We are on the edge of one of those periods of history when the gimbals on which the established order is mounted shift and a new world order begins to emerge. And these are, almost always, the most frightening and turbulent of times.

This recession will be different. This time, we will not plummet down and then bounce back comfortably to where we were before it all started. This is about something much deeper. The tectonic plates of power, in this case economic power, are shifting and when it is over we in the Western nations will, relatively speaking, be weaker and those in the Eastern nations will be relatively stronger.

The last time we saw a shift of power on this scale was when the leadership of the world passed across the Atlantic from the old powers of Europe to the new emerging power of the United States in the last century. And we all remember what followed that collapse of empires and the emergence of a new order. Only then, though power shifted, the values didn't. This time, we will experience not just a change of order, but a change of values too.

It is important, here to be clear exactly what is happening and what is not.

I am not saying that the rise of nations like China and India will be smooth or comfortable for them either. In China in particular there is likely to be considerable turbulence as, having largely freed their economy and now have to try to free their society. And Beijing is frightened by that – and they have every reason to be so. Chinese history is littered with instances when this great nation, as disparate and ethnically diverse as Europe, stands at the edge of greatness and then descends into dissolution and chaos.

But, though this may alter the time scale and manner of China's rise it will not alter their ultimate destination as one of the world's great powers.

Some, especially among my more leftwing friends tell me, often with ill-disguised glee, that we are seeing the beginning of the end of American power in the world. I do not believe that either. The symptoms of decline in nations, as in humans are scleroticism, institutional arthritis and resistance to change. And the United States shows none of these — as the still remarkable election of Barrack Obama very clearly shows.

Indeed it seems to me very probable that the United States will still be the world's most powerful nation for one or two decades yet, which, in practical terms is as far ahead as it is reasonable to make predictions.

But, though the position of the United States as the world's pre-eminent power, is not likely to change, the context in which she holds that position is now certain to.

We are no longer looking, as we have for more than the last half century, at a world dominated by single super power. The globe is no longer going to be mono-polar in the way it has been for most of the life times of most of the people in this room.

The growth of new power centres means the emergence of a much more multi polar world – a world which will look much more like Europe in the nineteenth century. And this will have a number of rather important consequences.

One will be a rise in regional groupings – of which history may say the EU was the first, albeit highly imperfect example.

Second and linked will be an increase in protectionism and probably a reversal of the movement towards free trade of the last half century – with all implications that carries for a destructive period of beggar my neighbour economic policies.

The third implication of this emerging pattern of world power, is for Europe.

In a much more multi sided world, the eyes of the US are likely to be at least as much, west across the Pacific, as east across the Atlantic. The Atlantic relationship will remain a key relationship but it will no longer be the lynch pin for all other policies, as it has been over the last half century. The US security guarantee, under which we have all sheltered since the second world war and which has enabled many of our European neighbours to take a free ride on Uncle Sam for their national security, no longer exists. Such United States soldiers as are left in Europe, are here, not for our defence, but to support their operations in Iraq and Afghanistan.

My guess is that Europe will be less important to every future US president, including Barack Hussein Obama, than we have been to every past one, including George W Bush.

Indeed I suspect that, having loved to hate him, we Europeans may well find ourselves missing George Bush before too long.

George Bush may well turn out to be the last US president to have had an emotional tie to Europe. In future we are likely to be judged by Washington, not on the basis of history, but according to a rather cool, even brutal appraisal of what we can deliver when it comes to pursuing our joint interests – and here the answer is not much, if Afghanistan is anything to go by.

The United States is increasingly going to have interests in the world which do not always coincide with those of Europe. And we are going to have interests in the world which do not always coincide with theirs. What this means that we Europeans are going to need in the future, to have a rather more subtle and sophisticated foreign policy than hanging on to the apron strings of our neighbourhood friend, the world's only super power.

But that's not the end of the story. We, Europe, are losing the US as our protector of last resort and friend for all circumstances at a most difficult time. We now have an increasingly assertive Russia, prepared to use the lever of energy, skilful at dividing and ruling, asserting the old Brezhnev doctrine of spheres of interest and backing it with force if they need to. And we have a rising China. And increasing economic power in the East. If we do not realise that the right reaction of Europe to these new circumstances, is to deepen the integration of our institutions, especially when it comes to defence, foreign affairs and economic policy, then we are fools and the next few decades are going to be much more painful. I know this does not run with the mood of the times only a week or so from European elections. But the hard choice for us Europeans is nevertheless this; to be safer together; or to be poorer apart.

Arguably most important consequence of this new shape to world power is equally dramatic; we are reaching the beginning of the end of the perhaps five century long period of the hegemony of western power, western institutions and western values over world affairs. We are soon going to discover – no, we are already discovering — that, if we want to get things done, such as re-designing the world economic order, or intervening for peace, we cannot any longer just do them within the cosy Atlantic club; we are going to have to find new allies in places we would never previously have thought of. And they will be less congenial and have demands of their own. The recent global financial crisis has made it very plain. If we want a more ordered world at a time of great instability, we are going to have to provide a space at the top tables for nations that do not share our culture, our history, our world view or even our values.

This is an extract of Paddy Ashdown's speech given at the 2009 Guardian Hay festival