Cameron sees progress on deal to avoid ‘Brexit’ on eve of key EU summit

Brussels / Bloomberg

Prime Minister David Cameron edged closer to securing an overhaul of the terms of Britain’s membership of the European Union, as fellow leaders signaled they were ready to help him get a deal at this week’s EU summit.
With Cameron due in Brussels on Thursday for the second time in 48 hours, he won the backing of Chancellor Angela Merkel of Germany, the 28-nation bloc’s largest economy, who told lawmakers in Berlin on Tuesday that she’ll do everything possible to keep the U.K. in the EU, according to a party official who attended the closed-doors meeting.
The British premier made a last-minute round of calls to leaders including Dutch PM Mark Rutte, holder of the EU’s rotating presidency, who agreed that “there was a good basis for a deal” at the two-day summit, albeit with “important detail” still to be settled, Cameron’s office said in a statement.
“It’s important for all parties, politically and economically, for the U.K. to remain in the EU,” Rutte said in a statement after his call with Cameron. “If we get this right, we can strengthen European cooperation.”
Uncertainty over the UK’s future status is already rippling through markets and unsettling businesses in the countdown to Thursday’s summit. With the outcome set to determine the timing of the government’s referendum on EU membership, the pound slumped on Tuesday to approach the more- than-one-year low reached last week.

Industry View
The Confederation of British Industry, Germany’s BDI industry lobby and 20 counterparts in other EU countries added to the calls to keep Britain in the bloc with an open letter released on Wednesday urging Britain to remain a member. “European business strongly supports continued British membership of a European Union that takes the necessary reforms to be competitive, outward-looking and continue delivering growth, jobs, peace, security and prosperity for all,” business chiefs from Ireland to Poland and Finland to Malta said in the letter.
Industry backing followed an unexpectedly warm reception for Cameron on Tuesday in a series of meetings in Brussels with senior European Parliament members who will be pivotal in driving some of the changes he’s demanding through the bloc’s legislature. They included the parliament’s president, Martin Schulz, and the heads of the three biggest caucuses. Schulz said the assembly, which would need to pass certain provisions after a deal, would act “as fast as possible” to find solutions to the issues raised by the U.K.
Convincing France of the case to award Britain further exemptions from euro-area integration that would allow the U.K. to shield the financial industry in the City of London has emerged as one of the key obstacles to a deal this week. The PM failed to win the full backing of President Francois Hollandeat a meeting in Paris on Monday described by a French official as constructive but which left differences remaining.
Some eastern EU countries are still unconvinced by his demands to curb benefits for non-British citizens. With polls suggesting the outcome of the referendum is uncertain, Cameron is aiming to shore up support among EU leaders for the compromise deal offered by European President Donald Tusk, who published an initial package on Feb. 2.
Merkel, who was due to meet with Tusk late on Tuesday, told her caucus that the proposals he’d agreed on with Cameron were fair and a reasonable basis for negotiations, according to the party official, who asked not to be named as her briefing was private. Among Cameron’s four demands for EU reform, she singled out his attempt to secure an exemption for the financial industry from euro-area regulation as difficult. At the same time, she said it should be possible with some caveats, the official said.
“I have no doubt that there’s an extra mile we have to walk to reach an agreement on Thursday,” Tusk said at a news briefing in Prague with Czech PM BohuslavSobotka. Cameron spoke by phone with Sobotka as well, and both agreed that further discussions are necessary to pin down all the details.