Mary Dejevsky: Does Blair really want Merkel to win the election?

The unspoken truth is that what's good for Germany may not be so good for Britain

Three years ago, Tony Blair did his bit to help the German Chancellor, Gerhard Schröder, granting a lengthy interview to a Berlin paper on the eve of the election that was inevitably interpreted as a gesture of solidarity. The gamble paid off, but only just. The Chancellor was re-elected by a whisker.

This year, Downing Street calculations have been different. For months now, the signals from Downing Street have strongly suggested a warm welcome for Angela Merkel, if her centre-right alliance is elected to lead Germany on Sunday. Ms Merkel was fêted as Germany's leader-in-waiting when she came to London earlier this year, and contacts have continued.

Her prospects of forming a government without a coalition partner now look slimmer than they did, but there are compelling reasons why Downing Street may be happy to see Ms Merkel - especially with a free-market partner such as the FDP - replace him as Chancellor. His fierce hostility to the war in Iraq has set the tone for a "foreign policy for peace" that he has carried over into this campaign. Early hopes in London that Mr Schröder might loosen the German-French alliance or transform it into a troika with Britain have never really been realised either.

At home, too, Mr Schröder has disappointed. He met more resistance as he tried to introduce flexibility into Germany's labour market than he, or Downing Street, may have expected - or, perhaps, his own socialist instincts held him back. Whatever the reason, he has not been the German Blair that the British Blairites hoped for.

Enter Angela Merkel, with her East German upbringing, her dislike of a European super-state and her enthusiasm for the free market way of doing things as pioneered in the former Eastern Bloc countries. Add a dash of conventional Atlanticism and a Thatcherite zeal for sound finances; add an awareness that, for historical reasons, no German leader can lurch too far to the right, and here could be the "third-way" chancellor that Mr Blair has been waiting for.

The trouble is that there is much about a Merkel chancellorship that Downing Street may not like in practice. For a start, the immediate effect of Ms Merkel's proposed reforms could see Germany's economy slowing more, before improving. Nor are Germany's interests in EU budget reform necessarily consonant with Britain's. In Europe, Ms Merkel's empathy with the new EU members and their shared aversion to centralisation may not translate into support for the British view of a looser European Union. Ms Merkel's opposition to Turkey's accession - an opposition increasingly shared by other European politicians - would place her on a collision course with Britain.

The other, vastly underestimated, difficulty is that even if she wanted to move Germany in a more "British" or "Atlanticist" direction, Ms Merkel would face domestic constraints. She has already stated that there would be no question of sending troops to Iraq or to any other US war that Germany could not support. This could limit a German-US rapprochement for as long as George Bush is in power.

Any hopes that the Franco-German alliance would be more accommodating to Britain may also be misplaced. Ms Merkel's tax-cutting instincts, on the other hand, could become a positive threat to Britain's position as king of the European economic castle. Were Germany dramatically to lower taxes, and were consumer spending - and with it, growth - then to rise, Britain would soon find that it had a serious competitor at a time when its own indicators may well be moving in the opposite direction.

All these calculations may explain why the pro-Merkel signals from Downing Street have suddenly gone silent. Or maybe officials have simply begun to doubt that her victory is so certain. The price of miscalling someone else's election is high; relations can be soured for years, as they were after the Major government looked into Bill Clinton's student passport records on behalf of the first President George Bush.

The unspoken truth is that what may be good for Germany may not be so good for Britain. And the best result for Downing Street on Sunday could well be the one that would be worst for Germany: a grand coalition that brings not consensus, but stalemate. This would leave Mr Blair and the British economic model without serious challenge in Europe - and give Whitehall more time to work out what outcome would really be best for Anglo-German relations and for Europe.

m.dejevsky@independent.co.uk