The proposals will be discussed at a key summit in Brussels next week
Angela Merkel has given her support to David Cameron's EU reforms, saying they will "benefit Europe as a whole".
In a speech attended by the British Prime Minister in Hamburg, the German Chancellor gave her strongest endorsement yet to the UK government's proposals.
Mrs Merkel said: "These concerns that David Cameron has raised with the European Union are not only understandable - but we even support them."
She told dignitaries: "We are at one in saying that in the European Union much more needs to be done for competitiveness, more transparency and cutting red tape."
And in clear reference to Mr Cameron's demands to restrict benefits to EU migrants she said that "social systems ought to be protected against abuse".
Mrs Merkel concluded: "The concerns that David Cameron raises are not purely British concerns ...
"If we were to take a common European approach it would be a great benefit to Europe as a whole."
Afterwards Mr Cameron addressed the St Matthew's dinner and echoed Mrs Merkel's sentiments.
He said: "When it comes to the question of Britain's place in Europe, I have always been confident that together we can secure the reforms that address Britain’s concerns and also work for Europe as a whole.
He added: "So when it comes to the question of Britain’s future in Europe, my aim is clear: I want to keep Britain inside a reformed European Union."
But he kept hold of his warning that a failure to reform may still sway how he would campaign in the referendum.
He said: "If by working together we can achieve these changes, then I will unequivocally recommend that Britain stays in a reformed European Union on these new terms.
"Of course, if we can’t then I rule nothing out."
Some business leaders in the room also supported David Cameron's proposals.
However, speaking ahead of Mr Cameron's speech, Robert Oxley from the Vote Leave campaign said: "David Cameron had already watered his renegotiations down to a trivial set of demands but when you look at those demands they're not even looking for anything new.
"Ultimately there will not be powers coming back, there will not be money coming back, the renegotiations have failed."