Europe's Go-To Guy; Only a Year Ago, Gerhard Schroder Was on the Ropes, Unpopular at Home and Unwelcome in Washington. Now Look at Him

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Byline: Stryker McGuire (With Marie Valla in London, Eve Conant and Richard Wolffe in Washington, Frank Brown in Moscow and Corinna Emundts in Berlin)

Could this be Gerhard Schroder's moment? A year ago politicians and diplomats everywhere were writing off the German chancellor as a failure. His economic reforms were going nowhere, German voters were slapping down his Social Democratic Party at every opportunity, Berlin was in Washington's bad graces over Iraq and an upstart band of reform-minded countries, led by Britain, were eroding Germany's dominance (with France) of the European Union.

And yet today the "curmudgeon chancellor," as he used to be known, is all smiles. His poll numbers are up. His economic reforms are finally biting. His statesmanlike interventions with Russian President Vladimir Putin over Ukraine and Chechnya have earned him respect from other world leaders. Even U.S. President George W. Bush--whose secretary of State-designate, Condoleezza Rice, once accused the Schroder government of "poisoning" U.S.-German relations--is warming to the chancellor and will meet tete-a-tete with him in Germany next month on a fence-mending trip to Europe. "Suddenly," says one senior British official, "Schroder is, as they say, the man to see."

Schroder's resurrection speaks to more than the fickle fortunes of one German politician. It's really about leadership in Europe. Tony Blair is damaged goods, thanks to his too-close relationship to Washington. Jacques Chirac is compromised for the opposite reason. Who, then, to play point man in tackling the daunting challenges of the coming year? If Bush and Schroder can put aside their differences over Iraq, there's a chance transatlantic ties can be rebuilt. At a time when Russia is waxing autocratic, Ukraine is wobbling and the EU is expanding, both Europe and the United States can look to Schroder as a bridge between East and West. With frictions building over everything from Iran to international trade, who better than Schroder to play the go-between?

What a transformation. When Schroder came to power in 1998, he joined a new generation of center-left leaders, including Tony Blair in Britain and Lionel Jospin in France, as the fresh, market-oriented face of modern European socialism. Most have since fallen to center-right challengers, as Schroder nearly did himself. Years of economic stagnation, record unemployment and fumbled reforms produced one regional election defeat after another. Then came last June's European parliamentary elections, when Schroder's SPD won a mere 21.5 percent of the German vote.

Yet he stuck to his guns. Without his government's reforms, Schroder told his countrymen, Germany's welfare state was "headed toward ruin." Ever since, his poll numbers have been nudging upward. "Herr Schroder has finally found his role: firmness," opined the German newsweekly Der Spiegel.

Nothing has buoyed Schroder more than his recent triumph in Ukraine. Scarcely a month ago, East and West seemed to be colliding. Serious foreign-policy types talked unabashedly about the prospect of a new cold war. Russian President Vladimir Putin had intervened in a rigged presidential election, publicly backing the thuggish handpicked successor to Ukraine's outgoing strongman, Leonid Kuchma, against the legitimate winner, Viktor Yushchenko. The threat of bloodshed loomed. To all in the West who criticized him, Putin showed the back of his hand, muttering darkly about a U.S.-European conspiracy to contain Russia and destroy its influence. …