EU referendum: Brexit will become a real danger if David Cameron fails to secure reform deal

The Prime Minister's demands must be moderate enough in European eyes to have hope of gaining acceptance

British Prime Minister David Cameron talks to the media at the end of a European Union Summit held at the EU Council building in Brussels (Getty)

David Cameron’s skills in brinkmanship will be tested to the limits on Tuesday as he presents his list of demands for reform to the president of the European Council, Donald Tusk, and delivers a speech selling that endeavour to the public on the same day.

The Prime Minister must choose his words with care. His demands must be moderate enough in European eyes to have hope of gaining acceptance. At the same time, if they are all mush and no meat, he can hardly present them to voters here as serious concessions, which justify Britain’s voting to remain in the EU in the in/out referendum. The stakes could not be higher for Mr Cameron personally in terms of his legacy, for Britain and for Europe.

Not long ago, it was fashionable in Europe to treat British demands as pure theatre. At the European Council in June, the British “question” took up all of 10 minutes. Now that Brexit is more of a threat, leaders sound worried, especially in UK-friendly Germany and Scandinavia. The Swedish politician Carl Bildt recently called a British exit from the EU a bigger threat to Europe than Russia or terrorism. What the Prime Minister needs is a bundle of reforms that will justify his campaigning in 2017 for Britain to stay in. He also needs to keep the pressure up, which is why he and other ministers endlessly raise the threat of exit if nothing is agreed.

The outlines of that “victory package” are no secret: an opt-out from ever-closer union, permission to restrict benefits to EU migrants, more powers to block EU legislation, safeguards protecting the City of London, and guarantees that Britain will not be excluded from decisions on single-market laws. Team Cameron is being careful to keep it vague in case things have to be watered down. The Foreign Secretary, Philip Hammond, has pointed out that Mr Cameron’s letter to Mr Tusk is unlikely to be “prescriptive”, while the Chancellor, George Osborne, sounded emollient in Berlin. There are signs of retreat in some areas. The original demand was to limit benefits for EU migrants for four years. Now the talk is about six months.

The real problem is not so much the demands themselves, with which several key EU players sympathise, in part. It is the route by which an agreement is achieved on them. Full-on treaty change, complete with referendums in all member states, is out of the question. The hope for Mr Cameron is a simpler mechanism, which presumably means the European Council issuing a legally binding agreement on its own, which the various EU member states then ratify.

Even in this best-case scenario, it is hard to see things going to plan. Why should poorer EU states ratify an agreement that restricts their nationals’ access to benefits in the UK? It is also not clear whether the process would have to be completed in all member states before the in/out referendum takes place in the UK.

Whether or not Mr Cameron was right to get into this particular fix, it is in no one’s interests – except the Eurosceptics’ – that he fails now. Mr Tusk must use all his negotiating skills to bring about an agreement that both he and Mr Cameron can claim as a victory. If not, the disaster of a Brexit will become a real possibility.