Germany warns of British exit from EU over immigration limits

German Chancellor Angela Merkel has warned British Prime Minister David Cameron that putting limits on immigration from other European Union nations would be a "point of no return" that could sharply increase the risk of Britain leaving the European Union.

The German newspaper Der Spiegel, citing unnamed sources in Merkel's office and the German foreign ministry, reported on Sunday that Merkel was becoming worried, for the first time, that a British exit from the EU — often dubbed "Brexit" in the media — was a real possibility.

Under growing pressure from the anti-EU UK Independence Party (UKIP) ahead of a May 2015 national election, Cameron's Conservatives have said they would try to cap immigration from certain EU member states if they are re-elected.

The EU, a bloc of 28 countries, was formed in the aftermath of World War II with the aim of preventing future conflict by increasing economic and political integration between member states. EU citizens are allowed to stay in another member country for up to three months without registration, and to live there indefinitely if they are financially independent. The same right applies to their family members, according to Migration Policy Institute Europe (MPI), a Brussels-based research group.

Large numbers of people from Eastern Europe, especially Poland, have moved to the United Kingdom since the eastern countries joined the EU from 2004. The economic crisis in 2008 and subsequent youth unemployment rates of 30 percent have also compelled people from Spain, Greece and Portugal to look for jobs elsewhere in the EU, most notably London. The city now harbors the biggest Polish and French communities outside of their respective countries.

Both Merkel and the European Commission in Brussels have said capping immigration would violate the fundamental EU principle that allows citizens of the bloc to live and work in any member state.

Spiegel cited sources in Berlin as saying that if Cameron insists on limiting the number of immigrants from other EU states, "there will be no going back."

"Should Cameron persist [in this plan], Chancellor Angela Merkel would abandon her efforts to keep Britain in the EU. With that a point of no return would be reached," the report quoted the sources as saying, adding: "That would be it then."

There was no suggestion that Germany — the EU's biggest economy and most powerful member — would itself push Britain toward the exit. Merkel has said she strongly backs continued British membership of the 28-nation bloc, but not at any price.

Merkel tried to persuade the British premier at the last EU summit to not put limits on the number of EU citizens allowed to work in Britain, Spiegel said, but subsequent comments by British officials suggested her warning had fallen on deaf ears.

Cameron has said he would hold an in-or-out referendum on EU membership in 2017 if he wins the May election. He has said he wants Britain to remain inside a reformed EU, but it is far from clear that other members will accept the reforms he wants.

Britain's Sunday Times newspaper reported last month that Merkel was open to talks with Cameron on possible restrictions for migrant EU workers claiming welfare benefits inappropriately in other countries in the bloc — a key concern for many British voters. As more people take up residency elsewhere, some continue to collect social security benefits in their home countries, effectively gaming the system.

"On the other hand, we must not interfere with the fundamental principles of free movement in Europe," the report quoted Merkel as saying.

In addition, Elizabeth Collett, MPI Europe’s director, said the bloc’s “principle of equal treatment” requires that residents of member states are treated the same, regardless of national origin. She suggested that combating the fraudulent use of benefits — as well as encouraging integration of newcomers by offering tools such as language courses — were better ways to manage the influx of migrants to the bloc’s more prosperous cities.

Supporters of EU enlargement in Britain and elsewhere say immigrants have given a big boost to the economy. Critics say they have put great strain on local services such as health, housing and education.

Al Jazeera and wire services. Lisa De Bode contributed to this report.