EU draft deal: 9 key passages – and what they really mean

David Cameron has claimed the draft agreement on the UK's place delivers 'significant movement' - but is that true?

A letter sent by European Council President Donald Tusk to European Union leaders explains some elements of the draft deal agreed with David Cameron (Reuters)

1. "Legal acts... linked to the functioning of the euro area shall respect the internal market or economic, social and territorial cohesion, and shall not constitute a barrier to or discrimination in trade between Member States."

This is designed to ensure that, as Eurozone countries integrate their economies further, nothing is done or agreed that would discriminate against those countries that are not in the Eurozone. At the same time, these countries agree not to block further Eurozone integration.

However, critics point out that this agreement does not at this stage have the force of a treaty – and could easily be violated. If Britain were to vote to remain, they say, there would no longer be any incentive for other countries to pander to Britain’s interest, and they could take decisions that could adversely affect the economic dominance of the City.

The Government, for its part, has accepted that treaty change is impossible to achieve within the timescale of the referendum, and that at the moment this is the best that it will get.

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2. “The relevant EU institutions and the Member States will make all efforts to strengthen the internal market and to adapt it to keep pace with the changing environment."

Britain has long argued that EU regulations stifle business and that the single market has not adapted to allow new service industries (such as UK internet companies) to expand successfully across the EU. While the letter delivers warm words on both of these issues, in reality they are just that: warm words. Without ongoing political will in Brussels, there is nothing here to ensure things will change.

Governments are good at making regulations but much less good at getting rid of them – especially when they have to be agreed across such a wide range of countries with very different views.

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3. “The competences conferred by the Member States on the Union can be modified only through a revision of the Treaties with the agreement of all Member States.”

In itself, this is a statement of the obvious. But this section of the letter gets to the heart of David Cameron’s European negotiation dilemma: that the only way to get fundamental reform is by changing treaties, and that that is simply not possible in the time available.

Cameron on EU reform

Instead the whole document represents one huge “work-around”, trying to make small changes through backdoor protocols rather than changing the fundamentals of Britain’s relationship with the EU. This makes whatever is agreed next month easier for the Eurosceptics to challenge. Without any treaty change, they say, whatever is decided can be just as easily undone – and could also be challenged in the European Court of Justice, which takes treaties and not protocols as the basis for its decisions.

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4. “Where reasoned opinions... represent more than 55 per cent of the votes allocated to the national Parliaments, the Council Presidency will include the item on the agenda of the Council for a comprehensive discussion.”

This refers to David Cameron’s so called red-card demand to give national parliaments an effective veto over new EU legislation. Under the plan, if 55 per cent of national Parliaments (weighted by population) objected to a new EU law, they could block the plan and prevent it from happening. It builds on the current “yellow card” system, where if a third of European Parliaments object to a measure they can require the European Commission and Council to reconsider it. But critics point out that the “yellow card” has been invoked only twice (and was ignored by the Commission once). The 55 per cent threshold is much higher, they say, making it highly unlikely that it would be achieved.

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5. “Member States are able to take action to prevent abuse of rights or fraud and address cases of contracting or maintaining of marriages of convenience with third country nationals for the purpose of making use of free movement as a route for regularising unlawful stay in a Member State or for bypassing national immigration rules...”

In order to reduce migration from outside the EU, the Government introduced restrictions requiring any British citizen bringing a foreign spouse into this country to prove that they had the income to support them. But this did not apply to other EU nationals, and there is evidence of this fuelling sham marriages to get British residency. This part of the letter is designed to address these concerns.

Critics will say that proving a marriage is a sham is costly and easier said than done. Cameron has clearly failed in his objective to allow the wider British restrictions to apply to other EU citizens.

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6. “Host Member States may also take the necessary restrictive measures to protect themselves against individuals whose personal conduct is likely to represent a genuine and serious threat to public policy or security.”

This was a key demand of the Home Secretary Theresa May – who, it has been suggested, could end up leading the Leave campaign.

Effectively, this passage makes clear that Britain can restrict entry to EU citizens it considers a “threat” – even if they don’t have a criminal conviction.

However, as it is not written specifically into treaties it could still be challenged in the European Court – with no certainty that it would not be overruled by judges who interpret treaties and not protocols agreed between leaders.

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7. “A proposal to amend Regulation 883/2004 in order to give Member States, with regard to the exportation of child benefits to a Member State other than that where the worker resides, an option to index such benefits to the standard of living in the Member State where the child resides... ”

David Cameron has previously said that he wanted to ensure that EU migrants coming to live in the UK could not claim child benefit for their children unless those children were also living in the UK. HMRC figures show there are around 20,000 such claims each year.

But he has had to compromise because Eastern European counties complained that you could have a situation where a migrant was paying tax in Britain – but leaving their home country to pick up the benefits bill. So instead, Britain will continue to pay – but at the rate the migrant would have got in their home country. Again, Eurosceptics will claim that even this moderate demands has been watered down still further.

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8. "The limitation should be graduated, from an initial complete exclusion but gradually increasing access to such benefits to take account of the growing connection of the worker with the labour market of the host Member State."

This is the section of the text that deals with the so-called emergency brake – the wheeze EU lawyers have come up with to allow Cameron to restrict benefits to migrant workers without compromising the fundamental principles of freedom of movement. While the plan has been widely briefed, the text reveals that Cameron has been forced to give ground on the issue.

While benefits will be “limited” for four years, migrant workers will be entitled so some in-work benefits before then. In fact, the total ban on benefits will last only two years. The Prime Minister’s opponents will claim this does not even fulfil a much watered-down version of his original pledge.

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9. “The Council implementing act would have a limited duration and apply to EU workers newly entering its labour market during a period of [X] years, extendable for two successive periods of [Y] years and [Z] years.”

It is the X, Y and Z at the end of this passage that are important. The Commission has agreed in principle that the UK would be able to implement the emergency brake as soon as a successful “Remain” vote was announced, but it has not been decided how long ot would last. This is important because it suggests negotiations have so far failed to find a successful compromise and the issue will have to be decided at the European Council meeting later this month.

Mr Cameron is understood to want a break for an initial period of four years that could be extended to seven. This suggests that he is going to have to give ground.