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By Guy Faulconbridge
LONDON, Nov 5 (Reuters) - British politicians should stopshouting at their European Union partners from the sidelines andstart building alliances to ensure proper reform of the world'srichest region, a lobby group for powerful banks and moneymanagers said on Wednesday.
Prime Minister David Cameron has promised to renegotiate theterms of Britain's European Union membership and hold an"in-out" referendum if re-elected in 2015.
Rows over Britain's EU bill and Cameron's plans to capimmigration from the rest of the countries in the bloc havedeepened concerns that the world's sixth-largest economy couldquit the club it joined in 1973. EU leaders have said freemovement of labour is a non-negotiable principle.
"It is not good enough to shout from the sidelines and treatEurope as something that does unwelcome things to us," saidStephen Green, a former chairman of HSBC and nowchairman of the CityUK's advisory board.
"It is not good enough to treat Brussels regulation asautomatically undesirable, or to put forward demands just on thebasis of British exceptionalism," said Green in remarks preparedfor delivery at a speech in London.
The comments indicate increased nervousness in the City ofLondon about the impact of a slide towards an EU exit on the thepart of bankers, traders, money managers and insurers who havemade London the only financial capital to rival New York.
Green, 65, said that the EU needed radical reform but thatthe single market - including the free movement of labour - wasbeneficial to both Britain's economy and that of London.
"This question of Britain's membership of the EU is surelythe most strategically critical one facing us (and indeed therest of Europe) over the next three years or so," Green said."Britain belongs in a reformed Europe."
London dominates the $5-trillion-a-day foreign exchangemarket, trading twice as many dollars as the United States andmore than twice as many euros as the entire euro zone.
A growing number of banks, including Goldman Sachs, Citi andJPMorgan, have warned a "Brexit" could hurt London's position.
Opponents of the EU say Britain would do better to tradewith the world from outside the bloc. Polls show voters aresplit. (Reporting by Guy Faulconbridge; editing by Ralph Boulton)
