GO
Loading...

Stay at Heart of Europe, US Tells Britain

Jim Pickard, George Parker and Richard McGregor
Thursday, 10 Jan 2013 | 2:35 AM ET
Lawrence Lawry | Photodisc | Getty Images

The Obama administration on Wednesday publicly signaled its growing concern about a possible British exit from the EU, just days before David Cameron sets out plans for a referendum on the issue.

US diplomats have privately warned for months that Mr Cameron risked putting Britain on a path to exit with his plan to renegotiate Britain's EU membership terms and put the "new settlement" to a referendum.

But Washington has now taken the unusual step of publicly briefing British journalists that it firmly believes the "special relationship" is best served by the UK remaining at the heart of Europe.

(Read More: No Happy New Year for UK as Gloom Worsens)

Philip Gordon, assistant secretary for European affairs, made it clear that there would be consequences for Britain if it either left the EU or played a lesser role in Brussels. "We have a growing relationship with the EU as an institution, which has an increasing voice in the world, and we want to see a strong British voice in that EU," he said. "That is in America's interests. We welcome an outward-looking EU with Britain in it."

More From FT.com

Jacob Kirkegaard, of the Peterson Institute for International Economics in Washington, said: "This is essentially [the US] saying to the UK – 'you guys are on your own'. There is an element of pre-emption here and must be clearly intended to create waves."

Mr Gordon, speaking at the US embassy in London, said that he did not want to interfere in British affairs but discussed the often "inward-looking" history of EU negotiations, noting that "referendums have often turned countries inwards".

"The more the EU reflects on its internal debate the less it is able to be unified," he said, adding that the continent was more effective when it worked together, for example, over the recent oil embargo on Iran.

Mr Cameron wants Britain to stay in the EU but is expected later this month to set out a "renegotiate and referendum" strategy, which he would deploy if he wins Britain's 2015 election.

The prime minister wants a looser relationship with an increasingly integrated inner EU core – based around the euro zone – and hopes to repatriate powers to Britain, such as rules limiting working hours.

(Read More: UK May Be OK to Lose AAA After All)

The British negotiations would take place as part of what could be protracted talks on a proposed EU treaty to deepen euro zone economic union, making a UK referendum on the outcome unlikely before 2017 or 2018.

Herman Van Rompuy, the European Council president, said on Wednesday it could be at least two years before any new treaty came on to the table: "The possibility of having treaty change in the near future [is] present, but not very high."

The opposition Labor party claims Britain risks "sleepwalking to [an EU] exit". But a spokesman for Mr Cameron said: "The US wants an outward-looking EU with Britain in it and so do we."

Business leaders, including Virgin founder Sir Richard Branson, warned this week in the FT that Mr Cameron would fail if he sought a "wholesale renegotiation" of Britain's membership, heightening the risk of a No vote.