UPDATE 2-London Mayor demands pared back EU links for Britain

Kate Holton and Guy Faulconbridge
Reuters Middle East

* Johnson says Britain should have an EU referendum

* Says Britain slipping towards EU exit

* Adds to pressure on Prime Minister Cameron over Europe

* Euro will limp on then blow up, mayor says

* But says Britain should stay in EU single market

LONDON, Dec 4 (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 recognisable.

"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 centre.

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



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


"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.


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 centre.

"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.

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