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Cameron shakes Europe over EU exit vote

David Cameron promises to give Britons the chance to vote on whether to stay in the European Union or leave if he wins the next election in 2015.

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LONDON: The British Prime Minister, David Cameron, and his Liberal Democrat deputy, Nick Clegg, clashed on Thursday on whether the possibility of Britain leaving the European Union within five years risked putting off investors and damaging the economy.

Mr Clegg, who leads the pro-EU Liberal Democrats, distanced himself from his Conservative coalition partner's plans to repatriate powers from the EU.

I think that discourages investment and inhibits growth and jobs, which has to remain our absolute priority.  

Mr Cameron promised voters on Wednesday a referendum by 2017 on whether to remain in the EU on new terms or leave the bloc, saying he will make the case for staying in.

David Cameron

''This is a sensible approach'' … David Cameron. Photo: Bloomberg

''Where, of course, David Cameron and I part company is I simply don't understand the point of spending years and years and years tying yourself up in knots first, so-called renegotiating the terms of Britain's membership in ways that at the moment at least are completely vague,'' Mr Clegg told London's LBC radio station on Thursday during his weekly phone-in show. ''And I think that discourages investment and inhibits growth and jobs, which has to remain our absolute priority.''

Mr Cameron defended his position in a question-and-answer session after his speech on Thursday to the World Economic Forum in Davos, Switzerland.

''We're going to resolve this issue in a way that is actually going to benefit business because we'll end up with a more competitive, more open European Union,'' Mr Cameron said. ''They say this is a sensible approach.

Nick Clegg

Nick Clegg has distanced himself from David Cameron. Photo: Bloomberg

''I would argue the riskiest thing of all would be to do nothing, would be to sit back, see all the changes taking place in Europe with the eurozone, and just say, 'This is nothing to do with us','' he said. ''And see all the debate in Britain and say, 'I'm going to stay back from it'.''

A letter to The Times newspaper signed by 55 leaders of industry and London's financial district welcomed the referendum proposals as ''good for business and good for jobs in Britain''.

The opposition Labour Party said Mr Cameron's position on the EU would make Britain less attractive to foreign investors.

Mark Rutte

Mark Rutte said Britain would be isolated if it doesn't join the EU. Photo: Bloomberg

''We have traditionally said, 'Come to Britain because it is a favourable climate and you will have access to this huge market','' a former Europe minister, Peter Hain, told BBC Radio 5.

''Now we are on a road which could lead us out of Europe and out of that market, and that is a decision which is going to affect investment.''

Foreign leaders shared their concerns about Britain renegotiating the terms of its EU membership.

Enda Kenny, Ireland's prime minister.

Enda Kenny believes the EU would be ''stronger if Britain is part of it''. Photo: Bloomberg

At the Davos forum, the Dutch Prime Minister, Mark Rutte, warned that without the EU, Britain would be ''an island somewhere in the middle of the Atlantic Ocean, somewhere between the United States and Europe''.

The Irish Prime Minister, Enda Kenny, said the EU would be ''stronger if Britain is part of it''.

The German Chancellor, Angela Merkel, sidestepped the topic but reached out to Mr Cameron by vowing more action on one of the key reforms he wants for Europe: boosting competitiveness.

''I say this expressly to my colleague David Cameron. You too have addressed competitiveness, [and] see this as a central issue to ensure Europe's prosperity for the future,'' Dr Merkel said.

Bloomberg, Agence France-Presse