BERLIN (Reuters) - European Commission Vice President Valdis Dombrovskis said in a newspaper interview published on Thursday that if Britain decided to leave the European internal market, it would hit the City of London hard.

"If (the British government) decides to leave the European internal market as well as the European Union, it would have serious effects for the City of London," he told German newspaper Handelsblatt.

"At the moment British banks only need a license for one EU state to be able to be active in all member countries. The banks would lose this EU passport if Britain no longer wants to completely respect the rights and duties of the European internal market after it has left the EU," Dombrovskis said.

(Reporting by Michelle Martin and Madeline Chambers)