They both wanted the "third way," a mixture of social democratic principles with a health dash of more liberal economic policies. Not extremely to the left, not way on the right, but somewhere closer to the middle.

Just after his election, Schröder talked about closer cooperation with his British counterpart and in 1999, the so-called Schröder-Blair Paper was the result. It was a manifest for a modern social democracy in these modern, globalized times.

Now that paper has disappeared, likely in some archivist's drawer, and the two men are not only no longer on the same page, they aren't even on the same chapter. That's why in Berlin, there is a good dose of scepticism as Britain takes over the six-month rotating EU presidency, and attempts to impose its own stamp on the European project.

"I'm sad" were the words from Schröder after the failed EU summit in June. But besides expressing his emotions, the German leader left no doubt about who he held responsible for the failure, the British prime minister. Whoever wants to destroy the EU due to national obstinacy or populist motives sins against future generations, Schröder spewed in the mass-circulation Bild newspaper shortly after the summit.

No doubt

He didn't name names, but it was clear who the message was for. Even before the summit, Schröder fulminated against the rebate Britain gets from the EU in front of parliament.

"There is no longer any justification for this rebate, since Great Britain is in 6th place as regards per capita income, but far below that in pro capital payments to the EU," he said.

Schröder didn't seriously speculate that the British would do away with their beloved rebate during their six months at the helm. Still, sooner or later there has to be an agreement about the EU's 2007 - 2013 budget, including the sensitive issue of agricultural subsidies, which are as dear to France as the rebate is to the UK.

"If there is a compromise during the British presidency, and we can only hope there will be one, then it will have to be very close to that which [Luxembourg's Prime Minister Jean-Claude] Juncker proposed at the summit," Schröder said, referring to a last-minute offer by Juncker that failed in the end. "We can only hope."

Differing visions

Schröder is no more excited about what he considers Blair's vision for the EU as he is about he considers the British leader's budgetary obstinacy. For Schöder, the EU is not just a common market, it is a success social model that has slowly risen from the ruins of World War Two.

In his speech before the European Parliament, Blair however rejected that accusation, saying he believed in the European project.

"I must note that Blair made it obvious that he is for a political union," Schröder said. "The expectation that goes along with that and which the presidency must work under, that will be the deciding factor."

The Germans have another expectation of the British EU presidency. Despite the "no" votes during the referendums on the EU constitution in France and the Netherlands, and the decision of EU leaders to take some time for reflection, the constitution should not be put on hold.

"Reflection for me does not mean retreat nor is it another word for doing nothing," said German Foreign Minister Joschka Fischer. "We can't afford any down time, neither internally nor externally, but we have to keep the process alive."

It with more than a little suspicion that the German government watches the Britons take the EU reigns. But at the same time, Berlin says it is ready to take an active role in solving some of the EU's pressing problems. That's likely the reason that despite the strong differences of opinion, Schröder is keeping any personal criticism of Blair to himself.

"I have no intention of letting a serious, sensible discussion of facts degenerate into a personal controversy," he said to reporters. "So forget it."