George Osborne warns that EU is 'sleepwalking' out of global economy

The EU risks pricing itself out of the global economy with its excessive regulation, Chancellor of the Exchequer, George Osborne said on Wednesday (20 May), making the case for reforms in the bloc ahead of a referendum on whether Britain remains a member.

"We want to ensure Europe is a place where businesses invest and jobs are created. Yet the continent is sleepwalking towards a future where it has priced itself out of the global economy, with its rules and its regulations, financial services legislation and red tape," said Osborne.

He also urged the EU to work for all of its member states, not just those that are part of the currency union.

"We need to confront some hard truths about Europe. The problem with making the single currency work is inevitably drawing its members towards ever-closer integration. We don't want to be part of that integration, and the challenge for us is to ensure that while this happens we protect the single market and make sure the EU continues to work in the interest of all 28 member states, including Britain," he said.

Osborne was addressing business leaders in London in one of his first major speeches after an outright election win for his Conservative Party.

The unexpectedly decisive result paved the way for Prime Minister David Cameron to hold a referendum on EU membership by the end of 2017.

Cameron has pledged to renegotiate Britain's ties with Europe and then give voters an in-out choice, raising some concerns among business leaders who are worried about the risk of losing access to their main export markets.

Osborne made the remarks at a dinner hosted by the Confederation of British Industry.

Its president used the event to tell business bosses they should defend membership of the EU by telling voters it is the best guarantee of prosperity.

He highlighted a second area where Britain is seeking change, saying genuine concerns among Britons about migrants who come to the country to claim benefits must be addressed.

"And we must also address the genuine public concern about people who come to this country to claim our benefits, not bury our head in the sand, and think this doesn't matter. And the prime minister has set out the changes on welfare that we want to see," said Osborne.

He went on to warn against rushing to judgement on how the reform talks with other European countries are advancing, predicting intense media scrutiny of the process.