreeing to a British deal. Italy could also raise demands for leeway on budgetary rules which it has to adhere to under eurozone guidelines, as the Mediterranean nation aims to take a more prominent role at the EU's top table alongside France and Germany.

Cameron hopeful on reaching an agreement

British Prime Minister David Cameron meanwhile said he was confident of succeeding with the deal but said that he ruled nothing out if he does not get an agreement.

Cameron has pledged to hold a referendum by the end of 2017 but has indicated that he would like to reach a deal at the upcoming summit in order to allow time to arrange the plebiscite as early as June, before the migration crisis is likely to flare up again over the summer.

German Chancellor Angela Merkel has been supportive of Cameron's negotiations, while insisting that the EU's underlying principles could not be changed. Merkel said that her "wish" was to avoid a so-called "Brexit."

Opinion polls are roughly split on whether Britons would vote to remain in the EU or leave. It last voted on the issue in 1975, two years after joining what was then the European Economic Community. However, a new survey revealed that businesses in the UK were increasingly alarmed about a potential Brexit.

The EU already faces questions about the bloc's future as it struggles with the continent's biggest migration crisis in 70 years, and with renewed fears about the health of the euro currency.

ss/rc (AFP, Reuters)