Leading Article: Europe offers an opportunity to Mr Blair

THE SHAPE of Europe changed this week in a profound way. The election of Gerhard Schroder - or Gerd, as Tony Blair familiarly referred to him - has shifted the cat's cradle of relationships and forces in the European Union. When Mr Blair was elected last year there was a little too much vainglorious talk about how he was assuming the mantle of leadership in Europe. This was always improbable, given Britain's exclusion from the single currency, and the idea of New Labour as a model for sister parties of the centre left owed more to awe at the scale of Mr Blair's electoral victory than to an understanding of the still-indistinct ideology behind it.

Nevertheless, Mr Schroder's election does provide an opportunity for our Prime Minister to move a little closer to the central networks of power in the EU. And, while the dominance of centre-left parties in the governments of EU countries is temporary and fortuitous rather than evidence of some great tide in the history of ideas, it opens the possibility of moving Europe on beyond the fixed assumptions of the past.

Can Britain lead in Europe? That is the question asked in its latest publication by the Centre for European Reform, the think-tank set up with discreet encouragement from Mr Blair, with good connections in the Foreign Office and with funding from the same companies that will provide the core of the Yes campaign in the single currency referendum. Unsurprisingly, the question is answered in the affirmative. And it is true that Britain now has a better chance of influencing the future shape of the Union than at any time since it joined, a quarter of a century ago. However, Mr Blair should keep his ambitions within bounds. Germany will remain the dominant force within the EU, and it was significant that Tony's mate Gerd had nipped over to Paris to see his other friends, Jacques and Lionel, before coming to see him.

Three changes are already written into the forecast for the next decade, but they will require reform of EU structures. First, the EU will get bigger, expanding to the east. Second, almost all of the enlarged EU, including Britain, will have the single currency. And, third, there will be a "European army", which is shorthand for the EU members of Nato coming together to deploy their forces to back up a common security policy - the need for which has been exposed by the tragedy of Kosovo.

Reform of the EU will happen anyway, especially under the strains of enlargement, as informal and ad hoc devices are used to overcome institutional paralysis. How much better if it could happen in a purposeful way that gave some meaning to the rhetoric of a people's Europe. That is made more possible by the arrival of an SPD-Green government in Germany, rather than a grand coalition of the social and Christian democrats. But, so far, Mr Blair's attempt to lead the debate has been half-hearted. The Foreign Secretary has floated the idea of an Upper House of the European Parliament made up of national MPs; while the Chancellor's adviser has tried to put pressure from outside on the European Central Bank to adopt open and accountable procedures rather than the secretive practices of the German Bundesbank. These are important contributions, which develop the right theme of democratic accountability, but do not yet add up to a programme likely to gain momentum.

The precondition of Britain's leadership of that project is Mr Blair's advocacy of joining monetary union, something he is always edging towards and never quite doing. But the substance has to be a sustained campaign to open up the workings of the European Commission, which is an unpopular, remote and confusing bureaucracy. There should be stronger scrutiny by national parliaments, but that will only deliver if MPs see such work as a passport to promotion.

There is an immediate and practical obstacle to the House of Commons taking European legislation seriously, and that is the tension between Gordon Brown, responsible for the euro, and Robin Cook, in charge of everything else, not to mention the fact that the minister for Europe, Joyce Quin, has only just returned to this brief, which she held in opposition, in the July reshuffle.

More needs to be done in the long run. The workings of the EU ought to be part of civic education in schools. We liked the idea advanced by Jacques Delors that the Commission President should be directly elected at the same time as European Parliament elections. The centre-left and centre- right groupings in the parliament could each nominate a candidate, whose election would inject much-needed democratic discipline from the second- largest electorate in the world.

We need many more ideas like this, and the pragmatic ideological magpies of Downing Street should be rounding up more of them if Mr Blair is serious about joining Europe's Franco-German leadership.