Mark Rutte, the center-right, free-market Dutch head of state said he supported many of the goals that British Prime Minister David Cameron set out for renegotiating London's relationship with the 27-nation EU in a landmark speech on Wednesday.
"Britain has to be in the European Union, (it's) in Britain's interest and also in the European interest," Mr. Rutte told Reuters Insider television in an interview today at the World Economic Forum in Davos.
Asked what would happen if Britain left, the Dutch leader said: "I'm not very worried that it will happen. I think it would be a disaster if it did happen. But I don't think it will happen."
Opinion polls suggest a slim majority of Britons would vote to leave the EU, a move now called a "Brexit," if a referendum were held today.
Rutte, one of Cameron's main allies in seeking more free trade and market liberalisation, said he agreed with Britain on many issues and he knew that Cameron also wanted Britain to remain an active member of the EU.
Europe needed to reform, he said, not to do special favours to one country, but to act in its own interest. It needed to restore economic competitiveness, reduce the costs of running the Union and focus on subsidiarity, the principle of taking decisions at the lowest level of government possible.
"I'm in agreement on all these issues. There might be a difference if at the end of the day David Cameron were to opt for particular opt-outs that he would ask for the UK," Rutte said.
"I don't believe you should have unique individual arrangements between individual countries and the EU, but we have to have this debate on subsidiarity."
Other European leaders have reacted more negatively to Cameron's pledge to negotiate a "new settlement with Europe" and then hold an in-out referendum on British membership of the bloc by the end of 2017, if his party is re-elected to government.
French and German leaders said Britain could not cherry-pick European policies or choose a-la-carte which areas of cooperation it wished to remain in.
Britain has already opted out of the euro single currency and the Schengen zone of passport-free travel and has indicated it will opt out of a swathe of justice and police cooperation legislation next year, including the common European arrest warrant, which replaced cumbersome extradition procedures for serious crimes and terrorism cases.
Rutte said the EU should focus on areas where it added value like completing its internal market, concluding new free trade agreements with the United States and Japan, opening up its energy market and allowing complete freedom to provide services across borders in the bloc.
Cameron and Rutte met briefly in the corridors of Davos and the British leader also met German Chancellor Angela Merkel, who has taken a more cautious line towards his speech than other German politicians who were more negative.
(Reporting by Axel Threlfall; Writing by Paul Taylor; Editing by Jon Hemming)