The downfall of Chancellor Helmut Schmidt, after 8 1/2 years in office, deprives the Western world of its most experienced and perhaps most outspoken statesman.

His rise to international prominence -- partly through U.S. leadership troubles, partly through his own strengths -- coincided with West Germany's gradual reemergence as one of the world's major political powers.

His allies often resented the tart lectures meted out by the bright, cocky chancellor, and they worried anew in recent months just where between East and West Schmidt was leading his emboldened nation. At the same time, he was egged on to assume a more authoritative role by friends inside and outside West Germany who expressed mounting doubts about the predictability and direction of American foreign policy.

In the end, the 63-year-old Schmidt was defeated because conditions, at home and abroad, would not allow him the room he needed to maneuver.

An element of his undoing came also from his own talents. Schmidt's expertise in military strategy and impatience with American leadership led to a speech in London in 1977 that set in motion the Atlantic alliance decision to deploy new nuclear weapons in Western Europe. This decision divided Schmidt's Social Democratic Party and the country generally, and its basic wisdom is disputed by some experts today.

But Schmidt's undoing was largely the result of circumstances beyond his control. It was his fate to have to manage West Germany during a period of increasingly difficult economic strain, East-West tension and generational rift.

These developments, which upset the assumptions of social stability and political consensus on which the country had been governed, blocked channels for new initiatives. It took much of Schmidt's enormous energy just to prevent erosion, to shore up the gains in detente and social welfare achieved during the 1970s.

His political high point was reached in autumn 1980, when the left-center Bonn coalition easily won reelection. Up to then, Schmidt had: steered West Germany through a world economic recession with less shock than other industrialized countries suffered; survived the 1976-77 wave of terrorism without damage to basic institutions; cofounded the European Monetary System with President Valery Giscard d'Estaing of France; and triumphed repeatedly over Jimmy Carter -- in disputes involving nuclear plant sales to Brazil and Argentina, economic sanctions against the Soviet Union following the invasion of Afghanistan, and a U.S.-desired reflation of the West German economy.

Signs of a German economic stagnation were only barely on the horizon then, eclipsed by the political challenge from conservative Bavarian leader Franz Josef Strauss, Schmidt's campaign opponent. So, too, the implications on Bonn's relations with the East Bloc of the social upheaval in Poland, then just beginning, were uncertain. And Ronald Reagan had not yet been elected.

The full effect of these developments surfaced after the election and underlay the erosion in 1981 of Schmidt's authority. Despite his embittered allegations now against his erstwhile coalition partner, the Free Democrats, for destroying their 13-year partnership, the decay of his government began in fact in Schmidt's own party.

The Social Democratic left wing grew more assertive in its opposition to nuclear power plants, nuclear weapons and cuts in or caps on social programs. In a new period of limits to growth and heightened East-West tension, the Social Democrats foundered, splintered, turned cranky and quarreled more than ever with their chancellor, who sat on his party's right wing.

The times seemed to demand a leader who could sweep away the national uneasiness and offer a revised vision of the future. But Schmidt was never one for long-term visions.

Increasingly hamstrung by his party critics, he was not getting much help from abroad.

The Cold War rhetoric out of Washington in the early days of the Reagan administration fanned opposition to Schmidt's pro-Western course here. The Kremlin also disappointed Schmidt by continuing to deploy SS20 nuclear missiles targeted on Europe and by orchestrating martial law in Poland.

Schmidt's health faltered. On top of a thyroid problem that had plagued him for more than a decade, he developed heart trouble and was fitted with a pacemaker a year ago.

He has looked more vigorous this year. But the rot had set deeply in his government. The Free Democrats, worried that the Social Democrats' declining popularity would pull them down as well, started looking for a way out. Coalition disputes, particularly over finance policy, paralyzed the administration by the summer.

In forcing the breakup of the coalition Sept. 17 by calling for new elections, Schmidt seemed to regain his old strength and combativeness. He and his party have been reconciled.

During the past year, as bones thrown to his party's left wing, Schmidt spoke of himself as an "interpreter" between Washington and Moscow and advocated a "security partnership" between West Germany and the Soviet Union. His statements on the United States were peppered with attacks on its high interest rates as the primary cause for Germany's prolonged recession.

But he regarded himself as the embodiment of strong U.S.-German relations. Even before he took office in 1974, he had developed, as defense and finance minister, a very broad range of personal contacts.

Schmidt's friends never doubted one aspect of him -- that was, and remains, his loyalty to the Western alliance.