An axis of pragmatists

Mark Wood says that David Cameron would do well to ally himself with Germany’s Chancellor — Angela Merkel is a conservative realist in the Thatcher mould

A new government sweeps into power and orders £20 billion of tax cuts. Fundamental tax reform to follow. Unashamedly pro-business policies are given top priority, cushioned by comforting, voter-friendly commitments to maintaining public services.

Sound like the Tories already in office in some parallel universe? Not quite. It is Angela Merkel’s new centre-right coalition in Germany. After ferocious policy wrangles, Merkel’s Free Democrat allies have started getting their way on issues such as tax and regulation, so much so that their policy agenda looks more nouvelle-Thatcher than anything the Tories would dare put in a manifesto. Indeed, the FDP’s avowal that income tax cuts are the most effective way to generate and sustain growth is enough to make many Conservatives swoon.

Yet close aides to both Merkel and the Free Democrat leader, Guido Westerwelle, are saying quietly that when they look around them at the top table of major governments they don’t see many like-minded friends. The Berlin duo would be keen on an unshowy but effective partnership with an incoming UK government on everything from global economic agendas to managing the European Union. Cameron, George Osborne and William Hague would do well to read their signals — and seize the opportunity to increase the UK’s leverage and influence without compromising any of their Eurosceptic principles.

In the making is nothing less than a new Euro line-up — an axis of the pragmatic. That could also include Spain’s José Luis Zapatero, now working away doggedly to bring down the country’s budget deficit and disinterested by glitzy pan-European initiatives. Another partner could be booming Poland, now ruled by a government that is keen to get stuff done without needing flashbulb-fest international summits to make sensible decisions.

In Berlin, Merkel’s government wants to encourage free trade and keep the Eurocrats at bay. A new Tory government will want the same. In Berlin there are now several ministers who could sit comfortably in a Conservative Cabinet, not something you would say of many Teutonic administrations over the past 20 to 30 years. Chief among them is Westerwelle himself, who turned his erstwhile wishy-washy liberals into fearless champions of business interests and secured their highest ever vote in last autumn’s election.

Cameron will need to think about how he actually gets his way on Europe. A sulky isolationism will get him nowhere and he knows it. A new Tory government won’t be short of gushing friends at first — you can bet that President Sarkozy will be all over them. But there is not much of a common agenda there to keep the passions alive, and the well-being of the UK’s biggest tax generator, the financial sector, is not high on Sarko’s agenda. Those close to Merkel say that she is deeply allergic to government by showy initiative à la Sarkozy and Gordon Brown, and is privately delighted that there could soon be something of a soulmate in Downing Street. Together, Germany and the UK could get their way on a whole range of EU issues and be a force for consensus and realism in global forums such as the G20.

The timing is perfect. The Germans want allies with whom they can confide and trust. They will never do anything to undermine the Franco-German partnership, which they see as the rock on which European peace is built. But Merkel has a famously standoffish relationship with Sarkozy, whom she regards as skittish and nostalgic for the days when the French decided Euro foreign policy. Italy’s Berlusconi is considered beyond the pale, and it is an open secret that nobody in German politics can stand Brown. Years of his arrogant lecturing of European governments on economics and his open disdain for other ministers at Euro gatherings have left an indelible impression — and a host of enemies.

Another relationship that is not working, surprisingly, is Merkel and President Obama. The chemistry just isn’t there. The Chancellor’s circle say she is irritated that he refuses to listen to the reasons why the Germans find it so emotionally difficult to fight in places like Afghanistan. This scenario might present a wonderful opportunity for a Cameron government to establish a low-key and effective partnership that could last for years.

So what, Eurosceptic Tories will say. Germany is a federalist, Euro-fanatical country with an in-built dedication to nurturing the kind of EU institutions most Britons abhor. That charge bears closer scrutiny. The traditional assumption that Germans yearn to create one big Euro-family is not supported by the evidence. Germany has frontiers with nine countries, yet you would struggle to find any coverage of them in the German media. German foreign news comes from London, Paris, Washington and Beijing. Germany’s Supreme Court has challenged the further transfer of powers to Brussels and politicians of all hues are voicing growing scepticism about the way Europe works.

Merkel, moreover, has demonstrated an iron determination to run Germany the way she wants — a source of friction with the barons who run the German Länder. Her quiet but forceful path to power included her cold-blooded dispatching of her friend and mentor, Helmut Kohl. She is not one to cede power to anyone, whether in Düsseldorf or Brussels.

The fact is that the British have been consistently poor at reading the modern Germans, often embarrassingly so. It puzzles Germans, who in many ways modelled their postwar society on values they admired in their Anglo-Saxon cousins, and wonder why the Brits don’t seem to notice.

The 20th anniversary of the fall of the Berlin Wall was replete with revelations of how Margaret Thatcher opposed German reunification more vehemently than any one else, even accusing the lumbering and ever-genial Kohl of crazed megalomania. That grates. Not least because the last 20 years have proved her so wrong — the new Germany has not tried to throw its weight about and remains almost nerdishly determined to be inoffensive to everyone.

This German meekness in international relations is often misread as Europhilia. Germans have learned from their grisly history that cordiality towards the neighbours is the best way to prevent lethal misunderstandings. Now add to that the problem of national identity. Generation after generation of young Germans grow up wide-eyed with horror at the historical legacy their murderous forefathers bequeathed them. Standing tall and proud as a German is pretty hard with that around your neck. It is easier to be a European.

But national identity and national interests are different things. The Merkel-Westerwelle government has a stake in forging a dynamic, lower-tax, smaller-state modern Germany. They want a pragmatic, sensible and constrained EU that lets them get on with the job (hence Merkel’s preference for the harmless Herman Van Rompuy as EU President rather than the traffic-stopping Tony Blair, whom she vetoed). A Cameron government should have the same agenda.

People close to the Chancellor say Merkel’s much publicised irritation with the Tories for quitting the European People’s party will not get in the way of a new entente once Cameron has the keys to 10 Downing Street. But the Tories need to start seeing the new German government for what it is for that to happen.

Maybe the bigger barrier to that is the inexhaustible British fascination with Nazis and the war. Go to Waterstone’s on Piccadilly and visit the German History section and you will find five whole shelves of books. Every single one of them deals with the 12 years of German history stamped with Hitler’s name. The couple of thousand years before the Nazis and the 65 since do not merit a single volum e. Britons, still mainly pragmatic Saxons in instinct and language, have a lot more in common with their Germanic cousins than they think. There are smart conservative pragmatists running Germany now. And there will likely soon be smart pragmatists running the UK. They would do well to make common cause, for the UK and for Europe.

Mark Wood is a former editor-in-chief of Reuters and CEO of ITN.