Britain’s Chancellor George Osborne Warns EU on UK Exit and €120bn US-EU Free Trade Deal Stall
Britain’s Chancellor George Osborne Warns EU on UK Exit and €120bn US-EU Free Trade Deal StallReuters

Chancellor George Osborne has warned the European Union that stalling the EU and US free trade deal would be a "betrayal" and that the UK would be forced to exit the 28-nation bloc if it did not reform.

Osborne said that the world's biggest free-trade deal should be open to the idea of a smaller number of EU states liberalising trade in certain areas, even without an overall EU agreement.

The EU-US agreement is expected to boost the bloc's economy by €120bn ($161bn, £100bn) and the US economy by €90bn, according to independent research.

Furthermore, the global economy would get a €100bn boost from the deal.

As of 2011, the US and the EU maintain a total of nearly $3.7tn in investment in each other's economies.

Meanwhile, Osborne said in his speech that he is "worried that eurozone countries could use their voting weight to rewrite the EU's rules and impose laws on Britain's financial services industry."

Osborne's speech largely warned the EU that Britain is likely to exit the bloc unless it overhauls its structure and the power it has over its members.

He said that if his and Prime Minister David Cameron's ruling Conservative party is re-elected in 2015, they will keep their promise to renegotiate the UK's EU ties before offering Britons an in/out membership referendum.

According to a number of recent polls, a slim majority said it would vote to leave the EU if it was given the chance.

While the ruling coalition party in Britain supports the country staying in the EU, it is yet to reveal what type of reforms it suggests.

Meanwhile, both pro and anti-EU groups agree that any referendum would be close.

"There's a very real risk that badly thought through EU laws will be imposed on the UK and will damage the City of London," said Osborne.

"This would be bad for the whole of Europe."

Osborne added that the EU has to stop resisting change and make a number of reforms, otherwise it is likely that Britain's electorate will vote to exit the 28 nation bloc.

"Our determination is clear: to deliver the reform and then let the people decide," said Osborne.

"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."

He added that "non-Euro states need their rights legally protected if countries like Britain are to remain in the EU."

"EU treaties are not fit for purpose and [Britain] doesn't want the UK to be forced to choose between joining the euro and leaving the EU."