Cameron says he can reshape ties with EU to avoid British exit

British prime minister David Cameron has insisted that his demands for reform of EU rules and tighter immigration controls are as legitimate as reform efforts to crisis-proof the euro zone.

He told an audience in Davos he welcomed free movement in Europe and further EU enlargement, but said transitionary periods were essential to prevent further mass migration waves between countries of disparate economic strength.

“The right to move in Europe and apply for jobs in other European countries is an important freedom to which which I subscribe,” he said. “But it should ... not be a right to go and claim benefit.”

To combat welfare migration in future the British leader vowed to integrate national immigration policy more closely with welfare and education to “make the most of our own resources rather than encourage migration”.

Britain’s role as a constructive critic in the EU member had already kick-started a more critical union approach to its own regulatory thicket, he said. So too would Britain’s critical debate on its EU membership would improve both the union and Britain’s relationship with it.

“There isn’t a currency in the world that can succeed without banking union ... or fiscal union,” he said. “And when that change happens then those outside the currency union will say, ‘we need change too’.”

Mr Davos told Davos delegates that Europe’s new-found appetite for reform was improving its chances in a globalised world, visible in the return of manufacturing jobs to the continent.

Europe was benefitting from rising costs in emerging markets, he said, but also company shifts closer to consumers to shorten supply chains and react quicker to consumer demand.

Just as important, he added, was a European push to drive productivity and a critical approach to excessive regulation.

“For years the west was written off as facing inevitable decline but I don’t believe iet has to be that way,” he said. “Economies in Europe have a unique opportunity to accelerate jobs coming back home. As we do so we should never forget our important strengths and never undersell our core values, such as liberal democracy, which we hold dear.”

Quizzed by Britain’s Trade Union Congress (TUC) about their campaign for living pay and pay rises, Mr Cameron said he thought companies that could pay a living wage should do so.

“I want to see people paid more but we have to make sure we are succeeding in productivity and output to ensure that pay is earned,” he said. “If you decree it across the country without considering whether it can be afforded you can lose jobs rather than gain jobs.”

Mr Cameron said he was confident he could renegotiate his country's relations with the European Union to allow it to remain in the 28-nation bloc.

“I’m confident that we’ll have a successful renegotiation and a successful referendum,” he told delegates, referring to his plan to reshape his country’s EU ties before offering Britons an in/out referendum if he is re-elected next year.

“I’m confident this is do-able, deliverable and, as I say, winnable for Britain to stay in a reformed European Union,” he said.