Blair must ditch his friend in Germany

`Today, Chancellor Schroder is something of an embarrassing relation to the cause of the progressive centre'

GERMANY'S CHANCELLOR Gerhard Schroder has suffered regional election defeats in the last few weeks with terrifying consistency. This is not the fate Tony Blair expects to befall his chosen allies on the international stage. It is not that Mr Blair is a fair-weather friend. He stood by President Bill Clinton throughout the impeachment proceedings, but that was because he sensed, rightly, that President Clinton would win his battle for public sympathy against Kenneth Starr and the moral crusaders.

Mr Schroder, on the other hand, is in a very deep hole. He built his election campaign on the New Labour model, right down to the pledge cards and the studied vagueness on policy detail. "Debating him is like trying to nail a pudding to the wall," the incumbent Chancellor Helmut Kohl groused at the time. When Mr Schroder ousted the spent giant of unification as German leader a year ago, Mr Blair promptly adopted him as a special ally, realising that a rejuvenated Anglo-German alliance could prove the Government's pro-European credentials while staving off a commitment on the single currency.

Today, the Germans are something of an embarrassing relation to the cause of the "progressive centre". When Gordon Brown met his opposite number, the German finance minister Hans Eichel, on Monday, the stolid Mr Eichel put a brave face on the Social Democrats' latest poll slump to 11 per cent in Saxony. Mr Eichel made out that the results were merely temporary difficulties. "I'm sure you will succeed," Mr Brown murmured, while not sounding very convinced about it.

Recent British governments have a poor history of assessing German governments wisely. Perhaps it is the remnants of post-war hauteur towards a defeated enemy. Or maybe it's an assumption, rooted in our belonging to the same family of languages and cultures, that we understand Germans and Germany better than we actually do, that's to blame - coupled with a lack of familiarity in political elites within that country.

Our politicians love getting to know France, Italy and the United States. I can count on one hand the number who really or know anything about Germany that wasn't fed to them in a briefing pack.

Lady Thatcher fatally under-rated Chancellor Kohl and over-estimated the strength of her special relationship with Washington, which she hoped would back her in blocking speedy German unification. She was left brutally sidelined when the then President George Bush supported a rapid merger of East and West Germany.

Mr Blair has made the opposite error of over-estimating the present German Chancellor. Like Gwendolin Fairfax and Cecily Cardew in The Importance of Being Earnest, the two had decided to be bosom friends before they had ever met. Indeed, I gather Mr Schroder was deemed something of a disappointment when he first visited Downing Street. The Blair team had built him up in their imaginations as a copy of shiny, happy Tony and were a bit put out to meet an edgy man with dyed hair who was still coming to terms with power.

Mr Blair is fortunate in enjoying optimum economic and labour market conditions in which to lay out his vision of how Britain must change. Mr Schroder is baling out a leaking boat and does not have the luxury of time to expound a grand vision of what broader benefits reforms will bring. He should have come to office better prepared for this situation and worked harder, as Mr Blair did, at finding a new language in which to communicate his intentions to voters, rather than the tired old cliches of "socially balanced budget cuts" and "austerity package". But he did not.

Mr Blair has no real challengers for power. The nearest he comes to a rough ride is the TUC giving his prose and poetry a lukewarm reception in Brighton, or a few unhappy delegates parading their disillusion when Labour gathers for its conference in Bournemouth next week. He will tell them, as he always does, that things have changed, Labour has changed, the world had changed and that they'd better get used to it. The voters will see a sovereign figure at the helm and that will be that for another year.

Mr Schroder, on the other hand, is trapped in a highly combustible coalition with the Greens, a political organisation not noted for its consistency or self-discipline. The gone-but-not-forgotten finance minister Oskar Lafontaine is about to delight Schroder critics with a book mawkishly entitled The Heart Beats on the Left.

One of the more hubristic assertions of Labour modernisers in the past two years has been that the centre-left is now in control in so many of the main European countries that they can bank on the continuation of a pan-European progressive centre. But governments are not elected by job lot: they are chosen one at a time according to varying national circumstances. Germany will not retain a majority centre-left government unless Mr Schroder succeeds in substantially bringing down unemployment, in both the old East (where it stands officially at 19 per cent, even with generous job-creation schemes) and the West where it is 10 per cent.

This is almost certainly a peak: but it is highly uncertain whether the jobless figures will fall fast enough to save the SPD's neck. It was a mistake of wishful thinking by New Labour to assume that the German Social Democrats were at the same stage of development and could thus help forge a common Third Way. They are not. To put it crudely, Labour modernisers have come to understand that what really matters is whether the voters prefer political Daz to Persil and to ensure that the product on offer remains as close to the voter/consumer's ideas of what constitutes sound governance while combining social liberalism with economic rigor.

That is what Philip Gould means when he defends the use of focus groups and polling to shape the Government's policies. The SPD, even in its upper echelons, has not accepted this analysis. It wants to retain the certainties and holy touchstones of Social Democracy circa 1970. It may wear sober Boss suits, but its heart still wears flares. As such, it is capable of holding back its own leader and restricting his choices to an extent Mr Blair would find intolerable: indeed, it might also remind him of the way things might have been if he had come to power with an unreformed Labour Party at his back.

The historical joke of all this is that in the most significant matter - that of the single European currency - Britain's future may well depend on Germany. An failing German economy will weaken the attraction of the euro and make British entry into monetary union a far more difficult proposition to sell, however many hoary Tory grandees Mr Blair manages to summon to the hustings. The Tories will surely respond to a continuation of Mr Schroder's troubles by linking public worries about the euro with a broad attack on the whole notion of Blairite centre-left politics. It is a non sequitur, of course. They are separate matters and should remain so since views on the single currency lie outside the usual political divides.

But Mr Blair, might take the precaution of cooling the intensity of New Labour alignment with German Social Democracy. The least welcome bedfellow of any politician is failure, even by association.