When Tony Blair became prime minister of the United Kingdom in 1997, he took on the great unresolved issues of the second half of the twentieth century and defined a fairly coherent grand strategy to face them. At stake was how to sustain economic prosperity and increase social equality, how to respond to the decay of traditional British national identity and British political institutions, how to develop a new relationship with Europe in which the United Kingdom would play a central and self-confident role, and how to balance ties to Europe and the special relationship with the United States.

Blair's efforts seemed to succeed until the Iraq crisis drove Washington in the opposite direction from Paris and Berlin. The crisis challenged the cornerstone of Tony Blair's grand strategy—that the United Kingdom could act as a bridge across the Atlantic. It damaged the new relationship with France established by Blair in 1998. It raised questions about the wisdom of the special relationship with the United States. And it even threatened the survival of Blair's premiership. Although the military phase of the intervention in Iraq is now over, the long-term implications of Blair's stance remain unclear for his project and for the future of the United Kingdom, Europe, and transatlantic relations.

Blair's Balancing Act

The Blair government came to power under exceptionally favorable circumstances. Elected at the beginning of a long economic upswing, for the first time Labour won a big majority in a time of prosperity. The international and European situations were also propitious. Blair had strong affinities with President Bill Clinton, who had also steered his party to the center in search of postmodern "Third Way" progressivism. In Europe, the dominance of the Franco-German relationship had declined; France and Germany were not providing European leadership together or separately. The interventionist model of economic development they espoused—and that the United Kingdom generally opposed—had run out of steam. This seemed the moment for the United Kingdom to seek a larger role, even leadership, if it could shed its traditional ambivalence toward Europe.

Under Blair, the United Kingdom's postwar economic decline ended. The interests of the British economy and of British society were seen as inseparable; the government successfully fostered development of a technologically advanced economic base, entrepreneurship, competition, a free market, and sound fiscal policies. It began the process of rebuilding crucial but long underfunded areas of infrastructure, such as the National Health Service and the transportation system. Traditional welfare was to be replaced by a system that enabled citizens to participate in the work process. Striving to create greater social equality not only was seen as a good in itself but contributed to a more productive society by reducing the corrosive social consequences of inequality. For the first time in many years, a British prime minister did not feel a chip on his shoulder about British economic performance vis-?is Europe's.

The government also addressed the decline of traditional British identity and the decay of political institutions. Scottish . . .