Britain, France see euro reform as possible 'win-win'

By Mark John

PARIS (Reuters) - Britain and France agreed on Monday that efforts by euro zone nations to shore up the single currency after the Greek crisis could go hand-in-hand with wider reforms the UK needs to stay in the European Union.

Prime Minister David Cameron wants assurances that non-euro zone EU members such as Britain will not see their influence wane in the wider 28-country bloc as the euro zone integrates more, before he puts British membership of the EU to a landmark referendum by 2017.

With the prospect of near-bankrupt Greece's exit from the zone narrowly averted for now, France and Germany have floated ideas to strengthen the 19-member currency union, for example with its own budget, "government" and parliament.

French Economy Minister Emmanuel Macron, hosting Chancellor George Osborne, said a "fair set of rules" were needed to protect the interests of those outside the euro.

"We need a fair treatment of the 'out' countries," Macron told a joint news conference with Osborne after the two visited a so-called "incubator" of French high-tech start-ups in Paris' trendy Marais district.

"It is the right moment to reform a lot of things," he said, adding that he believed that agreement between Britain and its EU partners in this area was possible.

Osborne said some of the proposals for euro zone reform took it in an "interesting direction" but added: "If we are going to see the euro zone integrating further, then we have also got to make sure that the interests of those who are not in the euro zone such as the UK are properly protected."

Neither minister would be drawn on details of negotiations due to take place on the sought-after reforms or the timetable of a possible referendum.

Britain's Independent on Sunday reported at the weekend that Cameron wants to press ahead with the vote within the next 12 months, with a polling day pencilled in for June 2016.

The prime minister deflected the question on a visit to Indonesia on Monday, telling accompanying British reporters: "I’ll just get on doing the negotiation and then set the date."

Osborne said the timing would be determined by the substance of a possible accord with capitals such as Berlin and Paris, which have signalled they would prefer the question resolved before they hold national elections in 2017.

"If we have a deal that we can recommend to the British people before then, then of course we can have the referendum before then," said Osborne, reaffirming the government's line.

Britain is seeking a batch of reforms ranging from a streamlining of EU red-tape to measures to safeguard Britain's position as a global financial centre and more contentious ones including cutting welfare and in-work benefits to non-British EU citizens.

With French and other officials having said that they would find it hard to accept anything that involved outright change of the EU's treaties, Cameron last month suggested that agreement to change treaties at a later date could be sufficient.

Macron would not be drawn on whether that too would be a "red line" for Paris, saying only: "The process will depend on the results of the discussions."

France is traditionally particularly sensitive to any attempt to roll back EU labour, public health and food safety legislation. It is not yet clear whether Britain will demand changes or exemptions in these areas.

Osborne was due to hold talks with Finance Minister Michel Sapin, Foreign Minister Laurent Fabius and Prime Minister Manuel Valls while in Paris. Trips to other EU capitals to make the British case are planned in coming weeks.

(Editing by Paul Taylor)