02:00 - Source: CNN
What is the European Union?

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NEW: Discussions about a deal to keep Britain in the EU have begun

Prime Minister David Cameron tries to deal firmly with EU yet campaign to stay in it

Britain has always stood apart from the European project to some extent

CNN  — 

With a critical summit meeting of EU leaders underway, Britain’s continued participation in the European Union – and, indeed, the future of the EU itself – still hang in the balance.

The heads of government of the 28 European Union countries – from Finland to Portugal and from Ireland to Greece – converged on Brussels, Belgium, on Thursday afternoon for meetings that could set the course of the continent for decades to come.

The bottom line is this: Britain wants to play by special rules – not paying benefits to migrants from other EU countries, for example, and tossing aside any shred of commitment to the EU’s long-cherished goal of “ever-closer union.”

Otherwise, Prime Minister David Cameron threatens, the British people in a referendum are likely to take their marbles and go home, pulling out of the European Union and dealing with it from the outside.

A deal is needed for Cameron to campaign among his people for a yes vote – perhaps as early as June – to stay in the EU.

The leaders of other European Union countries, to generalize, resent Britain’s demands for special rules and exemptions. On the other hand, if Britain pulls out, that will leave the European Union significantly diminished. It would lose its second-largest economy – behind only that of Germany – and one of its two permanent seats on the U.N. Security Council. (The other is held by France.)

So what happened Thursday?

The 28 leaders met Thursday afternoon, discussed the issues and then dined. They will make no decision until Friday.

Any deal must be approved unanimously – a steep hill for anyone to climb. The European Parliament also must approve.

German Chancellor Angela Merkel said Britain’s demand not to pay benefits to migrants from other EU countries remains a sticking point.

“All of the different baskets of the requests of Britain on the agenda were discussed, and it is true that not each and everyone around the table had it all that easy to agree to those requests, but there is a will,” she said.

Swedish Prime Minister Stefan Löfven told reporters that leaders are hoping to reach an agreement as quickly as possible.

“Everybody says that we want to reach an agreement. … It’s a big country. It’s an important country,” he said. “We do not need a European Union that cannot hold together now, so we are determined.”

A report Wednesday in The Guardian newspaper said four Eastern European countries – Poland, Slovakia, Hungary and the Czech Republic – have rejected Britain’s proposals to limit benefits for migrant workers. The report emerged a day before the Brussels meeting.

The EU sprang from the ashes of World War II as a free-trade zone. Its signal achievement has been to allow free movement of goods and people in the hope that economic integration would prevent a new continental war.

Britain has opted out of both those EU provisions, and it views with skepticism the EU’s effort to branch into new fields, regulating everything from pesticides to human rights, and creating a unified foreign policy, too.

What is Cameron trying to achieve?

In essence, Cameron is trying to thread the needle. He wants to be able to say the he negotiated firmly with the bureaucrats – sometimes called “eurocrats” – in Brussels. He wants to opt out of the standard EU commitment that its members must work toward “ever closer union.” He wants Britain exempted from having to give various social benefits to newcomers – even from other EU countries – until they have lived in the country for several years.

In the end, he wants to say he has dealt strongly with the unpopular EU – and, hey, let’s stay in that fine organization because of course it’s in our interest.

Why do many in the UK want to quit?

Part of it relates to migration, and the large numbers of people fleeing the civil war in Syria have only increased that fear. There is a feeling that new arrivals sponge off British taxpayers, or take their jobs, perhaps for less pay than a native Briton would demand, driving wages down and unemployment up.

Police spray tear gas at migrants trying to access the Channel Tunnel in France.

There seems a whiff of cultural bias as well among a few opponents of British membership in the EU. While there is no outcry about immigration from the United States or Australia, for example, some members of the main anti-EU party, UKIP – the United Kingdom Independence Party – have made remarks that seem tainted by prejudice.

And there is an element of nationalism. There is reluctance to cede sovereignty to the EU, which is part and parcel of membership, to some degree.

Have there been problems before between EU and UK?

Oh, yes, indeed.

Britain has always stood apart from the EU, displaying a bit of the island mentality.

France's Charles de Gaulle, second from right, opposed UK entry into the Common Market.

While much of the EU involves passport-free travel between member countries, not so with Britain. And when many EU countries scrapped their national currencies in favor of the euro, Britain said no thanks, we’ll stick with the pound.

The country’s difficult relationship with the EU is nothing new. In the 1960s, French President Charles de Gaulle not only opposed Britain’s entry into what was then called the Common Market, he also opposed any negotiations on the topic. In other words, he wouldn’t even discuss it.

Britain didn’t join the European Community, as it was then called, until 1973, by which time de Gaulle was dead.

And in the 1970s and ’80s, Prime Minister Margaret Thatcher railed against what she saw as the excessive powers of Brussels. She negotiated a rebate for Britain on its contributions to the EU and opposed having “a European super state exercising a new dominance from Brussels.”

Is there a chance Britain will leave the EU?

Certainly. National referendums can go either way. The British press is largely hostile to the EU, and sometimes presents a distorted picture of it.

Reading the local papers, one might think, for instance, that the EU has a massive bureaucracy. In fact, the EU employs about 23,500 people to look after its 28-nation area. By contrast, there are about 6 million government employees in the UK alone.

And the historic number of people fleeing conflict and poverty in the Middle East and North Africa – most of them bound for Europe – only increases the chances that Britons, fearful about their jobs and their national identity, will try to pull up the drawbridge and go it alone.

Furthermore, while Cameron expects to campaign for Britain to stay in the EU, his Conservative Party is divided on the issue, with some senior members favoring an EU exit.

Still, analysts say it is generally harder to vote for change than for the status quo. Leaving the EU would be change. And that engenders its own fears.

Leaders in some other countries favor an EU with Britain in it. It makes dealing with Europe easier, gives Europe a stronger voice in the world and allows for coordinated European sanctions to be imposed – for example, against Russia for its annexation of Crimea, or against Iran for its nuclear program.

For his part, U.S. President Barack Obama has urged Britain to stay in the EU. The UK as a member of the EU “gives us much greater confidence about the strength of the trans-Atlantic union,” Obama said in July.

CNN’s Pierre Meilhan and Catherine E. Shoichet contributed to this report.