EU falling behind India, China: British finance minister

British Finance Minister George Osborne on Wednesday warned the European Union that it was falling behind India and China and must reform to halt the bloc's decline.

"We can't go on like this. . .(there is a) simple choice for Europe: reform or decline," Osborne stressed while addressing a conference organised by two Eurosceptic groups in London.

The conference by the think tank Open Europe and the Fresh Start group of MPs came in the wake of growing demand for the British Parliament to block EU laws.

The Chancellor of the Exchequer acknowledged the need for change as over the last six years, the European economy has ‘stalled’ and in the same time, India has grown by a third and China by half and over the next 15 years Europe's share of the global economy will halve, he warned.

"The biggest economic risk facing Europe doesn't come from those who want reform and renegotiation.

“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," he said.

The senior Conservative leader also repeated his party's 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 talked about how the 2008 financial crisis exacerbated the EU's problems.

The European Union is an economic and political union of 28 member states.

"We knew there was a competitiveness problem in Europe before the crisis.

“But the crisis has dramatically accelerated the shifts in the tectonic economic plates that see power moving eastwards and southwards on our planet," he said.

In a sign he believes spending on social security is too high not just in the UK but across Europe, he said: "Europe accounts for just over 7 per cent of the world's population, 25 per cent of its economy, and 50 per cent of global social welfare spending."

The speech marks a serious toughening of UK government stance on Europe and follows over 90 conservative members of Parliament sending a letter calling on Prime Minister David Cameron to demand the power for Westminster to veto any EU laws deemed unacceptable to Britain.

Image: Finance Minister George Osborne