Brexit proposal is impressive start but ‘nothing is agreed’

The publication of a draft proposal outlining the terms of a new EU relationship for Britain sets the scene for two weeks of intensive negotiations. And that is even before the cut and thrust of the British referendum campaign begins.

Publishing the proposals on Tuesday, European Council president Donald Tusk warned of "challenging negotiations ahead". Describing the text as "a good basis for compromise", he warned that "nothing is agreed until everything is agreed".

The draft document on a "new settlement for the United Kingdom within the European Union", as the proposal is officially called, is an impressive feat by EU negotiators, who have managed to address the main concerns of Britain in four key areas without infringing on the fundamental rules of the European Union.

Nonetheless it marks only an interim stage in the process. While Tusk had already taken into account the “red line” issues for each member state following bilateral meetings last year, the draft proposal on offer still contains some uncertainties that will need to be clarified in the coming weeks. This includes more detail around the emergency brake on benefits, including when it will be triggered and how long it will last – an issue that will be of most relevance to central and east European countries who have significant numbers of citizens living and working in Britain.

Further clarification on the safeguard clause for non-euro zone member states will also be required, with member states likely to oppose anything that is deemed to give preferential treatment to the City of London. In this regard, Irish officials in Brussels will be closely examining the economic governance elements of the package.

Despite the close interdependency between the Irish funds industry and the City of London, anything that would enhance Britain's competitiveness and damage the single market will be resisted by Ireland, as much as the euro zone heavyweights like France who have consistently flagged the issue in recent months.

Member states will have the opportunity to give their first official response to the document on Friday when ambassadors and senior EU officials from each member state meet in Brussels. European Commission president Jean-Claude Juncker's update to the European Parliament on Wednesday morning in Strasbourg will also be closely watched.

Diplomatic offensive

As well as technical negotiations at official level in Brussels in the run-up to the European Council on February 18th and 19th,

Mr Cameron

is expected to launch a diplomatic offensive to shore up political buy-in for the deal.

On Friday he travels to Poland and Denmark for talks. Both countries elected new governments last year and will be anxious to ensure that any deal for Britain does not alienate their own voters.

On Thursday, Mr Cameron will meet German chancellor Angela Merkel at a Syria conference in London, with bilateral talks also scheduled for Hamburg on February 12th.

Much of Britain's focus behind the scenes will be on the countries of central and east Europe who have already signalled resistance to anything that may be deemed discriminatory to their citizens.

The Visegrad group of former Communist countries comprising Poland, the Czech Republic, Hungary and Slovakia, are due to meet on February 15th just ahead of the February summit. Ensuring that these countries are on board will be essential for Britain if a deal is to be reached in two weeks' time.