The German Blair emerges

To be or not to be Blairite has been the central question of dogma for the last two years

THERE WILL be a little ceremony tomorrow at Downing Street, to mark the relaunch of the biggest left-wing party in Europe. "New Labour" will cast its blessings upon Germany's "New Centre", as Chancellor Gerhard Schroder attempts to outsmile Tony Blair in front of the cameras.

It is fitting that Mr Schroder should be visiting London first, so soon after the cataclysmic events of the last few days. Five months in government have been wasted, but Germany will now witness a "new beginning", the spinmeisters assure us. Rid at last of Oskar Lafontaine, the German Chancellor is free to fulfil his destiny.

The "New Centre" hymn sheets are quite specific on where this destiny lies. To be or not to be Blairite has been the central question of dogma for the last two years, and one that defined the gap between the party's two most powerful leaders. "I am tired of hearing that man's name," Mr Lafontaine would snap whenever his views were solicited on Britain's Prime Minister during last year's election campaign. Only modesty prevented Mr Schroder declaring himself "the German Blair", but he did not protest when his friends in the media stamped that label on him.

Whether such claims were exaggerated, we shall soon find out. With the exception of a few suitably terrified Greens, Mr Schroder now has the cabinet of his choice. Hans Eichel, Mr Lafontaine's successor as Finance Minister, is already swotting up on the briefs doled out by the chancellery. There will no longer be bust-ups with the party chairman, because the Chancellor will now double up in that role. Not since the first years of the Willy Brandt era has a Social Democrat leader enjoyed so much power.

Enjoy, he certain will. Mr Schroder's taste for the trappings of office, and his skill in augmenting his influence, are legendary. This is, after all, the man who had entered the Social Democrats' youth wing as a self- proclaimed Marxist, proceeded to play the left off against the right, and emerged as the leader of a united organisation dedicated to serving him alone.

He performed the same trick as Prime Minister of his native Lower Saxony earlier in this decade. He had formed a coalition with the Greens, and cut them to shreds. In the following elections, the Greens crashed out of the regional parliament, and Mr Schroder, with the votes he had stolen from his erstwhile coalition partners, was able to govern alone.

And now he has done it again, by helping Mr Lafontaine bring discredit to himself and then stabbing him at the most vulnerable moment. The leaks, suggesting that the Chancellor was threatening to resign because of the incompetence of his Finance Minister, were a nice touch. In less than five months, Mr Schroder had turned "Europe's Most Dangerous Man" into a pussycat.

The rest of the task, though, will not be easy. The Social Democrat party, a proud, venerable movement, is to be turned into a vehicle for the "New Centre". Mr Schroder wants to reform its structure, from the grassroots up to the presidium. Critics say that, at the end of its transformation, it will be no more than a club.

This is where the Blairite experience is the most valuable. Bodo Hombach, the trusted Chancellery Minister, has been picking Peter Mandelson's brain for years. Last September's election campaign had been closely modelled on Millbank's battle plans, down to parroting slogans, such as "tough on crime, tough on the causes of crime".

The party, though, had been left well alone. That was Mr Lafontaine's fiefdom. Whenever Mr Schroder addressed the "comrades", he was careful to confine his speeches to traditional vocabulary. He spoke a lot about "social justice" and "opportunities", and never of the "trampoline" of the social welfare net which should be propelling the unemployed back into the job market. That message only went out to more heterogeneous rallies.

The dichotomy was the best-kept secret of his successful election campaign. It was "Oskar's" job to rouse the party faithful into a frenzy with attacks on speculators, coupon-clippers and other assorted class enemies. Mr Schroder took care of the rest, cajoling disillusioned conservative voters with promises of making Germany safe again for business.

The double act is over, and since Mr Schroder sees no future in selling the SPD programme to ordinary voters, it is the party that will have to fall in line. This is, of course, not the best moment to spring such a reform on Social Democrats. Unlike Mr Blair, the German Chancellor lacks the luxury of time in cozy opposition. Ever since the last Social Democrat Chancellor, Helmut Schmidt, was destroyed by his own party, no one has dared to try anything new. The rank and file do not like innovators, as they have shown Mr Schroder repeatedly, whenever he came up for election to the national presidium.

But with Mr Lafontaine gone, the left is utterly demoralised: "like stragglers deserted by the flock," was how one leading light summed up their sense of desolation.

And the reforms do not have to be as radical as those inflicted by "New Labour". Some of the tenets that Mr Blair had to purge, notably on nationalisation and union power, were discarded by German Social Democrats as far back as 1959. There are no rotten boroughs on Germany's red map, and no "loony left", especially now that Mr Lafontaine is out of the picture.

Mr Schroder's task is to confront members with economic reality. "You cannot go against the economy," he told the Finance Minister at last week's acrimonious cabinet meeting. Mr Lafontaine accepted that and left.

So, will Mr Schroder now swim with the economy, give business all the tax breaks it is asking for, and reverse the trend of rising unemployment? That is, after all, the electoral mandate he cites in arguments with his less voter-friendly colleagues. Maybe.

Mr Lafontaine's tax reforms, universally denounced as a dud, will go through the upper house of parliament this week. No, they will not be scrapped. Mr Schroder has talked "adjustments" when the second phase is unveiled later this year.

Tinkering, of course, will not do, as Mr Schroder himself might have told any number of election rallies last year. There had been too much pussyfooting in Germany during the long Kohl era. What the country needed, he would add, was little short of a revolution. Not until the cost of German labour is radically reduced will Germany regain its competitiveness.

But Mr Schroder is no revolutionary, not even a radical. He is the most German of leaders, for ever seeking consensus and negotiating compromises that take the edge off any upheaval. It is against his instincts to go against vested interests or voter sentiments. In other words, he is a pragmatic politician. Or an opportunist, if you happen to disapprove.

His years as Prime Minister of Lower Saxony are instructive. He was good to the region's biggest employer, Volkswagen, and good to the unions. Both profited from his consummate deal-making. But his home region still did not prosper. His legacy is middling levels of unemployment, economic output, and mediocrity according to just about every other index. Nothing to shout about, but enough to keep getting him re-elected, with an increased share of votes every time.

Now this politician, who has turned the attainment of the average into a credo, is running Europe's biggest economy. Already, he is wobbling on policies ranging from tax cuts to the reform of the citizenship laws. And still, he is popular because all the shambles, as the voters are convinced, were somebody else's fault.

But the game of hide-and-seek is up. The bogeyman is gone, the cup of excuses run dry. This will have to be New Centre's last relaunch.