The Former British MEP also warned that efforts to “thwart” the growth of populism could only effectively be done in member states and not in Brussels.
Clegg, who was recently knighted, was addressing a debate on the future of Europe.
The event, organised by the Lisbon council, comes amid the start of the next round of Brexit talks between the EU and UK.
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Clegg told the packed audience, “We are living in very volatile times and, of course, the departure of the UK from the EU will be tragic.
“However, the answer to the rise of populism does not lie here in Brussels but back in the roots and fabric of debate in our member states.”
“This is a fight that will have to be done, not in the commission, but in the day to day grist of life in our own countries.”
Clegg recalled the period he had spent both as an MEP and in the European Commission, saying, “I spent five happy years in the parliament and the same period in the commission and I am known in the UK as being one of the most ardent pro-Europeans in the country.
“But I have to tell you today that I also remain stubbornly Anglo-Saxon in believing in the sovereignty of the member states.”
"The answer to the rise of populism does not lie here in Brussels but back in the roots and fabric of debate in our member states” Nick Clegg
Clegg is a former leader of the Liberal Democrats and former deputy prime minister of the UK (2010-2015).
Speaking at the same event, Lisbon council president Paul Hofheinz pointed out that the EU had recovered economically, with growth of 2.5 per cent in 2017, the highest rate since 2007.
He also said that unemployment, at 7.3 per cent, was the lowest for ten years.
Meanwhile, EU chief Brexit negotiator Michel Barnier has said the UK will face “unavoidable” barriers to trade in goods and services outside the EU customs union and single market.
Speaking on Monday after a meeting in London with Prime Minister Theresa May and Brexit Secretary David Davis, Barnier warned that “the time has come” for the UK to make a choice on what it wants the future UK-EU relationship to look like.
“We have to respect the red lines of the British government but they have to respect the rules of the Union” Michel Barnier
On the transitional arrangements, Barnier stressed, “Everyone has to play by the same rules”, adding, “The certainty about this transition will only come with the ratification of the withdrawal agreement.”
Davis responded, “It’s perfectly clear what we want to do. There’s no doubt about it, we are leaving the customs union.”
Speaking before the meeting Barnier had said, “We want to reach a deal, respecting the guidelines of the European Council, respecting the rules of the single market of the Union. So once again we have not a minute to lose.”
Asked about the UK’s apparent decision to rule out any future customs union with the EU, Barnier said, “We have to respect the red lines of the British government but they have to respect the rules of the Union.”