The UK has been threatening to leave the European Union for some time, but with Britain preparing for a referendum on EU membership this year, a British exit from the EU, or Brexit, is becoming a real possibility.

If the UK leaves the EU... another main financial centre will emerge in Europe, that could be Paris, Frankfurt or another place.

Karel Lannoo, CEO, Centre for European Policy Studies

British Prime Minister David Cameron has warned his European counterparts that the UK could leave if it fails to meet his country's needs. He says he wants to stay in the Union, but not under current rules.

Cameron recently travelled to Brussels armed with a package of reforms, demanding controversial concessions, the kind which require an actual change in EU treaty terms.

Cameron's proposed reforms included restricting benefits for up to four years for EU migrants arriving in Britain; to be able to opt out of the EU's drive to pursue an "ever closer union across Europe"; plus, a stop to the financial regulation which some believe is strangling business in Britain.

But the reforms are just one part of the situation, because with or without them, there will be a referendum in the UK which will settle its membership once and for all.

Karel Lannoo, the CEO of the Brussels-based Centre for European Policy Studies, joins Counting the Cost  to discuss Brexit and what this could mean for the UK and the EU.

Source: Al Jazeera