WHAT does Germany want? The question comes up in every discussion about the euro. What it does not want is clear enough: no “transfer union”, no pooling of national debts and no break-up of the single currency. But it is hard to know how it hopes to reconcile these aims, harder still to discern the ultimate goal of Germany's European policy.

All of a sudden, though, Berlin is abuzz with talk of remaking the European Union: issuing joint Eurobonds, renegotiating the EU's treaties, even creating a federal Europe. Nobody knows if any of this will come about. The obstacles to fundamental change are so forbidding that leaders will always be tempted to try to muddle through. Yet the terms of Germany's debate are shifting. German politicians seem to have decided that the time has come to start redesigning European institutions. Again.

German Euro-federalists have woken up after a long slumber. It is no surprise that Joschka Fischer, the Greens' elder statesman, should call for the “United States of Europe”. More striking is that Gerhard Schröder, a former Social Democratic chancellor, uttered the same words, as did Ursula von der Leyen, the labour minister and a leading Christian Democrat. This week Mr Schröder was in Brussels alongside other ex-leaders—Felipe Gonzáles of Spain, Guy Verhofstadt of Belgium and Matti Vanhanen of Finland—calling for Eurobonds, EU powers to raise taxes, “Europe-wide public goods” and a European “federation”.

This might sound like the ravings of a has-been. Certainly, it flies in the face of rising Euroscepticism across the continent. Yet the German government itself is talking of reshaping the EU's institutions. Angela Merkel, the chancellor, says that reopening the treaties is no taboo. Her finance minister, Wolfgang Schäuble, talks of one day giving up some sovereignty over budgets.

Germany's change of mind is born of twin failures, of the financial measures so far taken in the euro zone and of political strategy in Germany. As the debt crisis has deepened, Germany has had to retreat from one red line after another. Last year's bail-out of Greece was meant to be a one-off; since then Ireland and Portugal have been rescued and Greece has come back for more. A big European bail-out fund was supposed to be a temporary measure; now it is being made permanent.

The debacle is weakening Germany's ruling coalition. Surveys show that Germans are fed up with the euro. But neither the Christian Democrats' opposition to Eurobonds nor the Free Democrats' flirtation with more overt Euroscepticism are winning them votes. By contrast, the Social Democrats and the Greens are making gains even though they want Eurobonds that could merge ultra-safe German debt with Greek junk.

“This is a strange country,” says Hans-Olaf Henkel, a former head of the German business federation, who once supported the euro but now advocates breaking it up into a northern and southern currency. “Public opinion does not like the euro, but does not want to hear of an alternative to it.” The strangeness is due, in no small part, to the disasters of history. Post-war Germany bound itself with rules and treaties in order to resist past temptations: a strong constitution to restrain politicians, fiscal rules to banish hyperinflation, the EU to tame nationalism.

The euro zone's crisis has tested the efficacy of these European rules and led Germans to ask why they should pay when others break them. But as the constitutional court showed this week, European integration is too much part of Germany's post-war redemption to be abandoned easily, however many problems it may cause. So some Christian Democrats now want to reclaim the pro-Europe heritage of Konrad Adenauer and Helmut Kohl. The best way to confront Euroscepticism, they say, is to improve and deepen the EU.

There is some difference between Mrs Merkel and the Europhile Mr Schäuble over how to do it. Both agree that the euro zone's problems have been caused by the laxness of countries that piled up debt and lost competitiveness. Both want new ways to enforce budget rules. Both think that, issued now, Eurobonds would kill what little zeal for reform exists. Both hope stricter rules would not only resolve the crisis but ensure it does not recur. But they differ on the future and on Eurobonds. For Mrs Merkel, rules and rectitude would narrow bond spreads and make Eurobonds unnecessary. For Mr Schäuble, tougher rules are a necessary condition for Eurobonds and closer political union.

We don't know what we want but we're happy to discuss it

Germany, then, does not know what it wants—but is ready to talk anyway. Its politicians recognise that the current system cannot provide long-term stability in the euro zone. They also know that dangers lurk in any attempt to renegotiate that system.

Resistance in the German Bundestag and elsewhere means that even the partial bail-out measures agreed in July are getting bogged down. What are the chances that the EU can agree on an even bigger leap towards fiscal integration? And what are the chances that citizens would vote for it? Perhaps the crisis might be a spur to the federalist impulse, but nobody can count on that. What is certain is that any treaty changing the EU's institutions would be disruptive. The EU spent the best part of a decade writing a constitution, rejecting it and finally reviving it as the 2009 Lisbon treaty. Any further loss of sovereignty might require Germany to amend its constitution. Britain would seek to repatriate powers. Inevitably, a more integrated euro zone would raise questions about the ten countries, many in Germany's hinterland, that remain outside. Without liberal economies like Britain to resist protectionism, the single market might be endangered. It would be a tragedy if the attempt to save the euro were to put the single market at risk. Germany would not want that either.

Economist.com/blogs/charlemagne