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Merkel has 'German reasons' to keep U.K. to stay in EU

German Chancellor Angela Merkel said she has "very good German reasons" for convincing the U.K. to stay in the European Union, saying the EU needs Britain's innovation and its broad global perspective.

The U.K. is an "innovative" country open to the rest of the world with an alternative outlook on the U.S. and the Asia- Pacific, Merkel said at the Lowy Institute for International Policy in Sydney. Such a view counterbalances a more insular perspective across the English Channel.

"We need the U.K.," Merkel said on the last day of a six- day trip to New Zealand and Australia that included the Group of 20 summit in Brisbane. "I'll do everything I can and I hope that we will be able to persuade them to remain members of the European Union."

The German leader said she was of the "assumption" that Britain won't quit the 28-member union, offering a positive take following a report this month that she was concerned the U.K. would leave the bloc amid Prime Minister David Cameron's push to curb free movement of people within the EU.

Merkel for the first time expressed concern about an exit because of Cameron's efforts to reduce the free flow of workers from the other member states into Britain, according to a Nov. 2 report in Der Spiegel magazine, which cited unnamed Chancellery and Foreign Ministry officials.

"You're never well advised when you only listen to your concerns or your worries," Merkel said on the panel in Sydney after delivering a speech. The chancellor met at the G-20 with leaders including Cameron, who is seeking to woo back voters from the anti-EU, anti-immigration U.K. Independence Party in the run-up to the May 2015 general election.

'Important Enough'

"The U.K. is helping us so that we don't lose sight of what's happening in the rest of the world," Merkel said. "We continental Europeans sometimes thing that if we only look at ourselves -- that's sufficient and we're important enough."

According to Der Spiegel, Merkel told Cameron at an EU summit in October that she would halt her attempts to keep the U.K. in if the premier continued efforts to introduce migration quotas.

Cameron, who pledged to renegotiate and hold a referendum on EU membership if re-elected next year, is drawing up proposals to curb immigration. The plans may have been aided by a top EU court decision last week allowing EU members to cut benefits to unemployed immigrants from other member states.

While expressing optimism Britons would opt to stay in the EU, Merkel cited the anxiety that preceded Scotland's vote in September to remain part of the U.K.

"You know the British seem to tend towards very close kinds of votes, as they had in the Scottish referendum," Merkel said. "We'll see how it goes."

To contact the reporters on this story: Patrick Donahue in Brisbane at pdonahue1bloomberg.net; David Fickling in Sydney at dficklingbloomberg.net To contact the editors responsible for this story: Alan Crawford at acrawford6bloomberg.net Andrew Davis, Stuart Biggs

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