Cameron, EU leaders still have 'lot to do' to reach deal

BRUSSELS -- British Prime Minister David Cameron forged ahead at tougher-than-expected talks with European partners Friday after meetings through the night failed to make much progress on his demands for a less intrusive European Union.

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It's potentially a pivotal moment for the 28-nation bloc, which is proud of its decades of integration among once-enemy nations across Europe. At a tense summit in Brussels, Cameron and other EU leaders staked out firm positions -- in part to show voters back home that their interests are being defended.

"We've made some progress, but there's still no deal," Cameron said as he returned for talks just hours after wrapping up meetings at 5:30 a.m. "We're going to get back in there. We're going to do some more work -- and I'll do everything I can."

Many Britons question whether belonging to the bloc is still worth it, so Cameron is pushing for an EU reform deal that he hopes will persuade voters to back continued membership in a British referendum that could come as soon as June.

An EU-wide breakfast meeting that was to address Cameron's concerns was first delayed until lunch and then until mid-afternoon, as Cameron met with EU President Donald Tusk, Italy's Matteo Renzi and Polish Prime Minister Beata Szydlo in a bid to close the gap on issues including financial governance and welfare benefits.

A British official speaking on customary condition of anonymity said Friday morning that gaps had narrowed, but "nothing is agreed until everything is agreed."

Another European official said Friday that none of the sticking points had yet been resolved -- but no new problems had emerged either. The official spoke on condition of anonymity because the consultations were confidential.

Tusk has said he is willing to continue meetings through the weekend if necessary. Lithuanian President Dalia Grybauskaite said how long it took to get a deal depended on "what kind of deepness of drama countries would like to perform."

"But no matter what we do here, no matter what face-lifting or face-saving we perform here, it is up to the British people to decide," she said.

The draft deal offers guarantees to the nine EU countries, including Britain, that do not use the shared euro currency, that they will not be sidelined, and makes tweaks aimed at giving national parliaments more power.

Most of the tensions surround a relatively minor change: a move to suspend or restrict benefit payments made to workers from other EU countries.

Immigration is an especially sensitive point for British voters, because Britain has attracted hundreds of thousands of workers from Eastern Europe in the past decade, drawn by the prospect of higher-paying jobs. The EU immigrants can also claim child tax credits and other benefits in Britain, which Cameron's government says is straining his budget.

Cameron has proposed reducing one payment -- the child benefit, given to all families with children -- to migrants from other EU nations for as much as 13 years. Eastern countries want to limit the change to only three or four years, according to one European official involved in the talks.

Czech Prime Minister Bohuslav Sobotka said the 13-year period "is very long, and it doesn't reflect the measure that is meant to have a temporary character."

Cameron has also run into unexpectedly firm resistance from France on financial regulation. French President Francois Hollande insisted Friday that Britain should not be given any "right of veto or blockage" and that all EU countries should have rules limiting speculation and avoiding new financial crises.

The 19 EU countries that share the euro currency worry that protections for Britain and the eight other non-eurozone nations would offer unfair advantage to Britain's financial centre, the City of London.

Hollande also warned that too-generous concessions to Britain could prompt other countries to seek special rules, too.

However, EU leaders ultimately want Britain, a major world economy, to stay in the bloc.

Dutch Prime Minister Mark Rutte argued Friday for the importance of keeping Britain's free-market voice in the EU.

A British exit "would be bad news for the EU -- but also for the U.K. It would end up as a mid-sized economy somewhere in the middle of the Atlantic Ocean," he said.

Estonian Prime Minister Taavi Roives acknowledged that leaders at the summit are "pursuing our national interests" but said they all want Cameron to get the deal he needs.

Even if Cameron wins a deal, the referendum is expected to be close and hard-fought. Opponents have said his demands of the EU are too weak.

Tycoon Richard Branson argued Friday for Britain to stay in the EU.

"It would be very, very damaging for Great Britain ... and I think it would be the start, most likely, of the breakup of the European Union," he told Sky News.

Britain has stayed out of both the EU's euro currency and its passport-free Schengen travel zone, and many Britons resent what they see as Brussels increasingly meddling in sovereign issues.

Cameron said he would not stop other EU members striving for more unity, but insisted that Britain should have ironclad guarantees it could stay on the sidelines.

Angela Charlton and Lorne Cook in Brussels contributed


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