When Helmut Schmidt was elected German chancellor on 16 May 1974, the scene seemed set for a new phase in the British–German relationship. By the early 1970s, both countries had come to develop largely compatible goals in their security and defence policies, and Britain’s belated entry into the EC had removed a further long-standing obstacle against greater bilateral cooperation. The long-envisioned tripartite leadership of Western Europe by Britain, France and West Germany finally seemed within sight – an impression Schmidt himself was keen to encourage. ‘All three countries had an essential voice in Community affairs’, he told British Prime Minister Harold Wilson in June 1974, and ‘it was the three Governments concerned who really mattered’.1 Within two years, however, the situation looked very different indeed: Schmidt’s FRG was at the heart of a revived EC with a revitalized Franco–German axis at its centre, while Britain was wrestling with severe domestic difficulties on the side-lines. It was a shift in trilateral power dynamics that extended far beyond intra-EC politics: whereas France and Germany increasingly took the lead in shaping a united West European position within the wider transatlantic alliance, Britain seemed marginalised over key issues of macroeconomic policy or energy.