When the UK's David Cameron bids to renegotiate Britain's membership deal with the EU at this week's Brussels summit, he could face a tough choice: a row with Europe or a row with Eurosceptics at home? Ciara Lee reports.
Limbering up to push EU leaders at this week's Brussels summit on a deal to keep Britain in the bloc - British prime minister David Cameron was talking the talk in parliament. (SOUNDBITE) (English) BRITISH PRIME MINISTER, DAVID CAMERON, SAYING: "This government was the first to cut the EU budget, it was the first to veto a treaty, the first to bring back substantial powers to Britain. We've got a great record on Europe and we'll get a good deal for the British people" But Cameron is caught between a rock and hard place - face a row with Europe or one with Eurosceptics at home? His bid to renegotiate the terms of Britain's membership is in jeopardy over a demand to make it harder for EU migrants to get benefits. German Chancellor Angela Merkel is keen to keep Britain in - but says it cannot compromise on core principles such as free movement. Opinion polls show British voters evenly split with a significant number yet to make up their mind. Commerzbank's Peter Dixon one economist weighing up the possible cost. (SOUNDBITE) (English) COMMERZBANK, GLOBAL FINANCIAL ECONOMIST, PETER DIXON, SAYING:: "Clearly this is a big event risk for 2016 which I think has the potential to shock. Frankly we are in uncharted territory. If you just look at the academic evidence, which suggests that Brexit would cost say two percentage points off GDP over say a ten year horizon. I mean that would effectively knock a quarter of a percentage point off in the medium term." More than a third of Cameron's party are thought to be toying with the idea of a Brexit. The timing of the referendum remains unclear but Cameron wants it as soon as possible. If he gets a deal by February the vote could be as early as June.