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Conservatives have warned that the European Union has lost its way and now needs a complete change of direction. Delivering a keynote speech to the Centre for European Reform in London, George Osborne said the EU is trying too hard to create a political union and should instead ensure that its member states more effectively compete in the new global economy. The Shadow Chancellor declared: "The European Union has not understood that it needs a complete change of direction. It hasn't understood that today the primary challenge we face is an economic one not a political one. For my generation the question for Europe is not how to unite but how to compete - not only within Europe, but with the rest of the world." Warning that with close to 20 million people unemployed, millions more economically inactive, competitiveness falling, and economic power shifting east, Mr Osborne called for a 180 degree change in thinking, and stressed: "Europe has to wake up and realise: it's the economy stupid." Mr Osborne also announced that David Cameron and the Czech Prime Minister will soon launch a new agenda for the Movement for European Reform to make the case - not just in the UK, but across Europe - for a flexible, outward looking, competitive Europe. And outlining a vision for Europe and the Conservative agenda for a new more dynamic European Union, the Shadow Chancellor stated: "We must drive for free trade within the EU: we should complete the single market in services. We should be as energetic in overcoming French opposition to liberalisation as the French are in blocking British efforts to reform the CAP." He said: "We should be insisting that the EU's central external objective is break the Doha deadlock. As the second biggest market in the world, the EU has the weight to drive forward trade negotiations. So let us drive free trade. "And we cannot open free trade to the agricultural markets of the developing world without CAP reform. Yet in 2003 Britain, for all the rhetoric about being at the heart of Europe, was excluded from the Franco-German deal on the CAP. Our response: throw away the rebate, our biggest bargaining chip for future reform. "We should start preparing the ground now for the next mid-term review in 2008 - and identify now the opportunities for maximum leverage. And we should reclaim control over issues of social legislation. We support the minimum wage, maternity rights and other important employment protections. But we believe these decisions should be decided by national governments.
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