UK's Osborne warns that EU is sleepwalking out of global economy

May 20, 2015 6:32 PM

LONDON, May 20 (Reuters) - The European Union risks pricing itself out of the global economy by excessive regulation, British finance minister George Osborne said on Wednesday, making the case for reforms in the bloc ahead of a referendum on whether Britain remains a member.

"The continent is sleepwalking towards a future where it has priced itself out of the global economy, with its rules and regulations, financial services legislation and red tape," Osborne 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 the EU referendum 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.

Osborne was made Cameron's most senior minister shortly after the election and he is expected to play a big role in the reform negotiations with other European countries.

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.

Osborne 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.

"I'd advise everyone to take all this coverage with a large pinch of salt. The real negotiations will be carried out at the highest level and in private," he added. (Reporting by William James; editing by William Schomberg)