LONDON: From a showdown over Iran to Europe's economic collapse: It's not hard to think of disasters which may dominate the coming year. But the reality is that these crises, which have been with us for a long period, are now undergoing subtle shifts. Although they will have a serious impact on our immediate future, they now require a very different approach.

For much of 2012, Europe continued to stagger from one financial crisis to another with its usual lethal combination of myopia, infuriating slowness and hesitant political leadership. Disaster was averted only because German Chancellor Angela Merkel realised that toying with the idea of kicking countries out of the euro zone may vindicate her own country's sense of righteousness and boost her national popularity but is guaranteed to tear the continent apart.

As the saying goes - or ought to go - behind every great woman there is often an equally great man. For it was Mario Draghi, the Italian head of the European Central Bank, who ultimately put an end to the panic.

He vowed "to do whatever it takes and, believe me, it will be enough" to prevent countries from defaulting on their debts.

Does this mean that the crisis is over? Not in the slightest. Just a few weeks from now, Spain and Cyprus will formally ask for huge loans from their European neighbours. Big question marks persist over the financial situation of Italy and France. The mere hint that one of these two may need a bailout is guaranteed to bring the entire European edifice down.

But Europe's financial crisis is changing in both character and potential impact. The dispute is not about a temporary fiscal difficulty but is ultimately a clash of civilisations between nations which have always assumed that it is the job of their governments to borrow and spend as much as possible and those, like the Germans, who view borrowing as essentially a sin. It is highly significant that in the German language, the word schuld means both monetary debt and moral guilt. The Germans regularly refer to their indebted neighbours as schuldensunder or "debt sinners". Unless this clash of civilisations is either resolved or ignored, the European continent will remain in turmoil.

Euro crisis of faith spreads: Europe's crisis is also prompting a broader worldwide debate on re-ordering the balance between governments and financial markets. All the euro bailouts were based on the assumption that markets dictate the fate of nations and that there is nothing worse than defaulting on one's debts. There was also the assumption that monetary policy should be left to central banks. These in turn were only concerned with the stability of the currency, regardless of how bad the actual economic situation was.

But both assumptions will be seriously questioned in the coming year. None other than the International Monetary Fund (IMF) is now insisting that in any future European bailout, investors who took risks in lending money should also shoulder the losses. Meanwhile, Japanese Premier Shinzo Abe won the election on a platform which promises to curtail his national bank's independence unless it agrees to relax its monetary policy. His victory serves as a perfect example of how a crisis which began in Europe and initially seemed confined to the "old continent" is now impacting the entire intellectual climate surrounding the management of the global economy.

Middle East in flames: The crisis over Iran's nuclear standoff is also experiencing its own metamorphosis. Israeli Prime Minister Benjamin Netanyahu spent most of 2012 issuing blood-curdling threats about an impending military strike on Iran only to finish the year by accepting that, at least for the moment, the military option is off the table.

Yet that's another crisis postponed rather than averted. The United States will try hard to reach a deal with the Iranians, by negotiating with Teheran both in public and in private. And it is always possible to construct an optimistic scenario in which a deal emerges. But there are no indications that the Iranians would peacefully abandon their nuclear quest. Having succeeded in going as far as it did and given the fact that the very legitimacy of the Iranian regime depends on its radical anti-US stance, Teheran is highly unlikely to be in a mood to compromise.

There is no need to invent an apocalyptic scenario in which all of the Middle East is consumed by the flames of war. Still, there is no doubt that the wave of Arab revolutions and the brutal civil warfare in Syria have the potential to tear apart all the borders and territorial arrangements put in place a century ago by Britain and France, once the region's colonial powers.

Either way, a nuclear-armed Iran represents such a threat to the US dominance of the Middle East that no American administration can ignore it, however pacifist its instincts may be. The chances are therefore high that by the end of new year, a military strike on Iran would have taken place. This will do nothing to resolve the Middle East's fundamental problems. But it will buy time, which very often is the only viable strategy in such crises.

Institutional reforms delay: Such difficulties could be handled better if global multilateral institutions, such as the United Nations and the IMF, were more efficient in organising their business and more representative of today's world. But the opportunity to reform these institutions was missed in 2012 and is likely to be missed in 2013 as well.

And the real culprits are not the old Western powers, which supposedly cling to an antiquated arrangement which they created at the end of World War II, but rather the emerging powers, which so noisily demand a complete overhaul. It is not the West, but China which stands in the way of India joining the ranks of the permanent members of the UN Security Council. And it is not the West which is an obstacle to China or India exercising a greater say in the IMF.

The reality is that, despite their protestations, the Brics nations - Brazil, Russia, India, China and South Africa - want to have their cake and eat it. They resent the US-led global arrangements but are unwilling to pay the price for changing the system and unsure what they actually want to replace it with.

And the outcome is often peculiar. The US no longer needs any oil or natural gas from the Middle East. But it is still expected to impose Middle Eastern stability so that China and Japan may continue buying their energy resources. It is not the US but China which will suffer most if North Korea's defiance of international law unleashes a broader Asian nuclear proliferation. Still, it is the US which is expected to deal with Pyongyang, while China often pretends to act as mere arbiter.

But, as will become clear in 2013, the Brics nations will pay a price for their prevarication. For, although the US may be in the throes of a long-term decline, Washington's ability to forge regional alliances with various European and Asian nations will ensure that America remains the world's pre-eminent power. Neither Russia nor China may like it, but the crisis in Syria or the showdown with Iran will be primarily decided in the White House. Simply put, the Brics nations can't have their cake and eat it.Still, it's reassuring to discover that some things never change, and that each year attracts its own superstitious doomsayers. The conclusion of the Mayan calendar in 2012 was supposed to signify the end of the world. And many in the West who fear the number 13 are approaching in 2013 apprehensively; their obsession even has a name - it's called triskaidekaphobia.

By arrangement with The Straits Times/ANN