Fareed zakaria gps is next. This is gps xwloglobal pub square. Im Fareed Zakaria coming to you from london. On todays show well look ahead at what 2013 might bring around the world. I have a great panel Richard Haass, annmarie slaughter and lionel barber. Will israel bomb iran and will the euro zone finally break apart . Then the fiscal cliff. The view from across the pond. How did our political process look from a perch overseas and what will it all mean for the u. S. Economy and the Global Economy . Also, will this be indias awakening . The nation confronts its own dark corners after a despicable deadly act. Ill look at some parallels with americas recent Tragic School shooting. First, heres my take. The deal to avoid the fiscal cliff is a small victory for sanity, but what it says about the future is somewhat bleak. Washington will probably lurch from crisis to crisis kicking problems forward and placing band aids Small Solutions on those it does address. There will likely be no largescale initiative on entitlement reform, energy policy, probably even Immigration Reform and this is the real worry. Because beyond the selfinflicted crisis of the cliff and the forthcoming debt ceiling, the United States faces a much deeper challenge. For more than a decade now, for many decades by some measures, americas growth rates have slowed. Recoveries have been jobless. And median wages have declined. Some combination of the information revolution and globalization has placed tough pressures on highwage countries like the United States. These new forces of technology and globalization are accelerating and without a strategy to revive growth, longterm growth, all our problems get worse, including and especially our debt. Washingtons focus so far has been on raising taxes and cutting spending. It should really be on reforming and investing in the American Economy. Historically when the American Government or the world bank or the imf advised countries that got into trouble, they usually stress that achieving fiscal stability, austerity was only a part of the solution. The key to reviving growth is structural reform to make the economy more competitive, as well as crucial investments in human and physical capital to ensure the next generation of growth. Yet, we have not followed our own prescriptions. The United States has plenty of areas where it could become much more competitive. It has a corrupt tax code that clocks in at 73,000 pages, including regulations. It has vast areas of the economy like agriculture that receive destroying subsidies for no national purpose. If the case for reform is important, the case for investment is urgent. The big shift in the American Economy over the last 30 years has been a decline in the quality of physical and human capital. Take one example relating to our physical capital, infrastructure. It is estimated that it will cost 25 billion to upgrade americas air traffic computers to the next system that will allow for safer and faster air traffic. By not making this investment, we are measurably slowing down Economic Activity and growth. Multiply this example by dozens and dozens and you get a sense of the scale of our infrastructure problem and deficit. Or consider the decline in human capital. We used to lead the world in Young College graduates. We now rank 14th and dropping. The federal government spends plenty of money, but the largest part of our budget now goes directly to entitlements. Spending on present consumption like entitlements has large constituencies and spending for the next generation of growth, investment, has few supporters. Recently, the Washington Post interviewed the scholar who famously predicted that japan would become the worlds number one economy in the 1980s. Vogel explained while japans economic miracle was real and its economy stayed very sophisticated, he never foresaw how its political system would seize up and become unable to solve the challenges it faced in the 1990s. Today japan remains a rich country, but with a diminishing future. Its per capita is 24th and falling. Lets just hope that 20 years from now people do not look back and say the American Economy was vibrant, but the american political system seized up in a similar way. For more on this, take a look at my column in Washington Post and my recent article in foreign affairs. For links to both, go to cnn. Com fareed. Lets get started. First with flashpoints for 2013. What we should expect. So, what will 2013 bring across the world . Lets look into our crystal balls and make some well informed predictions. Joining me now are two former heads of the state departments internal think tank annemarie slaughter is professor at Princeton University and Richard Haass president of the council on Foreign Relations and also ian bremer. Welcome, all. So, the first one i want to talk about is assad. You thought last year he would have fallen by now. Most people did. It looks like a better prediction this year, but it seems as though its even conceivable that he could wait out 2013 or no . No, i dont think so. I would say he hasnt fallen yet, but were now into the end game where its clear hes going to fall and just a question of how long, not just were predicting, we want him out, but he really is on his way out. I dont think there is any way he will survive 2013, but im not convinced there will be a government to replace him by the end of 2013. Why has he stayed there as long . I was more skeptical that he would fall quickly and the reason was simple. A very strong army and they have been incredibly brutal in their willingness to use it against the rebels. Thats part of it. Its a real state. This is not like this is a real state but look what happened to the sunnis in iraq. They took their cue from that. They know its not going to be pretty aftermath and they had external support. The russians and the chinese diplomatically and the iranians militari militarily. You add all this up and they had this combination of real reason to hang in there, plus some external friends who has enabled them to do it. Plus, one other thing, the opposition is not a single opposition. The opposition is plural. Hundreds and hundreds if not thousands. Hard to dignify it and this, too, has given them a lot of space. Theyre going to be dwagone ande real question is how messy the aftermath . You have done some work on just the incredibly fractured nature of syria. How messy both within syria because its very unlikely theyll be an effective government to replace assads regime as they withdraw and also the impact of refugees streaming across the border. Over 500,000 already in jordan and turkey and iraq and north africa, as well as jihadists causing violence in places like jordan and iraq. So, its not only messy in terms of a continuing bleeding human Rights Problem on the ground in syria, irrespective if assad is there at the end of 2013 or not, but also because well see more sectarian violence metastasizing because of the outcomes. I think ian is absolutely right. If you look at the number of refugees, they are already starting to destabilize jordan, just in terms of inability to cope. In turkey, if syria splits into multiple regions, a i think will certainly happen for a while, youll have a zone in syria that is going to create major trouble for turkey and lebanon is already being destabilized actively by supporters of the sunni opposition. Were already seeing it and it will get much worse. A kurdish zone in syria means you have kurdish militias, potentially, trying to link up in turkey and in northern iraq, right . Northern iraq is basically a separate state from the rest of iraq in many ways and thats what the kurds have always wanted. Thats the turks Worst Nightmare and that is just one part of the fragmentation of syria. Lets talk about the one other one which is iraq. All these things, the United States has, in some ways, marginal influence because these are very deep, internal dimensions. The one thing where we have the train has left the station. We have said that we will not allow for containment and we are going to do something. I was at an event recently with former senior official and i said, do you think the United States should have said, ruled out containment and this guy said, well, i work for many, many president s and they all said things they later have to live with and they said that about north korea. What do you think will happen with iran . The first thing will happen will be a push for diplomacy and well see whether against this backdrop of sanctions whether you can come up with a deal that is essentially enough for the iranians and not too much for the United States and israelis. I think you have to be a little bit skeptical about that happening and then the real question is what the iranians actually do. I think the more probable trajectory they stop at least for the time being, just short of a Nuclear Weapon. That wouldnt trigger mr. Obamas comment. Netanyahus red line. Thats the bigger question. The israeli tolerance is less than the american tolerance. If the iranians say 90 of the way towards a Nuclear Weapon, can we live with that . The United States . Can the israelis live with that . That might depend in part on what the details are and what degree of inspections or transparency we have and what is the timeline between where they arrive at before they can actually have a Nuclear Weapon . Do we feel we will have other opportunities to interrupt it . That is the big debate of 2013 and what is so interesting about this, more than any other issue. This is the one that affects not just the entire region because it is already on edge for all the reasons that ian and annemarie mentions. I think this president will be different in terms of other president s in terms of being willing to strike iran because this president came into office determined to move the world away from Nuclear Weapons. He came in with the idea that if we have 30 countries in the world with Nuclear Weapons, were going to blow ourselves up. Part of his legacy is to actually move away to a less, to a world that could imagine not having Nuclear Weapons. So, iran for him is not just about Israel Security and not just about the middle east, but if another nation gets Nuclear Weapons, were never going to be able to stop this. So, i actually think if they go towards deciding to get a Nuclear Weapon, he will strike. He will not live with containment, but for broader reasons than other president s have had. The exit question, ill start with you. Will there be an israeli or American Strike in 2013 . No, absolutely not. But im also very skeptical that were going to see a deal. A lot of headlines about diplomacy, but the timing is very difficult. The iranians have their own elections coming up in june. The americans and others have so demonized the iranians that even if we got to a deal which is credible, which is highly unlikely. Our ability to sell it internally and externally would be very, very difficult. But when we ask, can we live with an iranian Nuclear Weapon . Hey, you call this living . This is the question. Its not really living, but were going to deal with it. I think thats where were headed. No strike, no deal . Would you agree . The chances of a strike are not negligible. We cant live with a Nuclear Weapon and israel and the United States may not be able to live with something that close to it. I think the chances of a strike are over 50 and because i think that is true, i think the chances of a deal are higher than ian does because there are reasons domestically in terms of the falling apart of the iranian economy that means they are looking for a way to get a deal. The deal and the strike have to collectively add up to 100 . So, i would give it 60 chance of strike, 40 chance of deal. We will be back. Well talk about the rest of the world. Europe, the United States, everything. Ive always had thate with the seeds getting under my denture. Super poligrip free it creates a seal of the dentures in my mouth. Even wellfitting dentures let in food particles. Super poligrip is zinc free. 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But now she wants my recipe [ clears his throat ] [ softly ] shes right behind me isnt she . [ male announcer ] progresso. You gotta taste this soup. We are back with annemarie slaughter, Richard Haass and ian bremmer. What is the big trend in europe . Is it a break down or will they come together . Europe is coming together. The biggest event of 2012 people didnt pay enough attention to is the fact that greeks pulled it together in the face of austerity like no one has ever seen and actually voted for the party that wanted to stay in the euro zone that wanted the bailout. That was an incredible show of will. Halting and clumsy and awkward as the eu politics are, theyre on the way to banking regulation in the euro zone. Its not going to be pretty and its going to take a couple years still, but we are on our way to a stronger and more unified eu with or without britain over time. What do you think . Too positive to me. Europe is probably not coming apart. Different said statement than europe is coming together. The reason it probably wont come together is not greece, its france. Sooner or later, that is the real test. The president of france is taking france in directions that are truly unsustainable economically. France cant leave if youre germany because thats the whole core, the whole dynamic. The relationship. Germany will go to great lengths, really, whatever lengths it takes to keep france in. Europe will survive but Economic Growth is not going to take off, still extremely weak because it doesnt have in place any of the prerequisites. The head of Morgan Stanley had a piece where he said that europe is actually going to bounce back in 2013 because they have paid the price, theyve done a lot of the difficult reforms that countries often have to do in these kind of crises and that theyll reap the benefits. Thats starting. Greek labor rates right now are about 25 less than they were at the start of the crisis. Theyre becoming more competitive and spanish exports picking up, as well. Bloated sectors in portugal, spain and italy are coming back and youre seeing more competitiveness. Europe is in recession and unemployment is at record levels and thats not going to stop in 2013. So, i am very optimistic that europe stays together. I think 2013 still looks like europe muddling through, but not muddling in place. It is moving into a better direction over time and the most important player is angela merkel. Merkel has almost 70 Approval Ratings right now. Astonishing given what shes done for all these shiftless in the periphery and further more, there was even 47 approval as opposed to 42 opposition in germany for additional greek bailout. Isnt that astonishing . Thats really the story here. The germans are onboard. And shell probably win reelection . Very easily. Lets keep moving. China. Richard, if the pivot to asia has been very successful, but in the sense that other countries the Asian Countries from indonesiana to vietnam to japan that the u. S. Is more engaged. Is there a danger that this turns into a kind of containment policy against china and the chinese dont like it and that produces its own u. S. china rivalry . If we were to move too much towards a policy, there was a danger fulfilling. What i think works against that, though, most of