George Osborne lectures the EU on reform The Prime Minister has promised to renegotiate the country's membership agreement, then put the new deal to the electorate in a referendum by 2017. So far, he has given few details of his aims and Conservative MPs are growing impatient over Europe amid a growing challenge from the UK Independence Party. Many Conservative MPs are backing demands for a new parliamentary veto on rules written in Brussels and additional curbs on EU migrants" employment rights, demands that ministers say are unrealistic. Mr Cameron on Tuesday night slapped down the 95 Tory MPs who signed a letter calling for a veto. He said Tories could lose marginal seats in the next election if MPs continue to go "off message." He and Mr Osborne have said they want Britain to remain part of a reformed EU, but the Chancellor will today make it clear that only significant changes will be enough to persuade British voters. The EU must do much more to support business and create jobs, and spend less on welfare, Mr Osborne will tell an audience of Conservative MPs and European politicians. Europe's recent economic and financial crisis has only hastened a long-term decline that means it is falling behind emerging economic powers, the Chancellor will argue. 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 will say. Over the last six years, the European economy has "stalled," Mr Osborne will say. In the same time, India has grown by a third and China by half. Over the next 15 years Europe's share of the global economy will halve, the Chancellor will predict. He will produce statistics that he will say prove the continent is underperforming its rivals: Welfare spending is too high: Europe accounts for just over 7 per cent of the world's population, 25 per cent of its economy, and 50 per cent of social welfare spending; Job creation is too low: across the EU, a quarter of young people looking for work cannot find a job; Companies are not free to innovate: Europe's share of world patent applications nearly halved in the past decade. Echoing a Conservative slogan from the 2010 general election campaign, Mr Osborne will argue that those problems demand radical change, making his "we can't go on like this," remark. Some critics of the Conservative approach to Europe say that it is risking the UK's economic stability by raising doubt over EU membership. Nick Clegg, the Deputy Prime Minister, has referred to the strategy of his Coalition partners as "economic suicide." Business leaders are divided on the issue. Some have backed Mr Cameron's renegotiation, but others worry that it will create uncertainty about Britain's future. Fiona Woolf, the Lord Mayor of London, told Bloomberg News yesterday that the threat to leave the EU had left a "sword of Damocles" suspended over the City of London and the British financial industry. Mr Osborne will reject such fears, insisting that seeking economic reform in Europe is in the best interests of Britain and its EU partners. "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," he will say. 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. The Chancellor's comments will come hard on the heels of the Treasury's own economic forecasters saying that immigration has "beneficial" economic effects and that cutting the number of foreign workers in Britain will make it harder for the Government to clear its deficit. The Office for Budget Responsibility told MPs that immigration has a positive impact on the public finances. Robert Chote, the OBR's chairman, suggested that, over a 50-year period, restricting immigration on this scale could increase the accumulated national debt by as much as 20 per cent of GDP - equivalent to about £300 billion at today's prices.