EU leaders have taken varying positions on Cameron’s renegotiation demands. The Social Democrat-Christian Democrat Coalition Government in Austria has been protesting the proposals in protest at Britain’s reluctance to share migrants. The Social Democrat Swedish Government is supporting Britain. The Centre-Left coalition in Czech Republic has strongly protested the welfare reforms. The Christian Democrat led coalition in Germany has not ruled out treaty change but Merkel’s position is obfuscated. The Socialist Government in France is a strong opponent of the British reforms. The Conservative Government in Hungary has also hit out at the reforms. The Populist Right Government of Poland is also against the proposals. But the Centre Right Government in Netherlands is supporting Cameron.

Those favoring Brexit argue that withdrawal would reverse immigration, free Britain from an economic burden and save billions of taxpayer’s money. Britain being outside the EU would be free to rescind EU laws and regulations. Some estimates put the benefits at several per cent of GDP. The UK’s net contribution to the EU is about £9bn a year which is a substantial sum. Euroseptics argue that UK is suffocated by employment legislation. Britain is also culturally, linguistically and legally aligned with the Commonwealth countries and so has options of trade outside EU too. Those thinking otherwise argue that such withdrawal would lead to deep economic uncertainty leading to millions of jobs losses. Also Britain would then face the common external tariff. British companies would find it difficult to comply with EU regulations in order to gain access to the Single Market. Business investment in Britain might drop, with falls in foreign direct investment and withdrawals by overseas firms. Whether a British exit from the EU would diminish or enhance the country’s standing and influence is an open question.

Also United States has presently ruled out a separate trade deal with UK if it leaves the European Union. Whether UK would be successful in negotiating favourable trade deals with other countries like China, India also needs to be seen. But a tiny non EU member like Switzerland has managed to sign a favourable trade agreement with Japan, a country with which the EU could not seal a deal till date. So, Euroseptics argue that mere exit from EU may not pose any terrible loss to the country. Germany’s close relationship with Poland also works unfavorably as Poland staunchly objects to the Britain’s proposals as the proposals are generally seen as discriminating against East European countries.

Whether the “Norwegian option” can be emulated is also a hotly debated question. Norway has negotiated a semi-detached relationship with the EU through its membership of the European Economic Area. European Economic Area membership gives Norway full access to the EU’s internal market, allowing it to trade goods with EU states without customs fees. Norway is obliged to implement all the EU’s laws relating to the internal market. Though Norway has representatives in EU institutions, they have no decision-making power in how EU rules are drafted. But still Norway has higher per capita immigration than Britain, also Britain has more control over its borders than Norway, which is part of the Schengen border-free area. Thus there are disadvantages of the “Norwegian option”, as Norway had to accept EU regulations, yet had no vote or influence in Brussels, makes a contribution to the EU budget and yet has no effective control over its borders.

Though there is general consensus among the EU members that the UK’s In-Out referendum will not force open Europe’s treaties, yet it is viewed as a “pandora’s box”. A new European treaty would require ratification in 28 national parliaments and potentially trigger referenda in many other member states.

On Cameron’s demand of a “multi currency union”, European Central Bank fears that it could lead to a breakaway regulatory regime for non-eurozone countries as other countries may try to avoid its obligation to join the euro.

After the two-day Brussels summit of the EU leaders on 17-18 December, 2015, Cameron has finally cleared the way for a UK referendum on EU membership next summer. His renegotiation at another summit in February next year, may be the last opportunity before holding the referendum. A “Brexit” is now more likely than ever due to the tough stand taken by Cameron and the entrenched position of many EU leaders. With the recent accusations against the Tories of a “migration cover-up”, the Euro Wars have just begun!

UK is one of Europe’s “Big Three” states. The erstwhile European Economic Community was created by the Treaty of Rome of 1957. Belgium, France, Italy, Luxembourg, the Netherlands and West Germany were the founding members. United Kingdom alongwith Denmark, Ireland joined in 1973. In 1980, Greece, Spain and Portugal joined. Following the creation of the EU in 1993, an additional sixteen countries had become members. Upon the formation of the European Union in 1993, the European Economic Community was incorporated and renamed as the European Community. In 2009 the European Community ceased to exist as it was absorbed into EU. Membership of the European Union has always been a controversial issue in the United Kingdom. As per the Conservative Party manifesto’s commitment to hold a referendum on EU membership, the present United Kingdom European Union membership referendum bill is now under consideration. The first referendum was held in 1975 when membership was approved, this will be the second referendum.

In a letter to Donald Tusk, the President of the European Council, the Cameron government has recently expressed concern about the pressures that free movement has brought on the schools, hospitals and the public services. Unlike some other Member States, Britain’s population is increasing and it will become the most populous country in the EU by 2050. Also the net migration is running at over 300,000 a year which is also not sustainable. Controlling immigration from not only outside the EU but also inside the EU is urgently required. Britain further wants to find arrangements to allow a Member State like the UK to restore a sense of fairness to its immigration system and to reduce the current very high level of population flows from within the EU into the UK. Cameron claims that these have been unplanned and are much higher than forecast, and far higher than anything the EU’s founding fathers envisaged. These very substantial flows of population have also had a significant impact on a number of Member States, many of whose most highly qualified citizens have departed en masse. On the abuse of free movement, tougher and longer re-entry bans for fraudsters and people who collude in sham marriages are now being sought by Britain. It is easier for an EU citizen to bring a non-EU spouse to Britain than it is for a British citizen to do the same. Also stronger powers to deport criminals and stop them coming back, as well as preventing entry in the first place is on the reforms agenda of Britain. ECJ judgments have even widened the scope of free movement in a way that has made it more difficult to tackle the abuse.

The most contentious proposal is that people coming to Britain from the EU must live in Britain and contribute for four years before they qualify for in-work benefits or social housing. Eastern European countries are most resistant to this change and there could be retaliatory action by Poland and other eastern European countries too. The Tory Government also wants to end Britain’s obligation to work towards an “ever closer union” as set out in the Treaty through a formal, legally-binding and irreversible way. This is intended to ensure that UK is never forced to join any future European superstate.

The Conservative government further wants the EU to recognise many principles like that the EU has more than one currency (and not the sole Euro); there should be no discrimination and no disadvantage for any business on the basis of the currency of their country; integrity of the Single Market must be protected; any changes the Eurozone decides to make such as the creation of a banking union, must be voluntary for non-Euro countries, never compulsory; taxpayers in non-Euro countries should never be financially liable for operations to support the Eurozone as a currency, just as financial stability and supervision has become a key area of competence for Eurozone institutions like the ECB, so financial stability and supervision is a key area of competence for national institutions like the Bank of England for non-Euro members, and any issues that affect all Member States must be discussed and decided by all Member States. But the recent Labour Party’s campaign for the UK to remain in the EU has made the situation more complex.