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Osborne Threatens British Exit From EU Without Change

U.K. Chancellor of the Exchequer George Osborne said the European Union will need to change if Britain is to remain a member.

The ultimatum marks a hardening of the language of the British government as Prime Minister David Cameron prepares to make a key speech on the U.K.’s relationship with Europe later this month.

“I very much hope that Britain remains a member of the EU but in order that we can remain in the European Union the EU must change,” Osborne said in an interview with the German Die Welt newspaper published today. The quote was confirmed by the British Treasury in London in an e-mailed statement.

Cameron is under pressure from some members of his party to call a referendum on pulling out of the EU. The argument intensified this week after Philip Gordon, assistant secretary of state for European Affairs in President Barack Obama’s administration, warned Britain against a referendum, saying the U.K. staying in the EU is important to U.S. interests.

Cameron’s spokesman, Jean-Christophe Gray, said the premier’s position has not changed and that he wanted “fresh consent” on Britain’s relationship with the 27-nation bloc, without saying how that would be reached.

“The prime minister’s position is that we want to change our relationship with the European Union and seek fresh consent on that,” Gray told reporters in London. “There’s an opportunity to do so.”

‘Very Disappointed’

Osborne declined to say in the interview with Die Welt if the British government is planning a referendum, saying Cameron will state the government’s position in his speech. The Sun newspaper reported today that the speech will be made in The Hague on Jan. 22, when Cameron will say the Dutch government supports his bid for EU powers to be returned to member states.

David Cameron has said recently that a new consensus is necessary for our relations with Europe,” Die Welt reported Osborne as saying after he was asked about the possibility of a vote. The British people are “very disappointed” with the EU and whether it can solve urgent problems and create jobs, he is quoted as saying.

The comments may further strain relations with European leaders who have been angered by Cameron’s threat to veto treaty changes unless the U.K. wins concessions.

‘Blackmailing’

“You cannot create a political future if you are blackmailing other states. That will not help Britain,” Gunther Krichbaum, an ally of Chancellor Angela Merkel and the head of Germany’s European Affairs committee, told the Guardian newspaper. “It needs a Europe that is stable. It needs markets that are functioning.” A referendum “could paralyse efforts for a better Europe and deeper integration. Britain would risk being isolated,” he said.

Business Secretary Vince Cable, whose pro-EU Liberal Democrat party governs in coalition with Cameron’s Conservatives, said today the debate over Britain’s future in the EU is proving “a massive disruption and deeply unhelpful” at a time when the government is trying to boost the economy.

“I have to spend my time talking to business people, British and international, trying to have the confidence to invest here and create employment, and the recent uncertainly is just deeply uncomfortable for the country,” he said in a speech in London. “I think the warning shot across the bows from the United States was actually quite helpful as well as very timely.”

UKIP Gains

The U.K. Independence Party, which seeks Britain’s exit from the EU, is attracting the support of about 10 percent of respondents in opinion polls, leading some Conservative Party to press for a harder line on the EU. They also reacted with anger to interventions in the debate from other countries.

“This is about democracy and it’s about our relationship with the EU and we will have our say, we will have our debate, and we will do it on our own terms,” Conservative lawmaker Bill Cash told BBC Radio 4’s World at One show. “In relation to the EU, there is no question that the status quo is unacceptable.”

Cameron and Obama discussed the U.K.’s place in the EU in a telephone call last month and the president was “supportive” of the prime minister’s approach, Gray said.

To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net; Gonzalo Vina in London at gvina@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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