UK and Germany say EU reform must be fair to non-euro members

LONDON Fri Mar 28, 2014 9:29am EDT

Britain's Chancellor of the Exchequer George Osborne delivers a speech on the forthcoming Scottish independence referendum in Edinburgh in Scotland February 13, 2014. REUTERS/Scott Heppell/Pool

Britain's Chancellor of the Exchequer George Osborne delivers a speech on the forthcoming Scottish independence referendum in Edinburgh in Scotland February 13, 2014.

Credit: Reuters/Scott Heppell/Pool

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LONDON (Reuters) - Germany joined Britain on Thursday in calling for European Union reforms that are fair to (EU) countries outside the euro zone, bolstering British Prime Minister David Cameron's attempts to placate eurosceptics at home.

In a joint editorial in the Financial Times, British and German finance ministers George Osborne and Wolfgang Schaeuble said it was important that EU countries outside the euro zone - like Britain - are not disadvantaged by deeper integration of the currency union.

German support came as Cameron has been trying to satisfy powerful eurosceptic factions in his Conservative Party as well as voters defecting to the anti-EU UK Independence Party (UKIP).

"Future EU reform and treaty change must include reform of the governance framework to put euro area integration on a sound legal basis, and guarantee fairness for those EU countries inside the single market but outside the single currency," Osborne and Schaeuble wrote.

Cameron has promised to negotiate sweeping changes to the terms of Britain's membership of the EU and, if re-elected next year, to hold a referendum by 2017 on whether Britain should stay in the 28-country bloc.

Cameron's office said that German support was a "welcome development" in Britain's effort to end a system whereby non-euro zone states had to negotiate on a case-by-case basis for exemptions and safeguards to make sure the push for deeper euro-zone integration did not disadvantage them.

"LEVEL PLAYING FIELD"

"Making sure that the UK and other countries outside the euro remain on a level playing field is vitally important," a spokeswoman for Cameron said. "What is significant now is, as we move on with taking forward this EU reform, we have got the German finance minister saying we should look at how we can put this on a firmer footing in terms of the treaties."

Earlier this month, Cameron outlined the areas in which he planned to reform Britain's relationship with Europe, including an effort to prevent mass migration and EU interference in police and judicial matters.

Cameron has so far received a lukewarm reception for his renegotiation bid from European leaders, and a poll on Sunday suggested Britons are skeptical about his chances of success.

French President Francois Hollande poured cold water on the prospect of major EU treaty changes, while a high-profile visit to Britain by German Chancellor Angela Merkel yielded only limited backing for reforms.

But, citing recent proposals by Germany to protect its welfare system from abuse by migrants, Cameron's spokeswoman said he remained confident of achieving his target to reform the bloc and win a referendum to stay in the EU.

"There are signs that the debate that he is leading for reform across Europe is really taking hold, with other countries coming out on issue like cutting red tape, or addressing these issue of the abuse of free movement," she said.

Cameron's Conservatives are expected to suffer in European elections next month as voters increasingly turn to UKIP to express their frustration with perceived meddling in British affairs by European authorities.

Britain joined the EU in 1973 but, like Denmark and Sweden, kept its national currency and monetary policy when the euro was launched in 1999.

(Editing by Mark Heinrich)

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