Mark Wood

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

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.

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