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2012 Year-Ender

by Gwynne Dyer

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Meanwhile, secessionist movements flourished in major EU states. In Spain, both Catalonia and the Basque region elected provincial governments committed to holding referendums on independence. The United Kingdom and the recently devolved Scottish government agreed on the terms of a referendum to be held on Scottish independence in 2014. And in Belgium, Flemish threats to secede seemed more plausible than usual.

It's a mess, in other words, and Europe certainly faces years of very low economic growth. But the EU was always mainly a political project, intended to end centuries of devastating wars in Europe, and the euro was invented to reinforce that political union.

That project still has the firm support of the political elites in almost all EU countries, and they will pay whatever price is necessary to save it. Even in the regions considering secession from their current countries, there is no appetite for leaving the EU. Indeed, the strongest argument of the anti-secessionists is to say that those regions would have to re-apply for EU membership if they got their independence, rather than just inheriting it automatically.

So the European Union will survive, and will even recover its financial stability eventually. It will also remain a major economic player in the world, athough the centre of gravity of the global economy will continue to shift towards Asia. There is even reason to think that Asia's triumph will arrive somewhat later, and in a rather more muted fashion, than the enthusiasts have been predicting in recent years.

In the last months of 2012 China went through the ten-yearly ritual in which power is handed on to a new generation of leaders, and both Japan and South Korea elected new right-wing governments. North Korea, the nuclear-armed rogue state that lies between them, put its first satellite into orbit, thus demonstrating its ability to build long-range ballistic missiles. And China was almost continuously embroiled in border disputes with its neighbours (Vietnam, the Philippines, Malaysia) in the South China Sea.

The cloud on the horizon is still "no bigger than a man's hand," but it is definitely there. We can hope that the world works differently nowadays, and in some ways it really does, but the fears, the nationalist passions, and even the strategic relationships in Asia are coming to resemble those in Europe a century ago, on the eve of the First World War.

Even if an equivalent war never actually happens in Asia, a growing share of the region's resources may be wasted on military spending. And if there ever were a real war, the destruction would be so great, given current weapons technologies, that the region could lose several decades' worth of growth. But it will be some years yet before we know if the region is really drifting in that direction.

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