British Finance minister George Osborne has warned that the EU faces terminal decline and risks losing Britain as a member unless the bloc introduces urgent reforms. 

Osborne, whose government has promised a referendum on membership in 2017, said the 28-member European Union was becoming less competitive than China and India.

The Chancellor of the Exchequer added that the bloc's treaties were "not fit for purpose" and had to be rewritten.

"We can't go on like this," he told a London conference on EU reform organised by two eurosceptic groups.

"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," the UK finance minister said.

"It is the status quo which condemns the people of Europe to an ongoing economic crisis and continuing decline. And so there is a simple choice for Europe: reform or decline. Our determination is clear: to deliver the reform, and then let the people decide," he added.

Prime Minister David Cameron has promised to renegotiate the terms of Britain's membership of the EU before putting them to the country in an in/out referendum by the end of 2017, provided that his Conservative Party wins the next general election in May 2015.

Osborne highlighted Europe's lack of competitiveness as a particular problem. "Over the last six years, the European economy has stalled," he said at the conference held by Open Europe and the Fresh Start Project.

"In the same period, the Indian economy has grown by a third. The Chinese economy by nearly 70%. Make no mistake, our continent is falling behind," he stated.

He said that reforms were needed to put the euro on a "firmer footing" after the crisis that engulfed the single currency, but that it was also vital for states like Britain that do not use the euro currency to be given legal protection.

Mr Osborne repeated Cameron's warnings that without reform Britain could be forced out of the EU. "The European treaties are not fit for purpose," he said.

"Euro zone integration is necessary if the euro is to survive. But proper legal protection for the rights of non-euro members is absolutely necessary to preserve the single market and make it possible for Britain to remain in the EU. 
"I believe it is in no-one's interests for Britain to come to face a choice between joining the euro or leaving the European Union..And a country of the size and global reach of Britain leaving would be very bad for the European Union," he told the conference.

The UK is at loggerheads with Brussels on a host of issues ranging from the economy to migration from newer EU members Romania and Bulgaria.

Ford would reassess UK unit if Britain left EU

Ford, the top-selling car manufacturer in Britain, said it would be forced to reconsider its UK operations if the country voted in favour of leaving the European Union.

Ford becomes the latest major foreign investor to sound the same warning to the UK government.

Steve Odell, chief executive of Ford's operations in Europe, said the second-largest US carmaker would have to re-evaluate its operations if Britain pulled out of the 28-member trading bloc in a proposed referendum.

"Clearly we wouldn't be alone in doing that. Would it mean tariffs? Would it mean duties? We'd take a look at what it meant," Odell told the Telegraph newspaper.

"I would strongly advise against leaving the EU for business purposes, and for employment purposes in the UK," he added.
Ford's warning follows a similar message last year from Japanese car giant Nissan which also has substantial operations in the UK employing thousands of people.
Ford closed its British van factory in Southampton in July and shuttered an associated stamping facility in Dagenham in London, ending vehicle manufacturing in Britain.
But the firm still employs nearly 15,000 people there, who mainly build and develop engines, and supports a further 100,000 jobs through its network of suppliers and dealers, the company said on its website.
British Prime Minister David Cameron promised voters he would renegotiate the terms of Britain's EU membership before holding an in-out referendum by 2017 if his ruling Conservatives were returned to power after elections due in May 2015.
Odell said he strongly discouraged Britain from leaving the EU but accepted if the public were asked today, most would support an exit as there was such a strong focus on the red tape that came with EU membership rather than the benefits.

Ford's comments come after UK car sales in 2013 recorded their best year since 2007, with car registrations rising 10.8% on 2012 to 2.26 million vehicles, while sales in the rest of the Europe have fallen in recent years.