What's In Store For Europe And Asia?

Sunday Morning correspondents Mark Phillips in London and Barry Petersen in Beijing examine the changes in store in Europe and Asia this year and what it could mean for the United States.

The march of history used to seem easier to predict. Royal lines determined who led and who followed. Oddly, there's still some of that going on in Britain today. Prince William, who has just graduated from the military academy at Sandhurst, is ordained to be king one day, although with a robust grandmother and middle-aged father he's got some time to prepare.

But another transition will take place sooner. Tony Blair will be gone over the next year — probably sometime next summer. His departure hastened — if you can say that about a Prime Minister who lasted a decade — by the quagmire of Iraq.

Blair, whose foreign policy has been nailed to the mast of the Atlantic alliance, provided President George Bush with some international cover for the Iraq adventure. And Blair's political fortunes have mirrored Bush's: Opinion polls show him trailing the Conservative opposition here by 10 points.

Gordon Brown, the Chancellor of the Exchequer or finance minister, will succeed Blair. Whether he continues to march British policy in lock step with the United States will be the political story of the year.

Here's another political change you can count on: whether you're of the "surrender monkey" or the "noble independent" view of France, it too will have a new leader this coming year. Jacques Chirac and his knack for infuriating Washington will be gone. Who will replace him is a coin toss. Nicolas Sarkozy, Chirac's successor on the right and Ségolène Royal, the socialist candidate, are running neck and neck.

In fact, uncertainty seems the only certain for the new year in both Europe and the Middle East. The Olmert government in Israel is still trying to recover its footing after stumbling through its brief war with the Palestinian Hezbollah movement in Lebanon last summer.

The Lebanese government has been under virtual siege from Hezbollah demonstrators, who were emboldened by their resistance against Israel and now want a larger share of power.

And the beleaguered Palestinian President, Mahmoud Abbas, has all but given up trying to form a unity government between his own Fatah movement and the more militant Hamas. The conflict threatens to become a full-blown civil war.

For light relief and pure voyeurism though, attention might turn back to Britain where the divorce of the century — so far — between Paul McCartney and Heather Mills, may be resolved, for a price.

And there are always those Royals. Will William ever find a real job? Will Kate Middleton, who clearly has the royal hat thing down, become the next official royal romance?

In Asia, there are some very pressing concerns taking shape. North Korean children are so young and bright, and yet there is something ominous about another generation of North Koreans being shaped and molded and taught that someday they may fight a war with the United States. That is why North Korea's nuclear weapons program will hang like a thundercloud over Asia in 2007.

North Korea's Kim Jong Il believes time is on his side, said professor and former American diplomat Kenneth Quinones.

"We've got two options here," he said the North Korean leader thinks: "We can either get the United States to negotiate with us, or we'll pull back and we'll continue to aim for a nuclear equipped, armed ballistic missile."

Japan remembers being the only country attacked by nuclear bombs to end World War II, but Japan's new Prime Minister now wants nuclear weapons and a self-defense force with first-strike capability.

In order to do that, Japan must change its pacific constitution imposed by America after World War II. The debate will be framed as an effort to discard a 60-year-old constitution no longer relevant to these times.

Today, Japan sees China as its biggest rival. China's military is still better at putting on shows than fighting a modern, computer-driven war. But as China gets rich, it's spending to become the next superpower.

The Chinese now shop at Sam's Club and buy goods mostly made in China — just like American shoppers. An incoming Democratic congress may want trade restrictions hoping to bring these jobs back to America. While in China, a higher standard of living means workers are winning higher wages, so manufacturers are leaving for cheaper labor in places like Vietnam.

Cheap labor and a global economy helped China get rich, leaving other countries with closed factories and unemployed workers. In 2007 and beyond, the global economy may China a big dose of the same, bitter medicine.