Germany – so strong, so reluctant to take the lead

The last time I returned to Berlin was for the 20th anniversary of the fall of the Wall. Europe had weathered the storm of the economic crisis that started in America. German exports had declined, but the country and much of the continent felt it had dodged the worst bullets.

How things have changed. Germany sits almost alone as a wealthy colossus berated by its neighbours for not writing enough cheques to save the world economy.

Berlin continues to cling to its economic orthodoxies, its abhorrence of debt, fear of hyper inflation and its disastrous political consequences. These are all things etched into Germany’s DNA.

Having spent the last seven decades never being allowed to forget its grim past everyone is now calling for the Germans to do just that. But the past has a habit of clinging to the present in this place.

Berlin is still adamant in its refusal to let the ECB extend bond purchases. Wolfgang Franz, the head of the German government’s panel of “wise men” – ie economic Druids – called more Eurobonds a “deadly sin”.

Germany will only overcome its hang ups if, and when, France faces the abyss created by the bond markets.

President Sarkozy is in a panic. His economy is tanking, his banks are creaking from exposure to dodgy loans and he is facing political oblivion at next year’s elections.

But if Paris comes to Berlin clutching its begging bowl it will be very hard for Frau Merkel to say Nein.

The French German liaison is still the keystone of Europe. To say otherwise is to be politically incorrect.

And Germany still feels more comfortable leading from behind…the French.

Matt is on Twitter, follow him @MattFrei