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George Osborne 'reform or decline' warning to EU George Osborne issues 'reform or decline' warning to EU
(35 minutes later)
The European Union is falling behind India and China and must reform if it wants to halt the decline, George Osborne is to warn.The European Union is falling behind India and China and must reform if it wants to halt the decline, George Osborne is to warn.
In a speech the chancellor will point to the continent's spending on welfare and its "competitiveness problem".In a speech the chancellor will point to the continent's spending on welfare and its "competitiveness problem".
"We can't go on like this," he is due to say at a conference organised by two Eurosceptic groups."We can't go on like this," he is due to say at a conference organised by two Eurosceptic groups.
It follows the Conservative leadership rejecting a call from 95 of its MPs to allow Parliament to block EU laws.It follows the Conservative leadership rejecting a call from 95 of its MPs to allow Parliament to block EU laws.
Earlier this week Foreign Secretary William Hague said the European Union's rules had to be followed by all its members and the backbenchers' plan was unworkable.Earlier this week Foreign Secretary William Hague said the European Union's rules had to be followed by all its members and the backbenchers' plan was unworkable.
'Simple choice''Simple choice'
But addressing the think tank Open Europe and the Fresh Start group of MPs, set up by Conservatives keen to see reform, Mr Osborne will say he understands the need for change.But addressing the think tank Open Europe and the Fresh Start group of MPs, set up by Conservatives keen to see reform, Mr Osborne will say he understands the need for change.
"The biggest economic risk facing Europe doesn't come from those who want reform and renegotiation," he will say."The biggest economic risk facing Europe doesn't come from those who want reform and renegotiation," he will say.
"It comes from a failure to reform and renegotiate. It is the status quo which condemns the people of Europe to an ongoing economic crisis and continuing decline.""It comes from a failure to reform and renegotiate. It is the status quo which condemns the people of Europe to an ongoing economic crisis and continuing decline."
Mr Osborne will argue there is a "simple choice for Europe: reform or decline".Mr Osborne will argue there is a "simple choice for Europe: reform or decline".
'Power shifting''Power shifting'
The chancellor is also expected to repeat the Conservatives' pledge to hold an in-out referendum on the UK's membership of the EU in 2017 should they win the next election.The chancellor is also expected to repeat the Conservatives' pledge to hold an in-out referendum on the UK's membership of the EU in 2017 should they win the next election.
And he will talk about how the 2008 financial crisis exacerbated the EU's problems.And he will talk about how the 2008 financial crisis exacerbated the EU's problems.
"We knew there was a competitiveness problem in Europe before the crisis," he will say."We knew there was a competitiveness problem in Europe before the crisis," he will say.
"But the crisis has dramatically accelerated the shifts in the tectonic economic plates that see power moving eastwards and southwards on our planet.""But the crisis has dramatically accelerated the shifts in the tectonic economic plates that see power moving eastwards and southwards on our planet."
In a sign he believes spending on social security is too high not just in the UK but across Europe, he will claim: "Europe accounts for just over 7% of the world's population, 25% of its economy, and 50% of global social welfare spending."In a sign he believes spending on social security is too high not just in the UK but across Europe, he will claim: "Europe accounts for just over 7% of the world's population, 25% of its economy, and 50% of global social welfare spending."
Echoing the Conservatives' 2010 election campaign slogan he will say: "We can't go on like this."Echoing the Conservatives' 2010 election campaign slogan he will say: "We can't go on like this."
Senior Conservative MP John Redwood, one of the signatories to the letter to the prime minister, told BBC Radio 4's Today programme it was important to stop the EU "simply grabbing power".
He said the MPs were simply stating the case made in a "serious" and "seminal" report by the European Scrutiny Committee.
He urged the UK government, in a similar way to Germany, to set up a safeguard against excessive intervention by Brussels, by promoting "the sovereignty of Parliament".
The current state of the EU meant it was "difficult for there to be sufficient reform" and any powers of veto over EU laws would be used only "in extreme cases", Mr Redwood added .