Europe will be coalition's first test

This is the best day of my political life since 1984, my first election. In 1988, Margaret Thatcher's Bruges speech set the increasingly Eurosceptic tone of the Conservative party, against which I struggled for so long and ultimately led to my joining the Liberal Democrats in March this year. Britain has now become more of a European nation with five-year fixed-term parliaments, coalition government and the real prospect of much-needed electoral and parliamentary reform. Britain's first postwar coalition government – formed 70 years to the day since the last – is a combination of power and principles. David Cameron's evident wish for power reflects the values of a party which has been in power for two-thirds of the 20th century. The Liberal Democrats are a genuinely democratic party, as the series of meetings have shown over the last few days. And they are risking a post-election conference this weekend where there may well be dissenting voices. They campaign tenaciously and successfully at local level and, despite the distorted British electoral system, still have 57 members of parliament. Now they are in government it is interesting to see the authors of the 2004 Orange Book , which pushed economic liberalism, in key positions. The social liberals recognise a genuine convert in Cameron, apparently reflected in the unanimity among Lib Dem MPs and the 27-1 vote by the party's executive in favour of the coalition. The combination of Cameron's determination and Nick Clegg's principles, underpinned by his training as an EU trade negotiator will strengthen this administration and augur well for stable government. But it is in the European Union that immediate problems could occur, since this will be where the first test of how the British coalition government deals with the ongoing daily programme of legislation and meetings. Cameron's much-criticised creation of the 54-member ECR group in the European parliament has isolated the Conservatives from the mainstream centre-right EPP family. This could be a real problem as Britain tries to lead in Europe again after 13 years of missed opportunities under Labour. The EPP's 265-strong majority group in the European parliament can provide Cameron with routine access to Angela Merkel, Nicolas Sarkozy and all the other centre-right leaders in the EU through its associated pan-European party. EPP leaders have pre-summit gatherings, such as that last month on Greece's deficit. Although the Conservatives are currently marginalised in Brussels, the Lib Dems are firmly at the centre of European politics. The liberal family is in government in 14 of the 27 EU member states, with four prime ministers and eight EU commissioners. The 84 MEPs in the ALDE liberal group play a pivotal role, being on the winning side in 88% of all the votes . This is of crucial importance because MEPs now share powers, under codecision, with ministers. Because of their new responsibilities under the Lisbon treaty, the monthly meetings of ministers, according to their portfolio, are also now preceded by get-togethers with their counterparts from the same family. The EPP routinely caucuses before 10 subject meetings, from agriculture to economy to transport. It cannot be in the British national interest for the Conservatives to sit this out. Their old home with the EPP remains the largest and most influential European-level political party of the centre-right, with the presidents of the commission, council and parliament, 14 EU heads of state and government, and 13 other EU commissioners. One of the first tasks of the new coalition in London should be to examine how Britain can rebuild a coherent and systematic approach across the board. In William Hague the country has a foreign secretary who is McKinsey man to his fingertips and well-fitted to the task. Despite his well-known Euroscepticism he was apparently lukewarm about Cameron's leadership pledge to quit the EU mainstream and form a new grouping, as a leak to the Sunday Times and his comments to the BBC showed. David Davis, a former Europe minister, was also unwilling to make that pledge to Europhobes during the leadership battle. Forming the European group described by the Economist as " a shoddy, shaming alliance " was a disservice to Britain – it will now also make delivery much more difficult for his ministers, their officials, diplomats and, not least, his hard-working MEPs. Now that Cameron is in power he should invite Hague to set about renegotiating an alliance with the EPP. After all, Hague did this successfully in 1999 while he was party leader and I led his MEPs. Cameron now has the chance to distance himself further from his Ukip-tendency at home and extremist allies abroad. His 4 November speech, which took real courage, ruled out a "phoney" referendum on the Lisbon treaty and enraged the Europhobes. In the same speech he set out some of his other objectives in government, most of which remain despite the coalition and most of which will require the agreement of his EU partners. Now is the time for a fundamental rethink of his European strategy – as befits a government in the national interest.