Angela Merkel is David Cameron's new best friend for ever

Beyond her general competence, most British people know very little of the German Chancellor

Angela Merkel and David Cameron promenade in Meseberg in April (Getty)

This week I thought I would write about the most powerful woman in British politics. No, not Theresa May, who was diminished by her response to the Woolwich murder. She seemed to be play-acting, rather badly, the role of Leader in a Crisis.

No, I mean Angela Merkel. This week she was named the world's most powerful woman by Forbes magazine for the third year running. She is certainly the most powerful woman in the European Union. All decisions on climate-change policy in this country and in the rest of the EU are on hold until the German elections in September: nothing can be decided until Merkel commits herself – assuming she wins, as the opinion polls suggest she will. She is particularly important in the UK because she will decide what the great European question that divides British politics is actually about. If she is re-elected, her term will run until 2017, which is when there may be a referendum here. If there is, it might as well be on the question: Are we for Merkel or against her?

I have written before about how David Cameron thinks that his alliance with Merkel is his way through the European problem. He thinks she understands British Euroscepticism – having met some of John Gummer's constituents when, as environment minister in the 1990s, he was her opposite number. Cameron has been known to declare: "Thank goodness for the people of Suffolk Coastal!" And he thinks that she wants to keep Britain in the EU as a counterbalance to the ragged south.

It may seem surprising, given her importance, how little we know about her. Most British people, I suspect, gain a general impression of competence but little more, and no strong ideology. Partly, though, this reflects her style, which is cautious, unshowy and consensual. I offer two vignettes. One is a conversation she had with Cameron before he delivered the speech in January promising a referendum. I am told that, far from expressing the common German reaction, which is that we British have taken leave of our senses, she said mildly: "I don't understand why you have boxed yourself in."

The other was her appearance in Leipzig last week. She was sitting in the front row at the celebration of the 150th anniversary of the Social Democratic Party, her main opposition. It was as if William Hague had attended the 100th anniversary of the founding of the Labour Representation Committee in 2000. We know they do politics differently in Germany, but she epitomises that bipartisanship. For her first four-year term as chancellor, after all, she led a "grand coalition" that included the Social Democrats.

This is a kind of politics that Cameron understands. He may not be a good leader of the Conservative Party. He often misjudges it, and it distrusts him. But he is a good leader of the country. His response to the Woolwich horror, for example, was calm, reassuring and unifying. Like Merkel, he is comfortable leading a coalition, and, one suspects, would be just as comfortable leading a "national" government of all the parties.

The Leipzig birthday party was notable for another reason. François Hollande, the French socialist president, addressed the gathering. It was the speech of a leader undergoing a conversion known as Mitterrandisation. Just as the other François, Mitterrand, was elected to the presidency on an old-left programme in 1981 and was forced to adjust to harsh economic constraints, so is he. "You cannot build anything solid if you ignore reality," said Hollande. If that were too cryptic, he elaborated a message that was pure Tony Blair: "Realism does not mean renouncing ideals, but is one of the surest means of attaining them." And if that were too abstract, he praised the "courageous" labour market reforms introduced by Gerhard Schröder, Merkel's Social Democrat predecessor. The changes pushed through in 2003 cut social security benefits and made it easier to hire and fire workers. What's more, they split the Social Democrats, who have not recovered since, and whose chancellor-candidate, Peer Steinbrück, has a popularity rating of 27 per cent, compared with 60 per cent for Merkel.

Ed Miliband, who once held up Hollande as an inspiration to the anti-austerity, pan-European left, was supposed to be at the Leipzig celebrations, but returned to London because of the Woolwich murder and was thus spared the embarrassment of the Great Hollande Moving Right Show.

Cameron, meanwhile, cut short his trip to Paris, where he too had been due to meet Hollande the day before. He sees that Hollande, now that he is moving away from posing as the socialist leader of southern Europe, is someone else with whom he can do business.

I'm not saying that the Cameron plan to reform Europe will succeed. But with Merkel and Hollande in favourable alignment and with Mario Draghi, the president of the European Central Bank saying in London on Thursday, "the UK needs a more British Europe", things are going his way more than might be expected.

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