Nobel chairman warns Europe's leaders over 'inflaming far-right sentiment'

David Cameron leaves the Norwegian embassy after signing the book of condolences for the victims of Norway attacks. Photograph: John Stillwell/AFP/Getty Images

Europe's leaders, including David Cameron, have been warned to adopt a more "cautious" approach when discussing multiculturalism. The Norwegian chairman of the Nobel peace prize committee has told them they risk inflaming far-right and anti-Muslim sentiment.

Thorbjorn Jagland, a former prime minister of his country, said leaders such as the British premier would be "playing with fire" if they continued to use rhetoric that could be exploited by extremists.

Four months ago in Munich, Cameron declared that state multiculturalism had failed in Britain, a view immediately praised by Nick Griffin, leader of the BNP, as "a further huge leap for our ideas into the political mainstream". Marine Le Pen, vice-president of the far-right National Front party in France, also endorsed Cameron's view of multiculturalism, claiming that it corroborated her own party's line.

Jagland's comments come in the wake of the Oslo bomb and the massacre on Utoya Island that left 77 people dead. The killer, Anders Behring Breivik, said he was inspired by the right-wing English Defence League. Breivik sent his manifesto, published online hours before the attacks, to about 250 British members of the BNP, the EDL and the Stop Islamisation of Europe group.

Jagland, who is also secretary general of the Council of Europe, told the Observer: "We have to be very careful how we are discussing these issues, what words are used.

"Political leaders have got to defend the fact that society has become more diverse. We have to defend the reality, otherwise we are going to get into a mess. I think political leaders have to send a clear message to embrace it and benefit from it.

"We should be very cautious now, we should not play with fire. Therefore I think the words we are using are very important because it can lead to much more."

Jagland has also urged leading politicians to change their terminology. He said the word "diversity" was better than multiculturalism because the latter had become defined in different ways by different groups. "We also need to stop using 'Islamic terrorism', which indicates that terrorism is about Islam. We should be saying that terrorism is terrorism and not linked to religion," said Jagland.

Over the years before his attacks, Breivik developed an ultra-radical stance that initially incorporated the forced repatriation of Muslims from Europe, but ultimately targeted Norway's centre-left government, which had encouraged multiculturalism. During his court appearance on terrorism charges, the 32-year-old said he had acted to prevent the "Muslim takeover" of Europe.

It hasemerged that during a 10-hour interrogation, Breivik told police that he also considered attacking other government and Labour party targets in Norway. Police attorney Paal-Fredrik Hjort Kraby revealed that Breivik had again asked interrogators how many people he had killed and "showed no emotion" when they told him.

As Norway struggles to come to terms with the killings, with the first of the dead being buried on Friday, the process of establishing whether Breivik is insane, as his lawyer has asserted, is due to begin. Psychiatrists said the process would involve months of observation, interviews and analysis, insisting that it is hard to fake mental illness. It has also emerged that more than 250 people were picked up by boats from the waters off Utoya Island as Breivik conducted his 90-minute shooting rampage. About 650 people were on the island, of whom at least 68 were killed, most of them teenagers.

During Cameron's Munich speech, which combined a passage on terrorism with one on integration, the prime minister talked extensively about "Islamist extremism" as being the source of terrorism.

Breivik saw David Miliband, Gordon Brown and Tony Blair as worthy of assassination because, according to his 1,500-page manifesto, they had a "friendly attitude" to immigrants.

Jagland says he has sympathy with Cameron's attempt to robustly promote a shared set of British values as an alternative to multiculturalism, if not with his delivery. "We are not searching for a society where we have only different cultures. We also need to have something that holds us together, to respect common values," he said.

Jagland, who last year gave the Nobel peace prize to jailed Chinese dissident Liu Xiaobo, who was represented by an empty chair at the ceremony in Oslo, added that the immigration debate also needed to be less negative.

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US debt crisis: Obama warns of 'tax rise for all' if deal cannot be done

US President Barack Obama during a press conference on the debt ceiling in which he said Republican proposals for a budget deal without tax increases were not credible. Photograph: Mandel Ngan/AFP/Getty Images

Barack Obama has warned that the US is "running out of time" to raise the limit on US government borrowing and that failure to do so will lead in effect to a tax increase for all Americans, because a downgrade of the country's credit rating would cause an interest rate rise.

The president's warning was reinforced by a threat from the ratings agency Standard & Poor's to strip the US of its AAA standing if no long-term political deal is reached to tackle government spending and debt.

As Obama and Republican leaders in Congress continued to wrangle over the terms for approving an increase in the US's $14.3 trillion (?8.9tn) debt ceiling by the 2 August deadline – with Republicans rejecting Obama's demand that tax increases for the wealthy accompany sharp budget cuts – the president warned ordinary Americans of the seriousness of the situation.

"This is not some abstract issue. These are obligations that the United States has taken on in the past. The Congress has run up the credit card and we now have an obligation to pay our bills. If we do not it could have a whole set of adverse consequences. We could end up with a situation, for example, where interest rates rise for everybody all throughout the country, effectively a tax increase on everybody," he said.

But Obama also told a White House press conference that while the situation was serious, it could be resolved. "We don't have to do anything radical to solve this problem. Contrary to what some folks say, we're not Greece, we're not Portugal.

"It turns out that our problem is we cut taxes without paying for them over the last decade ... We fought two wars. We didn't pay for them. We had a bad recession that required a recovery act and stimulus spending."

S&P, which follows Moody's in warning of a possible downgrading of the US's top credit rating, put America on negative watch on Thursday and said there was "at least a one-in-two likelihood" that it could downgrade its debt "by one or more notches ... if we conclude that Congress and the administration have not achieved a credible solution to the rising US government debt burden and are not likely to achieve one in the foreseeable future".

Obama said that political leaders "should not even be this close to a deadline on this issue", but he stood firm in his opposition to Republican plans for $2.4tn in immediate spending cuts. The president said to achieve that level of savings without added tax revenues would require the "gutting" of social programmes that he could not support. He said that when ordinary Americans are asked to contribute more to retirement and healthcare programmes, then "millionaires and billionaires can afford to do a bit more".

Republican leaders in the US Senate appeared to be edging closer to an emergency deal with Democrats that would permit the president to raise the debt ceiling unilaterally, but there was continued opposition from fiscal conservatives in the House of Representatives who view such an arrangement as a victory for the White House. Obama said that the Republicans had "boxed themselves in" with election commitments.

The Republican leadership in the House of Representatives said it won control of the lower house of Congress in last November's election with a mandate to sharply cut government spending without any increase in taxes.

The Tea Party movement and fiscal conservatives intend to hold newly elected House members to that commitment, and warn that any deal with the president that does not include deep cuts or permits tax increases will be viewed as a betrayal.

Obama described any temporary solution that did not tackle long-term spending problems as the least attractive option. "We have a unique opportunity to do something big. We have a chance to stabilise America's finances for a decade, for 15 years or 20 years, if we're willing to seize the moment," he said.

John Chambers, chairman of S&P's sovereign ratings committee, also warned that an interim solution of the kind under discussion in the Senate would not be good enough and that Washington must tackle the long-term debt issue. "If you get a small agreement, that will lead to a downgrade," he told Reuters.

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