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Financial crisis may be an economic 9/11

The crisis in financial markets may prove to be an economic 9/11, by breeding conflict and instability and threatening to push democracies into narrow nationalism, Liberal Democrat leader Nick Clegg said today.

In a speech to the Institute for Public Policy Research at Canary Wharf, Nick Clegg 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.

“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.”

Talking about the role Europe needs to play, he added: “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.

“It is up to European leaders to emulate the courage and cooperation that fixed the global economy the last time it lay in tatters.

“This time they must embrace the new powers of China, India and Brazil, rather than sustaining the post war settlement of over 50 years ago.”

And commenting on today’s announcement of the Government’s £37bn bail-out plan he added: “It is welcome that the next stage of this bail-out has taken place so fast and will hopefully begin to stabilise the market.

“The sheer magnitude of the Government’s stake in the banks makes a sea change in the culture of remuneration in our financial services now even more urgent.”

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