Dinner date but no deal: Cameron & Tusk extend talks on avoiding Brexit

European Council President Donald Tusk and British Prime Minister David Cameron are in for another round of "crucial" discussions after Sunday talks in London, sugar-coated by a three-course dinner, failed to produce a deal aimed at keeping the UK in the EU.

It was hoped the talks over dinner would help narrow the gap over Britain's disputed demand for more control over immigration. Alas, Tusk emerged from Cameron's 10 Downing Street office saying there was "no deal."

"No deal yet,” he wrote on Twitter. “Intensive work in next 24 (hours) crucial," the European Council president added.

Cameron tweeted that it had been a "good meeting."
A source, close to the negotiations, told Reuters that the politicians had allegedly reached agreement in just one of the four areas where Cameron wants to see reform.

A spokesperson for the British prime minister said that he had won "a significant breakthrough" by persuading the EU to say that the British government could trigger an "emergency brake" on welfare payments to migrants immediately.

Welfare benefits have become the key sticking point in Britain's negotiations with the rest of the EU. The British PM wants to exclude citizens of other European Union countries from benefits for four years (such as income top-ups for low-paid workers) until they have paid into the British system under a so-called "emergency brake" system.

READ MORE: ‘Emergency brake’ on migrant benefits could stave off EU ‘Brexit’

According to Cameron’s Conservative government, hundreds of thousands of people who have arrived in the UK from Eastern Europe burden schools, hospitals and other social services too much. EU leaders argue that denying benefits to EU citizens would undermine the right of people across the bloc to work and live comfortably in other member states, however.

A UK referendum on whether to remain in the bloc is set to be held by next year and could take place as early as June.

Last week, top EU politicians agreed that London could not remain Europe's financial center if Britain left the union in an upcoming referendum. Reaching a free trade agreement with Britain would not be the bloc's priority, they warned.

"There is no such thing as a free lunch. Brexit is something which does not only affect you but affects our country," former German Deputy Finance Minister Steffen Kampeter said.

"The cherry-picking proposal, after torturing us over months, is not acceptable," he added at Open Europe's "EU wargame" talks last Monday.

Kampeter noted that Germans would not support their government agreeing to a post-Brexit deal aimed at giving London an advantage over Frankfurt as a financial center. Former Irish Prime Minister John Bruton said Dublin would make an effort to take London's crown.

Former Italian Prime Minister Enrico Letta also said that Italy would support moving Europe's financial center away from London in case Britain left the bloc. France's Noelle Lenoir, a former minister of European Affairs, said the opportunity to move the EU's financial hub to a euro zone country "could be a blessing."

"How can you expect that after you leaving the European economy... that economy would accept that its financial center is outside its borders," Karel de Gucht, former European Commissioner for Trade, added.

Research from ORB International, a polling agency located in London, found last month that the UK is the only EU country of the 14 polled where a majority want to leave the bloc. “These results show that the UK really is the black sheep of the family,” Johnny Heald, managing director of ORB International said.

Former UK Prime Minister Tony Blair warned last week that Scotland could use an EU Brexit to break away from the United Kingdom.

“If the UK votes to leave Europe, Scotland will vote to leave the UK, I think,” Blair said, speaking to French radio station Europe 1.

“There are good strategic and economic reasons to stay in the EU,” he added.

Investment bank Credit Suisse has warned that a British vote to leave the EU could trigger a recession.

READ MORE: 28% of UKIP supporters would vote to stay in EU – poll

It is believed that three senior UK ministers, including Work and Pensions Secretary Iain Duncan Smith, Northern Ireland Secretary Theresa Villiers and Commons Leader Chris Grayling, will campaign to leave the EU however.