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George Osborne tells EU: change or we'll quit

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Nicholas Cecil and Joe Murphy

11 January 2013

George Osborne today bluntly warned that the EU must change for Britain to remain a member.

In what will be seen as an explosive ultimatum, the Chancellor demanded a landmark reshaping of the EU, with a new relationship for the United Kingdom. “I very much hope that Britain remains a member of the EU,” he told the German daily Die Welt.

“But in order that we can remain in the European Union, the EU must change.”

His comments emerged today just days after a senior US official warned Britain of the dangers of a referendum which could lead it to quitting the EU.

Mr Osborne’s interview, done on Tuesday, will also be seized on by Eurosceptic MPs as a slapdown to EU leaders arguing  that Britain will not be able to repatriate significant powers.

The Chancellor’s aides sought to downplay his words, with one saying: “This is consistent with our position – we want to remain in the EU, but the EU needs to change, and indeed is changing.”

But Mr Osborne’s stark warning is likely to escalate the row over Britain’s EU membership which is already causing concern across the Atlantic.

Downing Street insisted today that in a phone call in mid-December, US president Barack Obama had been “supportive” when David Cameron explained his policy of trying to renegotiate Britain’s EU relationship and then to seek “consent” for the agreed deal.

But this appeared to contradict a warning by US assistant secretary for European affairs Philip Gordon, who voiced concerns over Mr Cameron’s plans for a referendum on EU membership.  “Referendums have often turned countries inwards,” he said, stressing it was in  America’s interests to see a “strong British voice within the EU”.

The State Department confirmed Mr Gordon had been speaking for the Obama administration.

The Prime Minister’s official spokesman declined to say whether Mr Cameron had made clear to Mr Obama that “consent” could mean a referendum.

Mr Cameron is set to make a speech on January 22, spelling out his plans for a referendum. But an ally of German chancellor Angela Merkel, Gunther Krichbaum, the chairman of the Bundestag’s EU Affairs committee, warned of the risks of leaving the union.

“Losing the single market for the UK would be an economic disaster,” he said. Tory MEP Daniel Hannan hit back, tweeting: “My German friends, hectoring Britain about remaining the EU is having the opposite effect from the one you intend.”

Nick Clegg has warned that a referendum on Britain’s relationship with Brussels risked reducing the UK to “subsidiary status” in Europe.

However, there is huge pressure for a referendum from Conservative MPs worried that they are being outflanked by Ukip.

Growing exasperation' with Britain over EU

Saturday, 12 January, 2013 0:23

http://www.dw.de/growing-exasperation-with-britain-over-eu/a-16513971

Britain must retain a leading position within the European Union or face damaging economic consequences and risk losing valuable investment, the head of Honda in the UK has warned. 

http://www.telegraph.co.uk/finance/newsbysector/industry/9796813/Hondas-UK-boss-warns-Britain-must-stay-at-heart-of-EU-as-it-cuts-800-jobs.html

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Budget cuts must go on, says EU's Rehn

Saturday, 12 January, 2013 0:16

http://www.smh.com.au/business/world-business/budget-cuts-must-go-on-says-eus-rehn-20130112-2cm0w.html