BERLIN (AP) — Britain's finance minister argued Tuesday for reforms to the European Union that would help keep his country in the bloc and that he insisted would benefit all members, including more open markets and less regulation.
Chancellor of the Exchequer George Osborne told German business leaders and politicians in Berlin that the two countries, Europe's two largest economies, would "meet in an alliance to overcome the forces of protection and make Europe the center of a global network of free trade agreements."
Under pressure from rising Euroskeptic sentiment in the U.K., Britain's Conservative government has promised to hold a referendum on EU membership by the end of 2017.
Prime Minister David Cameron favors staying in, as long as Britain can negotiate a looser relationship with the 28-nation bloc, cutting back the political powers the EU has over member states on issues including welfare and immigration that have become ever-more politically sensitive as hundreds of thousands of migrants arrive on Europe's shores.
Osborne said that "if freedom of movement is to be sustainable, our publics then need to see it as freedom to move to work, rather than freedom to choose the most generous benefits."
Cameron has yet to lay out concrete proposals for negotiations. But Osborne — a fiscal conservative who is the favorite to lead the Conservative Party when Cameron steps down before the 2020 election — firmed up Britain's economic demands.
He said Britain wants legal changes so that non-eurozone countries are not at "a systematic disadvantage" in the single market, and a guarantee that taxpayers in Britain and other non-euro-using nations don't "bear the cost for supporting countries in the eurozone."
"We want Britain to remain in a reformed European Union, but it needs to be a European Union that works better for all the citizens of Europe," he said.
Speaking before Osborne, Chancellor Angela Merkel said that it was Germany's wish for Britain to stay in the EU, and signaled flexibility in negotiating changes.
"All we can promise is to say that where there are justified wishes, where this is about competitiveness, about the better functioning of the European Union, British wishes are also our wishes," Merkel said.
She added that it "is important for many reasons to have Great Britain as a member state of the European Union, and so we will make the contribution that we can make — the British will have to decide the rest."
"And I hope they will do so in a way that makes us in Europe stronger," Merkel said.
Osborne insisted both the European Union countries that use the euro currency and those that don't would benefit from changes.
He said, for example, that some non-euro countries might want to participate in a possible banking union, but that the option should be voluntarily.
With changes, he said, "you get a eurozone that works better, we get a guarantee that eurozone decisions and costs are not imposed on us, you get a stronger euro and we make sure the voice of the pound is heard."
Jill Lawless in London and Geir Moulson in Berlin contributed to this story.