Page last updated at 10:45 GMT, Monday, 13 October 2008 11:45 UK

Clegg warns of 'economic 9/11'

Nick Clegg said the package was necessary but not sufficient

The global financial crisis may turn out to be an "economic 9/11", Liberal Democrat leader Nick Clegg has warned.

Extremist groups could search for support among people who considered themselves victims of "economic injustice", he added.

European governments had to "step up to the plate" to reduce economic inequality, Mr Clegg said.

A long recession could also damage the countries' ability to keep troops stationed in Afghanistan, he predicted.

'No less profound'

Mr Clegg, speaking to the Institute for Public Policy Research in London, said: "In our world, economic strength is power. We do not yet know, when the dust settles from this crisis, where the power will lie.

"The financial collapse we are caught in may prove to be an economic 9/11.

In our globalised world, chains of cause and effect have no regard for territorial integrity
Nick Clegg

"9/11 was a security crisis, with security implications. This is an economic crisis, but its economic and social security implications are potentially no less profound."

Mr Clegg said the US could emerge from the financial crisis "less confident, less self-assured" and that this would "embolden America's enemies... rogue regimes who will seek to exploit the shift in global power."

Countries such as Iran could use the situation to develop nuclear weapons, he added.

Governments had to make greater efforts at to fight inequality at home, as well as abroad, Mr Clegg said, adding: "It is time for Europe to step up to the plate.

"This crisis has proved that, in our globalised world, chains of cause and effect have no regard for territorial integrity.

"European governments have a responsibility to reduce inequality in their own countries and to work together to reduce it across Europe as a whole.

"Extremists target vulnerable and marginalised groups. They will only find sympathy for their cause if disaffected groups feel that economic injustice has pushed them right to the edge."

Mr Clegg said European leaders had to "emulate the courage and co-operation" used to repair national economies after the Second World War.


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