London Mayor demands pared back EU links for Britain

LONDON Tue Dec 4, 2012 8:00am EST

1 of 4. London's Mayor Boris Johnson speaks during a Thomson Reuters Newsmaker event at Canary Wharf, east London December 4, 2012.

Credit: Reuters/Andrew Winning

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LONDON (Reuters) - London Mayor Boris Johnson heaped pressure on Prime Minister David Cameron on Tuesday by calling for a referendum on a deeply pared back British membership of the European Union.

Johnson, speaking at a Thomson Reuters Newsmaker event, said the euro was a calamitous project and that Britain should negotiate a new treaty to prevent its slide out of the world's biggest economic area.

"Boil it to down to the single market, that's the great achievement of the European Union, I think we could easily scrap the social chapter, the fisheries policy," Johnson, a Conservative party member seen as a potential rival to Cameron, said in a speech.

"That is a renegotiated Treaty we could and should put to the vote of the British people.

"It is high time that we had a referendum, and it would be a very simple question. Do you want to stay in the EU single market - yes or no?"

Johnson sidestepped three questions on whether he would like to be a future prime minister but he has set a high bar for Cameron. Negotiating such a new deal with Europe would be extremely difficult with EU allies unlikely to approve such a radical treaty change.

"There will be a huge barrage from foreign legations saying 'this is not on the table, there is no way we'll accept this'," said Johnson, a formidable campaigner whose messy mop of platinum blond hair makes him instantly recognizable.

"The choice is going to be very simple: it's between staying in on our terms or getting out," he told an audience of investors and bankers.

Dropping out of the European Union could isolate the world's sixth largest economy and bankers warn that such a dramatic move would sap the power of the City of London, Europe's dominant financial center.

But the turmoil of the euro zone crisis and the prospect of the currency bloc forming a closer political union that London will not join have convinced many within the ruling Conservative party and beyond that they must seek a new deal with Europe.

The issue, which has ripped previous Conservative administrations apart, has shot to the top of the political agenda with anti-EU party lawmakers pushing for a looser relationship with the 27-nation bloc -- or even leaving altogether.

BRIXIT?

Cameron, who is due to make a definitive speech on Britain's place in Europe in coming months, has called for repatriating powers before holding a referendum on the new settlement, though he has given no timeframe for when a vote could be held.

He also has to cater for governing coalition partners the Liberal Democrats who vehemently oppose looser ties with the EU.

Johnson said the best way to avoid a slide out of Europe was his proposal.

"It's a deliverable deal," Johnson, ubiquitously known as Boris across Britain, told Reuters after the speech.

"We're on the glide path to exit at the moment. That's what's happening. What I'm really advocating is a way of getting the best of both worlds, a way of keeping us in ... the valuable thing, a gigantic free trade area."

Johnson, who has repeatedly upstaged Cameron at events such as the Olympics, said Britain should look to have a similar relationship with the EU as those enjoyed by Norway and Switzerland.

"Indeed, if that were the relationship then there is every chance that we would be joined in that outer tier by Norway and Switzerland, since both those countries are feeling increasingly frustrated by their lack of influence."

Asked if he would campaign to keep Britain within the European Union if it renegotiated its treaty to be based around the single market, the mayor said: "Yes."

But when pressed on timing, he said the government would be very unlikely to hold such a referendum until after the next election, which is due in May 2015.

'CALAMITOUS PROJECT'

Johnson cast the euro as a sinking project reliant on German capital that was sowing social and political chaos across Europe as the crisis engulfs Greece, Spain, Portugal and even France.

He cast scorn on France's central bank governor, Christian Noyer, who said that the City of London should no longer be the euro zone's main financial center.

"I see no reason, with great respect to Mr Noyer, whose name I think means to drown, from memory, why trade in the euro shouldn't continue to be dominated by London," said Johnson, who said London accounted for 40 percent of euro trade.

He said the euro area would limp on with sclerotic growth before possibly blowing up at some point.

"The euro is a calamitous project, it will limp on with sclerotic growth rates," Johnson said. "It will eventually blow up but I wouldn't care to bet when."

Johnson's rhetoric on Europe and the highest approval ratings among Conservative politicians has fuelled speculation that he has his eye on Britain's top job.

A former correspondent for the right-leaning Daily Telegraph in Brussels, Johnson, 48, has dismissed as "complete cloud cuckoo land" speculation that he might seek election to parliament during his mayoral term, which finishes in 2016.

But does Boris want to be prime minister?

"As Clint Eastwood says in one of his, I think it was "Dirty Harry", a man's got to know his limitations. Being mayor of the greatest city on earth is a fantastic thing to do," he said.

(Additional reporting by Estelle Shirbon, writing by Guy Faulconbridge. Editing by Mike Peacock)

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