Blair and Schroder stand united against colleagues and other foes

Schroder and Blair are united by a lack of instinctive love for the single currency
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The Independent Culture
GERHARD SCHRoDER spoke fluent Tony Blairese on his first visit as German Chancellor to London. The British Prime Minister looked on, hands folded as a headmaster might, while listening to the speech of a gifted, if still inexperienced pupil.

All leaders change their political character subtly when they go abroad, but observers of Herr Schroder's appearances here will have noticed that his modest appetite for reform at home becomes a raging hunger whenever he passes through London.

"No one has any intention of questioning the independence of the Bundesbank," said Herr Schroder, the week after his powerful finance minister, Oskar Lafontaine, had done precisely that, and only two days after he had himself leant heavily on the Bundesbank to drop interest rates and had criticised the Bank's anti-inflationary zeal as inimical to growth.

Mr Blair called his guest "Gert", which is not his name, and everyone in the Blair entourage missed the umlaut off the pronunciation of Herr Schroder's name, as if to underline that the days when No 10 consulted diplomats about the niceties of receiving foreign guests have been superseded by careless informality.

But the sturdy Anglo-German relationship, tested to destruction by those star-crossed enemies, Margaret Thatcher and Helmut Kohl, has been reborn, and that can only be good. As long as Herr Kohl remained in power, it was impossible to shake off the taint of Britain's foolhardy opposition to unification. That ghost of failure and resentment has now been exorcised.

Herr Schroder and Mr Blair meanwhile are united by a lack of instinctive love for the single currency and by the conclusion that they must nevertheless press ahead with it. The German Chancellor supports it because, as he said recently in his election campaign, EMU is "a done deal" and there is "no way back". Even when pressing Britain to join up, his language on the matter is sober to the point of tepidity. You cannot entirely escape the impression that he is leaving himself room to blame his predecessor if it all goes wrong.

The new leader in Bonn is a worried man. The PR system in Germany means that he lacks Mr Blair's free hand. His authority is diluted by the presence of Green Party coalition partners who are likely to get more combustible as time passes.

The insistence on Britain's early entry to EMU is his polite way of saying that Germany would rather not be left alone in this adventure with a key partner, dubbed by Adenauer, "the more or less hysterical French" and the more or less unreliable Italians, whose tendency to amass debt and appoint dodgy governments does not augur well for budgetry control in Euroland.

Herr Schroder needs a tough European coalition partner in EMU in order to prevent the dangerous (for Germany) slide of the single currency into a redistributive project. He has no interest in bailing out weaker economies in the regional recessions likely to result from giving control of the Continent's interest rates to a bunch of inflation nutters on speed.

So something new is being put in place of the old tension between London and Bonn: an alliance which dare not speak its name. The affinity between Mr Blair and Herr Schroder is a bond between two men who have found themselves stuck in a Europe of a previous generation's fears and dreams. They know that this will not suffice for a stable and prosperous future. They also know that reforming it is a back-breaking task.

Mr Blair is supporting the single currency, despite his own reservations, because he believes that Britain would be marginalised if it does not take part. This week's "not if but when" pledge is wholly at odds with the previously stated view that the Government would apply strict compatibility tests to see whether EMU is in our national interest. Like Cecily Cardew precipitously embracing Gwendolen Fairfax, in The Importance of Being Earnest, the Government suddenly knows, without having met the single currency, that it is going to be the best of friends with it.

Both leaders share an approach to politics that is akin to guerrilla warfare - they specialise in quick, tactical thrusts. Both triumphed over their respective rivals, Gordon Brown and Oskar Lafontaine, by being nimbler in their ideological footwork and better able to represent the post-ideological context of centre-left politics in the wake of the Cold War.

Neither of them is given to the architectonic system-building that lies at the heart of the EU we have today. Both of them are most obviously at ease when speaking of the potential for reform in the European project. Kicking it into shape, not savouring its contours, is likely to be their main pastime.

It would be extraordinary if this new Anglo-German attraction, headed by two ambitious men intent on staying in power for some time, did not produce some changes in the moribund and wasteful institutions of Europe. The excuses for failing to reform the Common Agricultural Policy have now run out.

A more rigorous approach to European institutions would have intriguing consequences for the Franco-German relationship, which has so far been the motor of EMU. It is the founder-member status of France which leads to the most shamefully wasteful symbol of all - the European Parliament alternating between Brussels and Strasbourg, solely to satisfy French amour propre.

Herr Schroder was duty bound to say that he does not believe in "geometric constructions", yet the whole of European diplomacy is obsessed, for good reason, by the precise proportions of the triangle of relations between France, Germany and Great Britain and it will continue to be so after the launch of the single currency. This triangle is eternal, and Germany, for historical and geopolitical reasons, is the apex.

Of course, Britain cannot replace France in Germany's priorities, as a new mistress might oust an old. The Franco-German alliance is a far more durable relationship than that. But Mr Blair will also find that the new German elite is far more open to British ideas and more heedful of British reservations than the old one.

Already, we sense a rather practical rapport between Mr Blair and Herr Schroder in the decision to appoint their proteges, Peter Mandelson and Bodo Hombach, to harmonise ideologies. The main point of this alliance is to stave off an alternative intellectual bond between Herr Lafontaine and Mr Brown.

Our own Chancellor and the German Finance Minister both believe that they ought to lead their parties. Both men are more conventionally left- wing than their leaders in their visions of Europe. Both are waiting for their bosses to slip up. This is one Anglo-German relationship that neither Mr Blair nor Herr Schroder intends to encourage beyond the bounds of strict propriety.