'The UK makes things too, it's not just finance'

The Olympics and the jubilee made it a fun year to be Britain's ambassador to Germany. But Simon McDonald told The Local in an exclusive interview he also dealt with euro-suspicion at home and German aspersions about UK industry.

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It must be an exciting year to be British ambassador - with the Olympics, the Paralympics and the Queen's diamond jubilee. The year was backed up with the "Britain is Great" ad campaign, visible all over Germany. How do you measure the success of a campaign like that?

We're still in the middle of that campaign, so it's quite early to give an assessment about the real impact. What evidence we have so far is more anecdotal that scientific, but the anecdotal evidence is fantastically good. Every German I meet is really enthusiastic about the Olympics in particular, and every German I meet who was actually in London is enthusiastic squared, so to speak.

When Prime Minister David Cameron said no to the European Fiscal Compact, did you have to field a lot of awkward phone calls?

It was an important and rather tense moment between the United Kingdom and the rest of Europe. But what I noticed here in Berlin was two things - one, that we had been discussing with Germany what was at stake for weeks before December 9, so Chancellor Merkel knew what was going on, so I think there was less surprise in Berlin than in some other European capitals. And second, after December 9, even though we had a row in Berlin and in London, both countries acknowledged that the agenda was wider than this row. The single currency is vitally important, and we continue to work very closely in other fields.

So it was a stressful time?

It is part of the personality of an ambassador to be phlegmatic. You don't let things stress you out. So I would say it was a time when I worked hard, but was not stressed.

You came into this office not long after Cameron became prime minister. Do you ever feel like you missed the good years when a euro-friendly prime minister like Tony Blair was in power?

I think I'd stress the overall importance of the relationship. Leaders in Berlin and London have more in common that what divides them. I don't think only Tony Blair had a good relationship with the chancellor of Germany. I think Gordon Brown had a good relationship and David Cameron does have a good relationship.

You worked in the embassy in Bonn in the late 1980s, when Margaret Thatcher was in power. What's it like now that the Iron Lady is on other side?

That is your description, not mine, of Chancellor Merkel! Clearly Margaret Thatcher was a dominant personality in the politics of Europe at the end of the 1980s, but the key thing for our policy in Germany was that - in the end - she agreed with German unification. And in the Two Plus Four process, the UK played a positive part, no matter the well-documented hesitations of the head of government.

That must have been quite a stressful time too.

It was an absolutely fascinating time. One of the things I learned for the rest of my life is that middle-aged folk see fundamental change coming more slowly. In the embassy in the late 1980s, we had some fantastic senior officers. The best in the diplomatic service. But they were so used to the Cold War and divided Germany that it took them a long time to see the importance of what was happening. Even when the Wall came down, it took them some time to realise that the inevitable consequence of this was the early reunification of Germany. And I think some of the younger folk understood that more quickly. So my lesson is to pay particular attention to what young colleagues have to say. When you're middle-aged you're used to how things work, and perhaps you've benefited from the status quo.

Is correcting people's prejudices about Germany and Britain a big part of your job?

It is - in both Berlin and in London. One of the misperceptions that I have to correct is the stubborn German idea that the UK makes nothing and relies entirely on financial services. The UK still makes 1.3 million cars per year, 80 percent of which are exported - and no German knows this at all. And Germans think financial services is a huge proportion of the British economy - and it's really 10 percent. These two facts I have to correct a lot.

What about British prejudices?

I think in London people know that Germany is very important, but don't understand how Germany functions, so the embassy has to explain that. One example is the federal structure of Germany, and the importance of the 16 Länder. There's nothing similar to that in the United Kingdom. The role of the Bundesrat is something I need to explain to a British audience.

How do you do that?

Well, in London a lot of power is concentrated in Westminster, which means that decisions can be taken quickly. So a Brit might say, 'Well, it's obvious that we need to take action very quickly, why the hesitation in Germany?' So I say, 'Well, it's not that Chancellor Merkel does not want to do this, it's that the government has a process of consultation that they absolutely have to go through to make a policy change. And that takes time.' "

Let's say the euro crisis ends tomorrow. What's the next challenge?

In order to put a solution to the euro crisis on a permanent footing, there will at some stage be further treaty change in Europe, so there will then be a debate about what Europe should look like. The UK will be campaigning for the subsidiarity principle, that a task should be performed at the level closest to the people. It's a way of pushing power towards the people.

For example?

One example in Germany is education policy. In Germany that is a state responsibility and not a federal responsibility, and still less a Brussels responsibility.

Do you ever see things in Germany, and think, "That would work really well in the UK, I'll suggest that next time I'm in London?"

There are lots of things in Germany which are admired in the UK, and I can give two examples - one is the need for industry and universities and government to cooperate in order to get good practical research. The German model is the Fraunhofer Institute, and the UK is setting up a branch of Fraunhofer this year. It's a German model which we are imitating. And the other one is the KfW - the idea of having a government bank is something that is under active consideration now in the UK, because we have so many different schemes for promoting industry that there's a feeling it would be better to bring these under one roof.

We once had useful Local List of German etiquette rules. Have you ever made a faux pas in Germany?

The other thing about being an ambassador is that you're rather insulated from your faux pas, so people don't generally tell you when you've made a social mis-step.

So it's like diplomatic immunity?

It's an example of that!

Ben Knight and Jessica Ware