Today's bombing in London will create a temporary crisis of confidence... very temporary. What is more likely to happen is that Europeans will begin to view all Muslims with increasing hostility.
Why? Because most Muslims in Europe have not demonstrated any indication that they are against those who are responsible for a similar attack in Spain and the murder of a Danish film maker Theo Van Gogh, recently. There have been no clerics or leaders stepping forward denouncing these actions. Don't expect them in England. I suspect that even though the Muslims might be horrified by the actions, they are secretly delighted that the Europeans are getting "payback" for displacing the Ottoman Empire's glory.
The Middle Eastern version of Islam, particularly the religious state versions, have stifled the Muslims with regard to social, intellectual, and economic growth which they are all too willing to blame the on the West.
That said, it is unlikely that there will be any negative reaction coming out of the Muslim world... more likely a positive reaction to the murders in England.
What are the long term effects? I think that the Europeans will begin to resist further immigration of Muslims. It is likely that Turkey's efforts to join the European Union will be hurt further. Muslims living in Europe will find themselves the targets of hate crimes.
But what would surprise me least is that there may be secret communications by the European governments with the leaders of Iran and Syria warning that further attacks by the Muslim extremists will result in mysterious explosions in Damascus and Tehran. It is no secret that Iran and Syria directly and actively support the terrorists. They may not control them, but they give them sanctuary and resources. An EMP cruise missle or two would send a strong message: DON'T TREAD ON ME! It's time the jackels were restrained... or the lions may be unleashed.
