By Alastair Macdonald
BRUSSELS (Reuters) - The EU urged Europeans on Thursday to cross borders to find work as the labor commissioner voiced "frustration" that British Prime Minister David Cameron's push to curb EU migration has held up plans to make this easier.
"Mobility in itself is an asset for Europe," Marianne Thyssen told reporters as she presented an annual report on the labor market, showing migration within the bloc could hasten slow declines in the EU's 9.1-percent unemployment rate.
"It's a good thing," she said, noting that only one EU citizen in 25 lived in another member state. "We shouldn't be creating barriers."
In the United States, without the language and other differences found in Europe, nearly one American in three lives in a different state from where they were born.
Thyssen, the Belgian member of the European Commission, said she had drawn up proposals to make it easier for people to move around the EU to find work, clarifying how contracts or social security rules should apply.
But politically explosive negotiations among member states to keep Britain in the EU meant the proposals had to be shelved last month.
"I find it regrettable ... frustrating," she said.
Cameron has promised Britain a referendum on EU membership by the end of next year. But first he wants to change EU rules so he can deny EU workers social benefits for their first four years, a bid to address voter concerns about strained social services.
Thyssen hoped the labor mobility plan could still be published in coming few months, but said it might have to be revised if Cameron and other leaders reach a deal at a summit in four weeks time.
Thyssen said Cameron's plans to deny EU workers benefits was "discrimination" on nationality grounds and illegal under EU treaties.
Cameron has said he is open to alternatives and British and EU officials have said that negotiations have raised hopes of a deal.
Thyssen did not elaborate on possible solutions, but echoed Commission colleagues by stressing that the freedom to live anywhere in the EU is conditional on having suitable employment.
She also said her labor mobility package aims to "codify" recent EU court rulings on benefits and migration, several of which have upheld states' action to deny benefits to foreigners.
Germany has also said it also wants to curb welfare payments. Its similarly buoyant economy has made it the other main destination for EU workers, along with Britain.
Cameron says an influx of EU workers, notably from poorer eastern states, has strained British public services.
Official data show about 1.9 million EU citizens work in Britain, taking 5 percent of jobs -- higher than an EU average of 3 percent. EU nationals also do 5 percent of jobs in Germany, where like Britain unemployment is half the EU average. They account for just 2 percent in France.
The EU employment report argued that "foreign-born people overall do not pose a burden on the welfare systems of the host countries". It acknowledged the risk of local pressures on services but suggested governments should adjust their budgets accordingly.
(Editing by Katharine Hureld)