This week in lonely battles: David Cameron vs. the EU

LISBON, Portugal — For most European leaders, the discovery that citizens of neighboring countries have made a collective $32 billion contribution to your country's finances should come as good news.

If they were to hear two days later that Europe's foremost investment bank was making its biggest-ever loan — another $2.4 billion — to revamp your aging power grid, that should be the cherry on top, right?

Not if that leader is David Cameron.

Britain's prime minister has been fighting a lonely battle to convince other European Union leaders that his country pays too much into the EU's coffers and that he needs to erect barriers to halt an influx of European immigrants bent on scrounging off the UK’s welfare system.

So a study last week showing that immigrants from other EU nations have contributed the equivalent of $32 billion more in taxes than they claimed in benefits over the past 10 years hasn't exactly helped his case.

Likewise the decision by the EU's lending agency — the European Investment Bank — to pump $2.4 billion into an overhaul of the National Grid.

However, Cameron is soldiering on undaunted.

"Britain’s future in Europe matters to our country and it isn’t working properly for us at the moment," he told business leaders in London on Monday. "We need to make changes."

His campaign to push through those changes — in particular by rolling back the right of workers to move wherever they can find work within the 28-member EU — is placing serious strain on Britain's relations with the rest of Europe.

German Chancellor Angela Merkel has reportedly warned she'd rather see Britain leave the EU than erode the free movement of labor principle that lies near the center of the EU's drive to build a common economic market.

The new European Commission president, Jean-Claude Juncker, last week said Cameron had become an isolated figure at EU summits. "He has a problem with the other prime ministers," Juncker told reporters at the bloc's headquarters in Brussels.

The spat with Europe over migration has become a dominant issue in British domestic politics, exacerbating divisions with Cameron's Conservative Party ahead of general elections expected in May.

The prime minister’s problems stem from the rise of the nationalist UK Independence Party, which has enjoyed a surge in support by calling for tighter immigration controls and a British exit from the EU.

UKIP came first in elections last May to select Britain's representatives in the European Parliament — the first time that the Conservatives or their Labour Party rivals have failed to win a nationwide election since World War I.

To make matters worse for Cameron, two Conservative members of the British parliament have defected to UKIP, giving the new party its first seats in the House of Commons.

"UKIP is the only party with a credible, coherent, and balanced approach to migration," says Mark Reckless, one of the ex-Conservative lawmakers. "Neither Labour … nor the Conservatives support an EU exit — the essential precondition for managed migration."

Reckless is tipped to win a partial election next week to keep his seat in southeastern England for UKIP.

Cameron is concerned more Conservative legislators — and voters — will join the UKIP upstarts unless he maintains a tough line on Europe and immigration.

This week the prime minister was savaged by both UKIP and right-wingers in his own party for ending a boycott of the European Arrest Warrant, which allows prosecutors to pursue suspects across EU borders.

"There are lies, damn lies and then there’s David Cameron’s position on the EU," columnist Tim Stanley wrote in The Daily Telegraph, a conservative London newspaper, after a parliamentary vote on the warrant Tuesday.

Supporters say the system is an effective tool against cross-border crime, including terrorism and human trafficking. Euro-skeptics see its facilitating the handover of British citizens to face trial in foreign courts as a threat to British freedoms.

Meanwhile, the government is considering calls from the right to pull out of the European Convention on Human Rights, set up after World War II with the help of Conservative icon Sir Winston Churchill to underpin fundamental freedoms across the continent. Britain has also refused to back an EU mission in the Mediterranean to rescue migrants making perilous clandestine boat journeys to Europe.

Cameron is acutely aware that Conservative divisions over Europe brought down his illustrious predecessor Margaret Thatcher and weakened her successor John Major, helping to usher in 13 years of Labour rule from 1997 to 2010.

So in an effort to keep his euro-skeptics on board, he's taking the fight to Europe. So far, however, Cameron is neither placating the right at home nor making much progress with his calls for reform in Europe.

His angry refusal to pay a $2.6 billion contribution to the EU budget last month was rejected by other EU leaders. Although he was able to push back the deadline for handing over the money, right-wingers railed at another climbdown.

"We're meant to cheer?" asked Daniel Hannan, a Conservative member of the European Parliament. "Britain is worse off in absolute terms."

Merkel and other European leaders insist Cameron's talk of imposing quotas on European workers seeking to cross the Channel is an absolute no-go.

It wasn’t always this way.

Free-market conservatives used to support the opening of Europe's labor markets. Restrictions were seen as a competitive handicap for Europe compared to other big economies like the US, where workers are free to move where jobs are.

Since the arrival of around a million Eastern Europeans — mostly from Poland — after the EU expanded eastward in 2004, however, conservative euro-skeptics have fumed.

UKIP, backed by mass-circulation tabloid newspapers, regularly denounces welfare "scroungers" and criminals coming from the continent.

"No Benefits for Migrants," squawked a headline last week on the front page of The Daily Express.

Its rival, The Daily Mail, had a scoop this week claiming hundreds more Eastern Europeans were heading to Britain after being hired to make snacks for leading retail chains. "Is there nobody left in Britain who can make a sandwich?" asked a headline taking up much of Monday's front page.

Plenty of figures contradict the tabloid narrative of eastern migrants sponging off Britain's welfare system.

Last week's study by University College London showed that Eastern Europeans contributed about a quarter of the $32 billion net contribution to Britain's public finances by EU migrants between 2001 and 2011.

The EU itself says the benefit from migrants goes well beyond their fiscal contributions, saying their role filling skills gaps in the employment market adds 1.2 percent to Britain's economic output every year.

Officials in Brussels also point out that around 1 million Brits have taken advantage of free movement rules to set up in other EU nations.

And, they emphasize, those rules already restrict migrants hoping to move from one country to another just to pick up welfare. That was confirmed this week by the EU's Luxembourg-based high court, which ruled that a Romanian woman and her son had no right to reside and claim unemployment benefit in Germany.

EU countries "have the possibility of refusing to grant social benefits to economically inactive union citizens who exercise their right to freedom of movement solely in order to obtain another member state's social assistance," the European Court of Justice said.

That makes it harder for Cameron to argue that he needs to tear up the EU's free labor movement principles to stop "welfare tourism."

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When he met this week in Finland with leaders from northern European countries — who frequently side with Britain on economic issues within the EU — Cameron's migration proposals got a chilly reception.

Finland's Prime Minister Alexander Stubb said free labor movement was "rather sacred" in the EU and worried the immigration debate in the UK has "spun out of control."

Nevertheless, Cameron seems determined to push ahead. He's expected to announce detailed proposals for restricting European migration by the end of the year.

Although it's hard to see how he can satisfy euro-skeptics at home and win over his counterparts on the continent, the future of the Conservative government — and Britain's EU membership — may depend on his success.