Bleak New World

Europe will have completed its institutional reforms by 2025, but will remain weak on the world stage while the economic and political clout of the United States will decline, the spread of nuclear weapons and cyber-terrorism will emerge as the most potent global threats, and new wars are likely to be fought over water and food scarcity.

This is the bleak assessment of the NIC's 120-page "Global Trends 2025" report released on Thursday, Nov. 20. The report takes a long-term view of how key issues are likely to develop over the next few years.

According to the report, the European Union will be a "hobbled giant" crippled by internal bickering and a euroskeptic citizenry by 2025.

The reports forecasts that by this date, the EU will have completed its institutional reforms and consolidated itself as a political entity.

"Europe by 2025 will have made slow progress toward achieving the vision of current leaders and elites: a cohesive, integrated, and influential global actor," the report section on the EU begins optimistically, while declaring that the EU will at the same time not be a major military player.

However, it goes on to say that infighting between member states with competing domestic interests and a European public alienated by a perceived democratic deficit will leave it a "hobbled giant," with massive economic heft but little genuine international power.

"The European Union would need to resolve a perceived democracy gap dividing Brussels from European voters and move past the protracted debate about its institutional structures," the report states.

"Continued failure to convince skeptical publics of the benefits of deeper economic, political, and social integration ... could leave the EU a hobbled giant distracted by internal bickering and competing national agendas, and less able to translate its economic clout into global influence," it continues.

Economic pressures to weigh heavy on EU infrastructure

The EU's public services and welfare system could also become the victims of the crippling financial burden put on them by retiring baby-boomers.

"The drop-off in working-age populations will prove a severe test for Europe's social welfare model, a foundation stone of Western Europe's political cohesion since World War II," the report foresees, adding that aging populations will force "more dramatic changes" when Europe hits a crisis point in trying to fix its "demographic deficit," with the report diagnosing cutbacks to healthcare and pensions as the only solution.

Europe will also face the acute challenge of integrating immigrants, particularly from Muslim backgrounds, at a time of economic difficulties. The report warns that Europeans could resort "to narrow nationalism ... as happened in the past" if they feel threatened by the continued and increasing influx of immigrants.

Moreover, the question of Turkey's ultimate EU membership will be "a test of Europe's outward focus between now and 2025. Increasing doubts about Turkey's chances are likely to slow its implementation of political and human rights reforms."

"Any outright rejection risks wider repercussions, reinforcing arguments in the Muslim world -- including among Europe's Muslim minorities -- about the incompatibility of the West and Islam," the reports states.

Organized crime threat to Eastern European members

The report also predicts that the spread and influence of organized crime in the eastern reaches of the bloc could see one or more member state governments in Eastern Europe being taken over by criminals by 2025.

"Crime could be the gravest threat inside Europe as Eurasian transnational organizations -- flush from involvement in energy and mineral concerns -- become more powerful and broaden their scope," the reports states. "One or more governments in eastern or central Europe could fall prey to their domination."

In terms of energy dependency, the EU will be increasingly reliant on Moscow and the influence of the Kremlin after having failed at all attempts to wean itself from Russian energy supplies.

"Europe will remain heavily dependent on Russia for energy in 2025, despite efforts to promote energy efficiency and renewable energy and lower greenhouse gas emissions," it says.

This continued dependence "will foster constant attentiveness to Moscow's interests by key countries, including Germany and Italy, who see Russia as a reliable supplier" and could endanger the union "if Russian firms are unable to full fill contract commitments because of underinvestment in their natural gas fields or if growing corruption and organized criminal involvement in the Eurasian energy sector spill over to infect Western business interests."

United States facing era of diminished power

Elsewhere in the report, the NIC paints a gloomy picture for the United States, saying it will "the single most powerful country," but it will be significantly less dominant, with shrinking military and economic capabilities.

The report forecast a revolutionized world order, with the most powerful players being Brazil, Russia, India and China. It also described an unprecedented transfer of wealth from the West to the East, and a staggering population increase of 1.5 billion people, which would put pressure on increasingly scarce resources such as energy, food and water.

The economic growth projections for Brazil, Russia, India and China indicate that they will match the original Group of Seven's share of global GDP between 2040 and 2050.

The report said that China was set to have more global impact in the next 20 years than any other country -- by 2025 it will have the world's second-largest economy, be a leading military power, the largest importer of natural resources and the biggest polluter.

"No other countries are projected to rise to the level of China, India or Russia, and none is likely to match their individual global clout," the report forecasts.

Middle East, Africa to see increased conflict

The report also warns that "the potential for conflict will increase owing partly to political turbulence in parts of the greater Middle East," and apart from the US, countries such as Russia, China and India will play greater roles as negotiators.

Among the regions expected to fall further behind were sub-Saharan Africa, which will continue to be face economic disruption, high population growth, civil conflict and political instability.

The countries of Asia, Africa and Latin America will account for virtually all population growth over the next 20 years, while less than 3 percent of the growth will occur in the West, the report said.