Was macht Deutschland so einzigartig? Peter Ross Range hat die Volkswirtschaft etwas genauer betrachtet.

On the night flight from Washington, I read all the German newspapers that Lufthansa offers. I'm returning for my first visit to Germany in eight years, my first visit to some places in fifty years.

The economy, politics, immigration, Germany’s energy transformation—it all fascinates me. Germany seems to be on top of the world. Or maybe that’s only the appearance. The euro is in trouble. Everyone expects Germany to fix it. Debate rages in the political world over Chancellor Angela’s Merkel’s decision to help bail out the banks of ailing countries.

Yet Germany booms. Unemployment is below 7 percent. People talk again about the German way.

“We need to learn from the German model,” notes Steven Rattner, the Wall Street financier who in 2009 led the $82 billion bailout of the U.S. auto industry.

Even Jeffrey Immelt, chairman of General Electric, the American giant, says: “We need to be more like Germany.”

None less than President Barack Obama, planning his economic policy, asked an advisor: “Why is Germany so successful at running a high-wage industrial sector?”

That’s not all. In his last State of the Union speech—an annual showpiece of American politics—Obama held up the model of Germany’s dual education system (without calling it German). He introduced a young woman, who sat next to Michelle Obama in the U.S. Congress. Her name is Jackie. She graduated from a joint training program organized by a North Carolina community college but sponsored and supported largely by Siemens to produce trained workers for its Charlotte, N. C., gas turbine plant. It is an unabashed copy of Germany’s dual education system. Siemens, Volkswagen, Bosch and other German companies are importing the German system to their American sudsidiaries.

Now I’ve come to Germany to see for myself what makes the country tick. Fifty-one years ago, on a warm August day, I arrived in Bremerhaven, Germany’s famous northern port, for what has turned out to be an enduring involvement with Germany, an emotional and intellectual entanglement that never stops.

As a journalist, I have traveled much of the world, lived in Vietnam, written about the Middle East, and spent much time in American politics. But, somehow, I always come back to Germany. Once there, it feels like a second home.

Frankfurt Airport: The Journey Begins

How did Heinrich Heine put it when he returned from France? “And when I heard the German language / Strange feelings stirred in my breast.” That’s how I feel, walking through Frankfurt airport. I’ve shifted into my other persona, the American in Germany, the stranger who is at home, the visitor who knows and admires Germany, but is not a German.

Maybe I can find answers to the question posed to Germans several years ago by Paul Volcker, former head of America’s Federal Reserve Bank: “How do you do it?”

The answers, Mr. Volcker, are in some cases plain to see.

I want to know how the rest of the world, especially Americans, can learn from the German example. America may be the world’s only super-power, but that’s not solving an 8.2 percent unemployment problem.

Germany is also a super-power today—a new kind of super-power in Europe, an economic and even political powerhouse, even if others are stronger militarily. But the military part barely matters in the European context.

Germany is in the hot seat. Loved or hated, Germany is expected to solve everything. All roads to Europe run through Berlin—and Frankfurt.

Germany has bitten many bullets, accepted the pain of labor market reforms, postponed retirement—and flourished. It still provides an extraordinary social safety net. How do you do that?

Right in Frankfurt airport, I notice big changes. Lots of dark-skinned people working in the airport, more than I’ve ever seen before. Some of them speak with accents, others speak German like schoolkids in a Hessian village. They all seem to fit right in.

Not that everyone loves being here. Not at five in the morning with a shockingly cold, windy drizzle in the middle of June—I’ve just come from 90 degree heat in Washington. Some are no doubt dreaming of balmy beaches in Sri Lanka or tea rooms in Turkey. But in Germany they have some kind of a base, however shaky. Serving Starbucks lattes or selling newspapers, they are part of a well-oiled machine, a secure mechanism that works. They may only be cogs in that machine, but sometimes it is good to be a cog. The machine is called Germany.

Bremerhaven: Emigrants and Exports

A half-century ago, culture and education had drawn me to Europe. In my American high school, we had exchange students—three from old Europe, one from Turkey. They were all so smart, so nice, so well-educated—already ahead of their American counterparts. And of course they spoke at least two foreign languages, sometimes more.

I wanted a taste of what made those young people so impressive. Thanks to a wave of postwar exchange programs to reintegrate Germany into the world, I received a fellowship to Göttingen University.

To save money, I traveled by coal freighter from Virginia, a 13-day trip across the heaving Atlantic to Bremerhaven, the city of emigrants. Over two centuries, more than seven million Germans left Bremerhaven for foreign lands, mostly America.

On one day in 1961, one American arrived, going the other way.

My little ship docked during the night of August 13, 1961. Something was wrong. The captain and the immigration police crowded around a radio. They would not left me off the ship. Berlin is being divided, they said. American and Soviet military were facing one another. It was one of the tensest moments of the Cold War.

Hours later, I went ashore and walked into history. I did not know what a large role the Berlin wall would play in my future.

During my first year in Germany, I was like a hog in mud. I reveled in studying German in the Black Forest, in hitchhiking and motorcycling from Flensburg to Berchtesgaden, in staying with many German families I met. I loved the easy access to culture (student discounts for the opera!), the cosmopolitan flavor of Göttingen (I lived in the Fridtjof-Nansen-Haus), and especially the electric atmosphere in Berlin.

Crossing through the newly fortified Checkpoint Charlie with my illegally-exchanged East Marks, I was rich. I could take East Berlin students to lunch in a nice restaurant on the pompous Karl Marx Allee.

Even in the 1960s, even with the war only 16 years in the past, I was astonished at how modern Germany seemed, thanks to postwar construction. And, at the same time, how rooted in the past: the village wine festivals, the official meeting of the village council (over beer!) in the local pub.

The little things were striking to me. How smoothly and frequently the buses ran—just 16 years after World War II. Yet how hard it was to shop for simple things: You had to stand in line and ask for a bottle of milk or a can of beans in a little mom-and-pop grocery store—no super-markets then.

As an American, I was treated alternately like a malefactor—because of abuses against blacks in the U.S. (even though I was active in the civil rights movement)—or as a hero. There was not yet an Americanized Vietnam war, no ugly American. Especially away from the universities, Germans’ memories of the Marshall Plan and Care Packages were still alive.

An exchange student’s energy went into learning the language, the culture, the geography, the people. All the focus was on Germany’s recovery from war, its return to the ranks of civilized nations. Even if the shadow of the war still fell across the land, there was a general sense of optimism about the future. Konrad Adenauer ran the country. Ludwig Erhard ran the economy. The Americans kept the peace.

Bremerhaven today

In today’s Bremerhaven, there are no coal freighters. Instead, this old Weser River port accommodates huge container ships, vast car carriers. Car lots sprawl around Bremerhaven like a flattened octopus.

Vehicles crawl into the belly of the big beasts, small animals entering Noah’s ark. Europe’s biggest car port—more than two million vehicles per year pass through here—is a living embodiment of the German export machine that never stops.

Like German cars, the port hums with smooth power and efficiency. With its recently widened Kaiser Lock (to 55 meters), Bremerhaven is the belt buckle between places like the Mercedes-Benz plant outside Stuttgart and EuroMotorcars, a busy Mercedes dealership just outside Washington, D.C., where I live.

“The containers leaving here for the U.S. are very full,” says Rüdiger Staats, the port spokesman, as we stand near a busy pier. “The problem is that many come back empty.”

We buy. Germany sells. It’s just that simple.

Germany’s exports in 2011 reached $1.32 trillion, making it, once again, the world’s second-largest exporter after China. Germany had a trade surplus of $197 billion. The U.S., on the other hand, with a $15 trillion economy that is almost five times bigger than Germany’s, had a trade deficit of $558 billion.

Looking at Germany’s success, President Obama wants to revive the American manufacturing sector. Many American economists believe it is a fool’s errand to compete with low-wage countries. They insist that America’s future lies in the knowledge economy and the services sector.

But Germany has proven the opposite. Even while moving big chunks of production to Eastern Europe and Asia, Germany has been able to retain a large manufacturing base at home and succeed globally by focusing on quality and innovation more than on quantity and price.

One of the reasons, as I learn during my personal fact-finding mission, is the rootedness of Germany’s small- and medium-sized business sector. One of the companies I visit has been in the same small town for 217 years. It is family-owned, it brings in at least $1.25 billion per year, and yet the boss has no thought of moving anywhere else—it would not occur to him.

The first lesson: Goods of excellent quality

That, Mr. Volcker, is the first and most fundamental lesson. It all starts with a high bar: Produce goods of such quality and innovation that the world wants your stuff. In America, that’s what Steve Jobs and Bill Gates did. In Germany, an entire economy is organized around this principle, especially industrial and manufacturing products. In the end, the best mousetrap wins.

President Obama talks about the strength of America’s small businesses. But it is not the same as small- and medium-sized businesses in Germany. They are called, simply, the Mittelstand (“middle estate”) and they are the backbone of German business. I’m astonished by the numbers: the Mittelstand makes up 90 percent of all German companies, providing 60 percent of all jobs that require social security payments and 80 percent of all official vocational positions.

Together they create huge chunk of Germany’s GDP and, most significantly, fully 22 percent of all Germany’s exports.

There have, of course, been massive failures, thousands of bankruptcies. Old family companies have disappeared. Many have been bought by larger companies. And yet many survive—an estimated three million firms—and thrive. In Germany, the entire country has not been consolidated into sprawling conglomerates, as is often the case in the United States. Big business is hugely important in Germany. But the Mittelstand is Germany’s secret weapon.

Typically, these companies have revenues below $1.25 billion and fewer than 3,000 employees, sometimes fewer than 100. And they are mainly family-owned firms nestled comfortably in the German countryside.

But what else distinguishes them?

“It is a mentality,” says Klaus Fischer. “It means risk and responsibility, being close to the people, being independent—including independent of the banks, if possible.”

Fischer ought to know. He is CEO and owner of Fischer, the famed maker of fastening systems—like small nylon wall anchors—plus automotive interiors and technical toys. Fischer is headquartered in the Swabian village of Waldachtal, 40 miles south of Stuttgart.

In the early 1970s, when the company founded by his father in 1948 was faced with global competitive pressures, Fischer traveled to Japan. There he studied the just-in-time production methods, the “Kanban” approach to inventory and production, and revamped his ailing business.

Today “kanban”—which translates from Japanese as “signboard” and functions as an inventory control system—is visible all over the production floor where eight million anchors are produced every working day. Color-coded paper slips on a tracking board show the state of every production order.

During a walk through the plant, I am amazed that it is as clean as a dairy, just like in Japan. Fischer adopted another Japanese concept: “kaizen”, or continual improvement. “We try to implant in every worker the improvement gene,” says Fischer.

Klaus Fischer’s favorite words today are “lean” and “waste.” He loves the first and hates the second. Fischer adapted the Japanese methods to his own taste, then cleverly rebranded the whole package as the “Fischer Process System.”

With slick marketing savvy like that, perhaps it is no wonder that Fischer competes well in the world market. Its fastening systems division alone produces 14,000 different products in eight plants around the world. Its automotive systems division is known for car interiors: ventilation jets, dashboards, cup holders. Its primary customers are the luxury brands: Daimler, BMW, Audi.

Fischer even sells his methodology and Process System through a new division called Fischer Consulting.

Papenburg: Flexibility and Innovation

The belief in lean production and just-in-time methods is echoed in another small town with one big company—Papenburg (Ems) near the Dutch border. The town is home to Meyer Shipbuilding, a sixth-generation family-owned company that, for 217 years, has lived close to its market and its workers.

“We are not the oldest or the biggest,” says Bernard Meyer, the eighth consecutive Meyer to head the firm. “But it is the small firms that have survived. Thyssen is now pulling out. We haven’t yet been taken over by the Asian competition, though Mitsubishi is getting in.”

Meyer Shipbuilding is a classic example of a firm that has innovated as the market has changed. Once known mainly for its wooden sailing ships, then its ferries and LPG tankers, this firm now specializes in mammoth cruise ships.

It is amazing to see one of these giants of the sea, floating entertainment cities with health spas, casinos and special kiddie pools, rising indoors in one of Meyer’s cavernous shipbuilding sheds.

It will, as always, be a day of amazement and celebration in 2013 when the new “AIDAstella,” with 69,000 tons and nearly 800 feet long, is launched. It will be powered and towed down the narrow Ems River, through the meadows and cow pastures, into the North Sea, 40 miles away.

Despite fluctuations in a crisis-sensitive business, Meyer is pleased with market predictions of five to six percent growth over the next few years. The bright spot in the market? Germany.

“Germans are learning that cruises are not just for the richer, older people,” says Peter Hackmann, Meyer’s spokesman, as he leads me through the booming, banging sheds. “Middle class people with children can go on cruises, too.”

By 2013, Meyer will have produced seven sparkling Club Ships, as they like to call their cruise ships, for Aida Cruises. The Rostock-based cruise line specializes in cruises for German-speaking vacationers.

Even with good prospects, shipbuilding—and all other German small- and medium-sized undertakings, for that matter—are businesses built on risk, flexibility, rapid change. Only with long-term thinking, not focus on quarterly or even annual reports, can they succeed.

Bernard Meyer learned that lesson dramatically when he first entered the family company in 1973. The first oil crisis had just struck, and Meyer reacted aggressively by winning a contract for six new Soviet oil tankers. Then, in 1985, as the market was changing again, Bernard Meyer decided to take a huge leap into cruise ship building. “If we hadn’t done that, we would not have survived,” he notes. “But no board of directors of a publicly-held company would have approved.”

Mr. Volcker, take note: Family-owned, small and middle-sized businesses are both an economic and a cultural pillar of German life. They are characterized by rootedness, risk-taking, long-term thinking, nimbleness. Also independence from the banks.

The next lesson: Germany’s Dual Education System

The thing that most impresses me during my ramble through Germany is the German dual education system. If small- and medium-sized businesses form Germany’s economic backbone, the great secret to their success is this unique three-year combination of in-company training (in 344 different trades) and classroom instruction in both humanitarian and technical topics.

With historical roots in the medieval apprenticeship system, and a modernized variant created in the postwar years, the dual education system has for decades provided German industry, both large and small, with a reliable stream of well-trained, highly-motivated workers. And it provides the workers, a significant portion of the population, with the tools they need for long-term jobs and security even in fast-changing global market conditions.

Cranking out several hundred thousand freshly trained specialists—from mechatronics specialists to metal workers to lab technicians—per year gives Germany a huge leg up on all its competition, American and otherwise. It seems, frankly, like a no-brainer. But can it be copied?

While the rest of Europe—and even the U.S.—struggles with alarming rates of youth unemployment, Germany’s rate is only 7.9 percent. France’s is more than double that. Spain and Greece are sucking air with 50 percent youth joblessness.

No wonder Spain’s education minister recently signed a letter of understanding with Germany’s education minister, Annette Schavan, to import the German model to Spain.

Germany’s interest? Besides a show of solidarity, Germany is desperate to fill a shortage of trained workers, now and especially in the future. The difference between today’s labor shortage and the need for guest workers in the 1950s and 1960s is education: The German economy doesn’t need coal miners and street cleaners so much as highly-skilled machine operators and computer-savvy information specialists. And it is willing to train them in Germany.

Training the machine operators of the future is one of the main goals at Fischer’s Black Forest headquarters. One morning I meet Julia Gölz in the company’s training facility cheek-by-jowl with the Dübel factory. When Julia was in the seventh class of her school, she faced a choice: dual education in a home economics field or in a technical one. For Julia, it was an easy decision. She chose the technical profession, even though she would be one of the few girls in her training course.

The Industry is looking for Female Talents

Today, after 11 months in the training program as an industrial mechanic at Fischer, Julia, 17, is one of a half-dozen trainees chosen to present their work and training to me. Julia is living proof that Fischer, along with school she attends in nearby Freudenstadt, put high emphasis not just on technical training but also on communication skills and personality development. Julia can speak; she can present; she has self-confidence and a presence.

“On ‘Girls’ Day’ at Fischer, the future trainees wanted to know how I deal with being in a class full of boys,” she remembers. “I told them it wasn’t difficult. Everything was completely normal.”

Klaus Fischer is especially committed to bringing more women into his company, breaking traditional boundaries. “We must train more females for technical work,” he says. While he’s on the topic, Fischer also thinks more males should go into kindergarten work. Though a trained (diplom) mechanical engineer, Fischer—an outspoken manager with a lively personality—seems especially attuned to human capital in industrial production. “It’s not the machinery that counts. It’s the workers.”

The trainees spend 13 hours per week in schools like the the education center in Freudenstadt—three schools with 3,500 pupils in a single location. There they take courses in German, civics, religion, business English and assorted technical subjects like accounting. The program typically lasts 3.5 years—and Fischer keeps 98 percent of its trainees in the company afterwards.

“Our training is broader than U.S. vocational training,” says Manfred Walter, a teacher and administrator at the school. “The German philosophy is that you should be able to use it anywhere in Germany.”

The dual education system has in recent years been broadened to go beyond secondary school to higher education. Student can earn a full college degree while also training in a company. It’s called “dual studies.” I meet a trio of students who are doing dual studies. They spend three months at Fischer, then three months at their colleges, off and on, for six semesters. Alena Ade, 21, is studying international business and hopes to enter Fischer’s global management team. She will also spend three months in one of Fischer’s overseas locations—in Argentina, Brazil, China, Italy, the Czech Republic or the United States. Although doing a dual higher education means having no campus life for half the year, Ade doesn’t mind “because here I get a salary at the same time—about $1,250 per month. That means I don’t have to take a parttime job to pay for school.”

At Fischer, the secondary school trainees have a good life. They work in sparkling clean conditions, wear jeans and bright red Fischer shirts, are treated as the company’s future. Fischer provides them with their own “Trainee Newspaper” and an annual week-long educational trip to Berlin as part of their civic training. Some of them have the chance for a three-month stay abroad. They also receive monthly salaries, ranging from $1,000 to $1,260.

And then there’s the icing on the cake: The top three graduates in every class receive a special prize: a Mercedes Smart convertible to keep for one year, as long as they work at Fischer.

German Discipline is Priceless

What amazes an American visitor is not the workshop, not even the cleanliness and sophistication of the machinery and production. It is the time invested, the attention to detail, the thoroughness of it all. In the case of a family-owned firm, with its freedom to think in the longer term and not about quarterly reports, all the classic German virtues seem to thrive: organization, discipline, order and structure.

While the purpose of the training program is to turn out skilled workers who can keep the export engine humming, I’m impressed that the Fischer program aims to develop rounded human beings, educated members of the larger society.

My return to the Black Forest for the first time since I learned the language there in 1961 is restorative and cheering. In Waldachtal-Tummlingen, the tiny village where Fischer grew up and still lives, the clear tones of the village church bells awaken me at 6 a.m.—just as they did fifty years ago. Soon I am jogging in the nearby hills. The scene is breathtakingly fresh: wheat fields here, dark woods there, small village houses streaming up the slopes, a low-rise factory down below. Every path and road is marked; signs tell you where to go, and how far it is.

To American eyes, Germany is one of the tightest, most organized countries on earth. Virtually every square centimeter is accounted for, governed in some way. There is almost no true openness, no unorganized space, nothing left to chance. Even the spaces dedicated to doing nothing, raw nature, are clearly specified and ordered.

No wonder there is less entrepreneurialism than in the U.S. Young people don’t look around and see voids that need filling. They see a complex system that is already has almost every contingency covered. Their ambition is to fit in.

Germany feels like one manageable package, less crazy and multifarious than the United States. Complex and sophisticated, yes, but something you can get your arms around. After all, Germany is about the size of Montana in the United States, a state with one million inhabitants. Germany has 82 million. Germany has fewer extremes, no hurricanes and out-of-control wildfires, no world-spanning military. Even with migration, open borders, economic globalization—Western Europe’s most populous country feels smaller and less complicated.

Complexity

But there is a paradox. Germany is also complex. Germans like complex systems, be they rules and regulations or toys and machines. It’s like the German crosswalks at busy intersections: a maze of lane markers that you need an owner's manual to understand. Cars, buses, streetcars, bicycles, pedestrians—each has a lane. Are there pigeon lanes? No wonder nobody jaywalks. You can get killed.

Germans make things complex because it makes them feel secure. This is not new. It’s a stereotype and a cliché. It is also true.

I’ve been reading the details of the dual education system on the website of the Federal Institute for Vocational Education. There are 344 distinct professions, each with detailed descriptions, histories, teaching plans, genealogies. You can also find the chart for the German tracking system: grammar school through universities. You can pull your hair out for a while studying these things.

And then, after a while, they start to make sense. Germany makes sense.

It is like the trains. The system is as dense and complex as a swarm of bees. The trains just snake along everywhere. They’re like water pipes, leading to every house, apartment and sink. Wherever you are, there is a train to wherever you want to be. And it is coming soon, no matter when it is. And when something goes wrong—like a little fire that started in the Göttingen station under the wheels of a fast train to North Germany—all the right people with the right fire extinguishers are there immediately. The train is announced delayed ten minutes, then canceled, then a new train is brought up ten minutes later and everyone is off. Unbelievable! I hate to think what would have happened if that had been Amtrak, the American train company.

Education Tracking System

There is, of course, one arguable drawback to the German education model. It is a tracking system which separates people at around age nine. Those who do well in the classical subjects are recommended for the academic track that leads to university. Most others, sixty percent of every cohort, are directed into the vocational track.

The objection to tracking is clear: If a young person doesn’t do well in the first years, he or she might never again have the chance to prove him- or herself. Chances are diminished for life. This penalizes of late bloomers.

Even in Germany, there is a movement to abolish the tracking system in favor of “integrated” secondary schools, in which all the pupils stay together just as in the American sytem. This system has already been adopted in Berlin.

“I had a very difficult beginning as a school child,” notes Dilek Kolat, an immigrant from Turkey who is now a German citizen. “I got bad grades and couldn’t speak German at first.”

Today Kolat is a spectacular success. She is a graduate of Berlin’s Technical University, a leader of the city’s Social Democratic Party and the city’s Secretary of Labor, Integration and Women. But she succeeded only as a late bloomer because a seventh-grade teacher, noticing her latent talent for science and math, saved her from relegation to the vocational track. He got her into an academic school, where she soared—the classic example of a late-bloomer handicapped by her immigrant background.

Opposition to school tracking is a tenet of faith in the American belief system. Even though the U.S. has plenty of undemocratic features—extremes of wealth and poverty, politics dominated by money—its core religion is still the egalitarian beau ideal, the hoary claim that “anyone can grow up to be president.”

In the U.S., a college education is seen to be the ticket to everything good: to a real career, to a secure living, to a piece of the vaunted American dream. The fact that only 25 percent succeed on the academic route, and the more important fact that, just as in Germany, a majority will end up in work that requires skills different from a college education, should raise questions about the German model versus the American model.

The German system, with its tracking accompanied by elaborate and high-grade skills training bolstered by general education, at least gives those not headed for a university program the tools for survival in today’s economic whirlpool.

I wonder if the American model, with its egalitarian obsession, is really serving the millions who need the know-how to run the latest and best production machinery, not the newest lines of code or trends in English literature.

Lesson for Mr. Volcker: Dual education is a stroke of genius. Americans should be taking a closer look at it. And the Germans aren’t waiting. Their America-based subsidiaries are already importing it to Charlotte, N.C.; Chattanooga, Tenn.; and Charleston, S.C.

Germany’s energy transformation

In 2011, Chancellor Merkel announced the death of nuclear energy production in Germany. In reaction to the Fukushima disaster, she surprised the German political world by adopting the longstanding Greens Party position: nuclear power is too dangerous and must go. All 17 German nuclear plants are scheduled to be closed by 2021.

The road to the end of Germany’s nuclear era is deceptively pretty. The two-car regional train out of Göttingen passes through the picturesque villages and sweeping forests of the Weser River valley, honking at every rural crossing. The cows in the meadows barely look up. The villages remind me of my early years in Germany—little knots of civilization amongst the protected fields and forests. Except that now, there is no animal poop on the streets.

Suddenly, amongst the rapeseed fields, there it stands: a hulking steel box, about 160 feet high and 140 feet wide, with no windows. It’s a scary apparition of power on the bucolic landscape. And yet it’s a fake scare. It’s a hollow box, a dead nuclear power plant.

Welcome to Würgassen, the first of Germany’s privately-owned nuclear plants to be dismantled.

Germany’s nuclear phase-out is nowhere more obvious than in a place like Würgassen. Even though the plant was shut down in 1994 because of hairline cracks in the core shield, and has been in deconstruction since 1997, it stands as a stark example of an age that is ending.

Nuclear phase-out is no simple job. Plant owners have two choices—to let a plant cool down for 30 years for a simpler deconstruction process, or the “direct” method: begin disassembly now, but with much higher security challenges.

Würgassen chose the direct method. “We wanted to take immediate advantage of the know-how of the workers,” says Petra Uhlmann, spokesperson for the Eon energy company as she shows me through the plant. “It takes three years just to secure the plant before starting the disassembly.”

Within the Old Plant

Wandering through the plant in white coveralls, special shoes and a helmet, I watch dozens of workers welding, sandblasting, disassembling. We climb to the top level, looking down over a deep hole where the nuclear core once stood. Below are the chambers where water levels rose and fell and spent fuel rods were removed from the reactor.

Ironically, tearing down Würgassen is costing more than it did to build. When it was constructed in 1969-1971, the Würgassen plant cost DM 400 million. Today, the total take-down of the plant, a 17-year process under the highest security conditions, is coming in at $900 million.

Just like any great technological shift—say, the transition from horse buggies to cars—denuclearization has dramatic social and economic side-effects. When it first came on line, the Würgassen plant—located in a charming curve in the Weser River valley where Lower Saxony, Hessen and North Rhine-Westfalia meet—drove a burst of growth and community. The neighboring towns of Lauenförde and Beverungen, former farm villages, were suddenly alive with newly arrived engineers and plant workers.

At its peak the plant produced 4.5 billion kilowatt hours per year and employed 500 people. “All the local clubs were run by engineers,” laughs Uhlmann. Today many of those clubs are gone. The towns have shrunk to half their former size. Stores have closed. Tearing a plant down does not require as many people—only 64 are employed fulltime, and most of them live elsewhere, since deconstruction is, by definition, a dead-end job that will be finished in 2014.

What’s astonishing to me is the German commitment to such a mammoth undertaking. Getting out of nuclear energy is as monumental a task as getting in. Creating alternative energy sources sufficient to replace nuclear (and especially coal) power is a daunting task—that’s well known. But the challenge of getting out—17 years to dismantle a single, rather small plant—is far bigger than most people realize.

When Chancellor Merkel announced the nuclear phase-out, my first thought was: The Germans are still disaster-prone in their thinking. They leap quickly to the worst case scenario. Is nuclear phase-out an overreaction to Fukushima? Leaving nuclear behind means burning more coal and gas—using more, not fewer non-renewable resources. In the short run, not generating nuclear energy forces Germany to buy electricity from countries like France—which generates 78 percent of its energy in nuclear plants.

Second, I thought: It is typical and admirable of Germans that, once the data are in and the elites see the right course (like no talking on cell phones when driving), consensus develops quickly and they simply act. They don’t have to have an endless political wrangle to take action.

But Germany’s grand plan for energy transformation is clearly more than just abandoning atomic power. The commitment to switching to renewable sources is a gigantic bet, a pioneering work on the ground in Europe.

“Germany is gambling its future on a whole different model of economic development,” says Daniel Hamilton, a Germany expert and director of the Center for Transatlantic Relations, a think tank in Washington, DC. “They want to break the link between the production of wealth and the consumption of resources.”

Stuttgart: Long Live The Old Economy

By any measure, Robert Bosch GmbH is big business. With 2011 revenues of $64 billion, with almost 300,000 employees worldwide, and a global Fortune 500 ranking of Number 119, Bosch is one of Europe’s great conglomerates, and Germany’s fifteenth-largest company.

Despite its size, this giant rests lightly on the landscape. Its headquarters, a flat-faced 12-story structure, is a model of discretion and tranquility. Passing through the security gate, I can hear birds chirping and the gardener’s clippers snipping.

My colleagues and I meet with retiring CEO Franz Fehrenbach. Fehrenbach was leaving but staying—taking an elevator from the fifth to the ninth floor, where he became chairman of a board of directors that is uniquely structured to give him almost single-handed control.

Fehrenbach is 63 but comes across younger. He seems a man of energy and resolution. When he strides across the lobbies and gardens, his head is down and his pace is brisk. The unique company structure—which allows Bosch “to pay no attention to the stock price,” as Fehrenbach puts it—means the company can be run like a family enterprise: high risk and high responsibility, and no worries about quarterly reports.

In a German family enterprise, a big question is how to keep the workers on the job even when orders are falling. Management looks not only outwards, towards the market, but inwardly, towards the total company.

This is exactly the attitude I discovered during several visits to Japan in the 1980s. “In Japan, we think of the company as a family,” Akio Morita, the CEO and co-founder of Sony, told me in a long Playboy Interview. “”You can't lay off people because of a recession. The recession is not the workers’ fault. Management must sacrifice profit and share the pain.”

Fehrenbach has the same attitude. Even in bad times, he says, “Robert Bosch asked himself, ‘What am I going to give my workers to do?’ That led to the manufacture of household appliances.”

All this seems so obvious. But for some reason the rest of the world has difficulty understanding the message. I recently heard Germany’s Minister of Labor Ursula von der Leyen put it directly and simply at a symposium in Washington. “The secret for German industry is, they get to know whom they are going to train and hire for the specific job they are going to do,” she said. “That should be easily transferable to the U.S.”

She’s handing us the keys to the kingdom, but nobody’s taking them. But I saw no pickup of her remarks in the U.S. media.

Germany is no Place for Price Wars

When I was a child growing up in America, “Made in Germany” was a sign of solidity and workmanship. Cameras, machine tools, and BMW motorcycles were the obvious examples. Often the products were of such high quality that only the rich or the professional could afford them: Mercedes cars, Leica cameras. (Volkswagen was a different matter: the Beatle was a cheap, simple car for students, teachers, hippies; I drove a Volkswagen bus). These brands are known everywhere. So is Siemens, the technology giant that has 70,000 employees in America alone.

But for a while, during the 1990s and 2000s, “Made in Germany” lost its luster. Volkswagen had practically abandoned the American market. Daimler-Benz made its curious merger with Chrysler, a failed marriage that lasted from 1998 to 2007.

Ironically, it was the famous Chrysler chairman, Lee Iacocca, who in the early 1990s told me in an interview: “What we really need to do in this country is get back to the factory floors. You’ve got to stand for making good stuff or you’re not going to win.”

In America, not everybody was listening. But it seems that the Germans have followed Iacocca’s advice. Today “Made in Germany” is resurgent. Once again, German products are seen as champions at the top of the market. Germany has wisely stayed out of the mass market, leaving low-cost products and price wars to China and other low-wage producers.

This is exactly the same model I discovered a couple years ago at Lake Como, Italy, when I wrote about the silk industry there. Historically the world headquarters of silk, Como has been devastated by China, which has captured the mass market. In reaction, the great Como silk firms—Ratti, Mantero—have focused strictly on top quality products at high margins. If you wear Zegna ties or Hermes scarfs, they probably came from Como. The model is working.

Germany’s business community also refused to fall for the conventional wisdom that industrial manufacturing was dead and gone to China. Germany builds the machines that China needs to build the products that dominate world consumer markets. The old country in old Europe has proved that the “old economy” is alive and well, if you know how to do it.

One company that seems to stand out from Germany’s tradition of manufacturing is SAP, the software giant. Purely a B2B company, SAP resembles an American start-up based on the vision of a few clever guys more than a classic German hardware manufacturer based on an invention by one or two tinkerers like Gottlieb Daimler, Karl Benz, Robert Bosch, or Werner von Siemens.

I don’t know which is more amazing: the fact that German industry still thrives on the work of these nineteenth-century entrepeneurs, or that Germany did produce, contrary to stereotype, a breakaway company like SAP. Not exactly a garage start-up like Microsoft or Apple—SAP’s founders had all worked at IBM—but daring enough, and risky enough, to qualify as Germany’s leading member of the New Economy.

Lesson for Mr. Volcker: German big business, just like the small- and medium-sized businesses, clearly benefitted from its continuing concentration on quality, a return to basics, and especially the reform policies and wage restraints of the past decade (plus government-subsidized reduced hours work during the recession).

Eternal struggle: Immigration and integration

For an American, Germany’s struggles to deal with immigration and integration are a source of joy and despair. Twenty years ago I wrote in National Geographic about the violence against foreigners and asylum seekers in German cities like Rostock and Mölln, about Germany’s discomfort with a flood of unfamiliar faces: “Why don’t the Turks go home? Germany should stay German!” a Berlin skinhead shouted to me one night.

I wrote: “The success of the German industrial machine has made it a magnet for the downtrodden of the earth: the poor Nigerian, the unlettered Gypsy, the wandering Bosnian. Like the United States, Germany now faces the fundamental questions: What is the obligation of the rich countries to the poor ones?”

While not endorsing the violence, many Germans had difficulty imagining their country as a land of immigrants, let alone as a home for dark-skinned people. Today that has clearly begun to change.

I discovered a new term in the German newspapers: the “culture of welcome!” It means a kind of official open-arms attitude towards immigrants. “Newcomers will have a feeling of being welcome and sought-after,” notes a press release about Hamburg’s Welcome Center. It is part of the other issue driving Germany’s new-found embrace of immigrants, the skilled labor shortage. Germany faces a severe shortage of skilled labor that is already felt today and would reach 6 million by 2025 if nothing were done to address it, estimates the Federal Labor Agency. Together with the Ministry of Labor and Social Affairs, the agency has launched an international recruiting initiative called “Make-it-in-Germany.”

I notice right away far more persons of color than during previous visits. And not only in low-wage service jobs, like serving coffee in the airport, but even in the ranks of high-security, good-wage positions like hotel receptionists and train conductors—jobs with a future. Clearly, these people belong to Germany, and Germany belongs to them. Somehow, and surprisingly, it all feels normal, just as normal as having Philipp Rösler—Germany’s Vietnam-born Economics Minister—in the government cabinet.

“I’m at home in Berlin,” I am reminded by Dilek Kolat, the Berlin Secretary of Labor, Integration and Women. “I belong here. So does my rather large family.”

With flashing dark eyes and long black tresses, Kolat radiates both charm and optimism about Berlin’s future. It is her job to paint Berlin as a good place to work, and she does. “We will need roughly 460,000 new skilled laborers by 2030. We are developing new mentoring programs for young immigrants. Siemens, for instance, is setting the pace. They give opportunities to youngsters who have difficulty getting started,” she says.

In the Turkish District

About 350 miles to the west, a picture of both integration and separation emerges during my visit to Marxloh, the heavily Turkish neighborhood of Duisburg. Duisburg, whose coal and steel industries recruited waves of guest workers during the postwar economic miracle, has Germany’s second-largest (after Berlin) immigrant population, an estimated 162,000 out of 486,000. Many of the immigrants are of Turkish origin.

Marxloh. a working class neighborhood hard by a Thyssen steel mill, was long burdened with high unemployment, crime and crumbling housing. The neighborhood jumped into the headlines in 2008 when Germany’s largest mosque was opened there (today a larger one is being built in Cologne). Yet fears of a cultural clash between the Muslim and Christian communities were averted before the mosque, called Merkez, was even finished. “We worked hard to make sure it became a gathering place for all kinds of people,” notes Leyla Özmal, Duisburg’s integration commissioner.

Özmal, a Turkish-born Tartar with roots in both Bulgaria and the Crimea, is developing a strategic model for the improved integration of the city’s Turkish and other minorities. The model, called “Intercultural Urbanity,” includes economic, educational, cultural and even architechtural elements. One of its prime features, based on the successful experience of the Merkez Mosque, is the need for more cross-cultural gathering places.

One such meeting place is an unlikely location in Marxloh. Called “Situation Room,” it is a low-rent storefront on Weserlestrasse, the neighborhood’s main drag, famous for its glittering Turkish bridal shops. Situation Room is the brainchild of Mustafa Tazeoğlu, 29, a native of Marxloh. Tazeoğlu uses the Situation Room as his base for giving outside visitors—from as far away as Japan—tours of Turkish neighborhoods, sometimes ending with a dinner in the home of a Turkish family.

Tazeoğlu has also founded his own urban affairs agency, Urban Rhizome. Operated with his partner, Christine Bleks, Urban Rhizome is the funnel for Tazeoğlu’s endless stream of developmental ideas for Marxloh. One of those brainstorms is “Exchange Teaching for Residence,” a proposal to turn some of Marxloh’s many empty and neglected apartments into free housing for university students—as long as they do volunteer teaching in the neighborhood. “We want to bring German students together with immigrant kids so they can both learn from each other,” says Tazeoğlu.

Others in Marxloh founded an artists’ and activists’ collective in a renovated World War II bunker. Dubbed “Media Bunker,” the thick-walled, six-story hulk was the breeding grounds of a new campaign to generate pride in Marxloh and put it on the media map. “Made in Marxloh” is its slogan, and it can be seen on signs around the neighborhood. The bright-yellow logo of was an immediate hit, says Halil Özet, one of the initiators. “Kids on the street now say to us, ‘Hey, Made in Marxloh, that’s great!’”

Away from home

In another part of Duisburg, far to the north, lies another neighborhood better known among Turkish immigrants for its tight-knit sense of community than for integration. Bruckhausen, a classic crumbling industrial neighborhood, is home to many first generation immigrants who live a good life, but a life apart.

I ring the doorbell under the sign, “Bruckhausen Education, Culture and Integration Society.” Over my shoulder hulks the iconic 90-foot silhouette of Thyssen/Krupp’s coke oven, emblem of a dying era. As the door opens, I find a symbol of a new era: a gorgeous blue-tiled mosque in the heart of old Germany.

The plain façade of the Fatih Mosque, as it is called, gives no hint of the sumptuous beauty and modern facilities inside. Kemaleffin Ince, retired after 38 years as a coal miner then as a crane operator at Thyssen, is the perfect host. I leave my shoes at the entrance as we step onto the soft carpets that fill the three-story building with meeting rooms, children’s rooms, small prayer rooms, large kitchen and, of course, the main prayer room, large enough for several hundred worshippers. It is stunning to come off the run-down streets into the sparkling glory of this new mosque, built, says Mr. Ince, for $12.5 million in 2003.

This house of worship is testimony to the strength and success of Duisburg’s Turkish community, or at least parts of it. Mr. Ince, who raised seven children in Bruckhausen, sees the mosque as the heart and haven of the Turkish community. He especially likes seeing the flow of school children into the mosque, where they attend afternoon programs and sometimes eat lunch. “When the kids come into the mosque, I am happy,” he says. “No problems, no involvement with the police.”

There are two other small courtyard mosques within two blocks of Fatih Mosque, as well as a club called “Bruckhausener Integration Society”. But the club functions mainly as a social center for men of Turkish origin, says my guide, Rudi Herschel. A psychologist at the Family Support Center on Dieselstrasse run by the German Red Cross, Herschel has worked for nine years in the neighborhood. “There’s not much real integration, unless they are encouraged by people like us,” he says.

So, Mr. Volcker, I’m happy to report that Germany is catching up. A new kind of liberalism in German society seems to be the key. Of course there are counterforces: misunderstandings, hopelessness, cultural distance, even hate. But nonetheless, it appears to me that Germany is gradually turning into a liberalized society that is open to the outside world.

East and West: Rudi Dutschke and the Stasi

In the late 1960s, when I was a young reporter for Time Magazine in Berlin, things were always incredibly exciting. History always seemed to be right behind me or right in front of me. The city still bore ubiquitous scars of World War II but also a constant expectation of future upheaval. The Berlin wall loomed like a nasty threat. The city air crackled.

History began again began right on my doorstep. On the evening of June 2, 1967, I found myself running back and forth with student demonstrators in the streets around the German Opera. They were protesting the visit of the Shah of Iran. Stones and firecrackers flew through the air.

I stopped to catch my breath on a side street called the Krumme Strasse, just a block away from the opera house. Suddenly I heard a bang and saw a flash in the open ground floor of an unfinished building right next to me. At first, I thought it was just another firecracker thrown by the students. But a few minutes later, someone was carried out on a stretcher to an ambulance.

Only the next morning did I learn that a student had been shot and killed by a policeman. The victim’s name: Benno Ohnesorg. His name has gone down in the history of the Federal Republic. The date of his death—June 2—became a rallying cry on the left and was appropriated by a terrorist group as its name in the 1970s.

History was made again.

The bitterness and conflict of those days—the famous events of 1968 especially—are hard to imagine today. I can still see the fury and hatred of street discussions between demonstrators and citizens, between radicals and police officers.

Berlin was partly in flames following the 1968 assassination attempt on Rudi Dutschke, the most feared and most loved young revolutionary in Germany. Today the cultural and social battles play out where they belong, in the political process and in the news media. It’s a more peaceful Germany, and the dividing lines are blurred. The lions are even lying down with the lambs. For instance, Dutschke’s son, Marek, is a weekly columnist for the high bastion of German capitalism, Das Handelsblatt. Even Sahra Wagenknecht, a leader of the Left Party, quotes the Handelsblatt without irony on the floor of the Bundestag.

My earlier visit to Berlin

When I returned in 1989 to cover the historic revolution in East Germany, Berlin was still crackling. I spent days running through the streets again, chasing activists of the New Forum and other reform groups. In Leipzig, I was one of the few journalists allowed inside the Stasi headquarters on the night of December 6, where “Monday night” demonstrators had taken over the building.

Mouths agape, we toured the Stasi’s basement holding cells for people they arrested. Then the demonstrators and journalists gathered in the spymasters’ cafeteria—a scene right out of the 2006 Oscar-winning movie about the Stasi, “The Lives of Others.” Within a few minutes, an historic confrontation and capitulation occurred: Lieutenant General Wolfgang Schwanitz, deputy chief of the Stasi and commander of Stasi forces in the region, came into the cafeteria and took questions. He sat at a table right across from me. A graying man in civilian clothes, Schwanitz agreed to take part in further discussions with the very insistent demonstrators. Whether he knew it or not, Schwanitz was signing the surrender of the old Communist state. The death knell rang that night in the Stasi cafeteria in Leipzig.

Berlin: Making History Again

When I returned to Berlin this summer, I expected the feeling of history about to happen would be gone. I had spent a day and night in Göttingen, my old university town, where, as Heine said, there is a “constant coming and going … an eternal human stream.” Fifty years after my own coming and going, I leave the city for Berlin.

The evening train is like a floating bridge from the economic world to the political one. The soft Lower Saxony landscapes and graceful wind turbines near Hildesheim fade into darkness. I sink into the traveler’s blessed bubble of reflection with a good book in the dining car.

But right on the edge of Berlin, passing through Spandau, I begin to feel the old electricity again. By the time the train glides into the glassy new Main Station, I am charged again with the familiar Berlin energy.

Real power, it is said, is life in the real economy. Political power is a sandbox created by politicians. But sometimes it is in the powerhouses of politics that life is played out.

Today Germany’s economic and political worlds are united in a joint project—salvation of the euro, keeping Germany out of debilitating entanglements with its neighbors, preserving Germany’s hard-won economic success, defining Germany’s new identity as the political powerhouse of Europe.

The upheavals of the 1960s and of 1989 were high drama, sometimes matters of life and death. The current problems seem less clear, more mundane. “Europe today is more of a muddle than a revolution, and the drama lacks all romance,” I wrote (with co-author Jackson Janes) in The New York Times last March.

In Washington, the great axis of power is Pennsylvania Avenue, the broad boulevard that connects the White House and the Congress.

In Berlin the axis of power is a crooked road connecting three impressive new buildings: the Federal Chancellery, a post-modern cube; the Bundestag (parliament), a glass box inside a stone facade; the Federal President’s Office, a shiny egg in a forest beside Bellevue Palace. I have appointments in all three.

I arrive at the chancellery just in time to learn that my meeting with Minister of State Eckart von Klaeden, one of Angela Merkel’s top four advisors, has been shifted to the Bundestag. He was suddenly called to the parliament on the next-to-last day before the summer break.

Von Klaeden awaits me on a couch in a parliamentarian’s lounge. He seems young and energetic. With Bundestag business swirling around us, von Klaeden—brown hair, rimless glasses, serious mood—describes the euro crisis. “It’s the old world’s battle for its place in the world. We can't continue on the road we’ve been on. We need a Europe that is strong enough to be both partners and competitors with America and Asia. Then we’ll be able to continue living well in Europe.”

The German capital is regaining leadership

After the Berlin wall fell, I wrote in National Geographic: “Berlin’s fate is to lead Germany—and, perhaps, Europe itself—into the next millennium.” For more than 20 years, that prediction was in doubt. Today, with Europe in crisis, with Germany in ascendance, it is coming true.

Von Klaeden and I don’t know it yet, but this day—June 28—is a fateful one. Within hours, Chancellor Merkel will surprisingly agree during an all-night negotiation in Brussels to accept direct liability through the European Stability Mechanism for all banks in the euro zone.

The next day, all hell breaks loose in Berlin. Much of the press attacks Merkel for giving away the store. Finance Minister Wolfgang Schäuble is summoned for a special committee hearing on the concessions in Brussels. But plans for an evening vote in the Bundestag are not changed. Friday is the final day of the Bundestag session before the summer break.

I'm in my seat in the Bundestag press gallery by 5 p.m. I have not been here since 1999, when Helmut Kohl, Michael Gorbachev, George H. W. Bush made speeches celebrating the tenth anniversary of the fall of the Berlin wall. But another speaker stole the show. Joachim Gauck brought his heartfelt style to the scene with his impassioned line: “We dreamed of paradise but woke up in North Rhine-Westfalia.”

Chancellor Merkel walks in wearing her trademark pants suit with a white blazer, looking like just another parliamentarian. No security, no hoopla, no rock star. The most powerful woman in Europe, maybe in the world, talks with colleagues, goes behind the rostrum to ask a waiter for a glass of water, sits down on the government bench. I’m struck by how it all seems so normal, so simple, so democratic.

Above us, in Sir Norman Foster’s spectacular glass dome, I see tourists wandering like busy ants, blithely unaware that history is about to be made down below. The scene is unimaginable in Washington, with our security obsession and the sanctity of high government officials. The president—whether it is Obama or anyone else—is treated as a superstar celebrity wherever he goes.

Merkel, in her familiar understated style, makes her case for adoption of the fiscal pact, and tries to separate the events of the night before from the legislation before the parliament. Beneath the great German eagle hanging on the wall like a plastic cut-out—it seems too big to me—the chamber then erupts with a series of impassioned speeches. I’m struck by how direct and sometimes impolite they can be. “Don’t make such a fool of yourself!” shouts parliamentarian Sahra Wagenknecht, a leader of The Left Party, at Sigmar Gabriel, the chairman of the Social Democratic Party. She demands blockage of the fiscal pact. “Anyone who doesn’t vote against it is being hypocritical!”

Mercifully, I hear no voices from the right calling for extreme solutions, like the end of the euro. Germans are rightly proud that nationalism and xenophobic sentiment have no viable party in Germany, unlike in other European countries. No Sarah Palin in sight, only Thilo Sarrazin and Hans-Olaf Henkel. Ironically, the strongest anti-euro-salvation voice comes again from Wagenknecht: “It’s nothing more than a special project for Morgan Stanley and Goldman Sachs!” she says.

The discussion continues until after 11 p.m., when, finally, despite all the Sturm und Drang, the Bundestag gives Chancellor Merkel an overwhelming majority. History is made. The Bundestag goes on vacation.

Joachim Gauck: Freedom and self-empowerment

For an American of my generation, the Cold War—especially the division of Germany—was an intimate and powerful experience. I grew up with the Berlin wall—it was born on the day I first set foot on German soil and I was there for its death. The subjugation and depression I saw on many trips into East Germany generated a profound sympathy for a repressed people, now finally free. No one has better captured the emotional quality of that liberation than President Gauck.

And today, no one seems more acutely aware of Germany’s enlarged role in Europe than the new German president. I’ve met Gauck a few times in the past. His background as a resistant preacher in the GDR, and his sensitive management of the records of the Stasi’s 39 years of repression, made him one of my favorites. I thought Germany was well served in choosing him for president.

In the Federal President’s Office, a modern glass structure hidden in the woods near Schloss Bellevue, I have an appointment to meet with David Gill, Gauck’s chief of staff. Inside the oval building, the four-story atrium seems as quiet as a monastery between prayers. All the doors are closed, German style. It seems almost Kafkaesque; I wait for a door to open—but where? With its black railings and long balconies, it looks like the inside of a prison, says a German friend.

Finally a door pops open and I meet Gill. He is all energy, charm and smarts. Gill laughs quickly, appreciates irony, grasps questions intuitively.

Like Gauck, Gill grew up in East Germany, a man of the church. Following unification, he and Gauck became a tandem team, with Gill serving as press spokesman of Gauck’s agency to manage the old Stasi files. Gill went on to study at the University of Pennsylvania and even spent a few weeks at Harvard. No one better understands the conflict and synergy between Citizen Gauck and President Gauck than David Gill.

Gill is, of course, fully in tune with President Gauck’s themes of freedom and empowerment of the individual as an engaged political actor. The president also understands that while Germany must never again become too powerful, the country has a responsibility—because of pure size and economic success—to play a certain role in support of Europe. He tells his counterparts in other countries that they are better off dealing with a self-confident country than one that is still unsure of itself, but that Germans may not be quite as self-confident as they may look.

Gauck’s ability to be the good face of Germany, internally and externally, always seemed to me his strength. In The New York Times, last March, we wrote: “Germans need frequent reassurance that they are O.K. The rest of the world likes frequent reassurance that the Germans are O.K. Mr. Gauck is in a position to give both.”

Culture of debate

Germans take nothing lightly. The culture of debate is highly refined, constantly practiced. It ranges from the nightly popular talk shows—Günther Jauch, Maybrit Illner, Anne Will—to the pages of the great newspapers, from Handelsblatt to the Süddeutsche Zeitung, from theFrankfurter Allgemeine Zeitung to Cicero.

“Nein! No! Non!” wrote the editor-in-chief of this newspaper, Gabor Steingart, in an unequivocal front-page admonition to Chancellor Merkel not to accept pressures from America, Britain and other eurozone countries to bail out failing banks and loosen the reform rules. “A respectable outcome,” replied editor-in-chief Kurt Kister of the Süddeutsche Zeitung, endorsing Merkel’s surprise agreement to give broke banks direct access to the European stability fund. “Merkel blinked first,” regretted Clemens Wergin in Die Welt.

Sophisticated debate in public print is an ornament of the German political tradition. The willingness—no, eagerness—of German feuilleton editors to publish complex, long-running public debates gives even difficult topics broad exposure to a general audience. No wonder the new economists’ quarrel led by Hans-Werner Sinn over Merkel’s euro-crisis policies jumped so quickly into the public square.

When it comes to intellectual jousting, Germany has an embarrassment of riches. The public role of the educated elites, even in today’s egalitarian democracy, is outsized and more prominent than in the U.S., despite its Harvard professors and New York Times columnists like Paul Krugman. The historians’ quarrel of the 1980s; the bitter quarrels unleashed by Martin Walser’s 1998 “moral cudgel” speech; or the recent dust-up over Günter Grass’s provocative poem, “What must be said”—all these were carried out in full public view, the intelligentsia baring its soul and selling its wares.

The culture of debate is so rich that it comes even inspires its own self-mockery. “A Nation of Scolds,” titled Cicero its cover story on the Grass debate, dissecting the debaters. Heine, the great mockery-monger, would be laughing.

Germany’s role: Leadership in Europe

There are two great debates in Germany today, one obvious, one not so obvious.

The first is how to save the euro. The principle of fairness—Germany has already paid enough—must somehow be balanced against the real existing situation on the ground. Germans are right, I think, to insist on reforms that come only with tough love and acceptance of hardships. But with the crisis in an advanced stage, Germany must do what one does in the worst case scenario inside a family: come to the rescue while still enforcing the basic rules. Otherwise Germany and Europe risk a train wreck with global implications.

The second debate is harder and more historic. It is a question of identity: What will Germany—the new, strong, revived and mighty nation in the center of Europe—be in the twenty-first century? How can it be the big guy without acting big? How will Germany lead Europe?

The question is historically freighted. Chancellor Merkel is unmercifully bashed in the European media, first as a Nazi, then as a Terminator. The old cultural demons—fears of Germany, stereotypes about Greeks—are the solvent that is melting the glue of union.

Yet everyone expects Germany to save Europe. “Being German in Europe today is like being American in the world,” lamented a Berliner I know. “People are always telling the Americans what they need to do, then criticizing them for not doing it right.”

So how does Germany get it right? Germany’s route to success as Europe’s preeminent nation will, it seems to me, pass through the looking-glass of self-reflection and self-confidence. President Gauck has it right, I think, when he says a German can look back on postwar history and say, “… I did that right. And to an enlightened degree, we can use the word ‘proud’ with regard to our country.”

The president’s perspective as an East German gives him, in my view, special credibility. Since today’s Germany is—with all due respect to the new states of the East—an enlarged continuation of the Federal Republic, Gauck can judge Germany from the outside, so to speak. Many West Germans, raised with the burden of guilt and whipsawed by the 1960s and 1970s, have trouble using the word proud. Gauck does not. When he tells foreign leaders that they are better off dealing with a confident Germany than one with self-doubts, he also notes that Germans are not really as self-confident as they should be.

He’s right: we’re all better off if the new Germany develops a calm self-confidence along with a realistic understanding of the burdens of leadership. Germany has to develop a global perspective. Playing the political dwarf will not work anymore.

Trip’s end: the child has grown up

Memo to Paul Volcker: I leave Germany encouraged. The main pieces of the puzzle are fairly easy to see: Labor market reforms, short-hours work during recession, cooperative industrial relations, concentration on quality over quantity, cultivation of small- and medium-sized business. And, best of all, dual education, the part that most easily could be exported to the rest of the world. Even Germany’s uneven struggles with immigration and integration strike me as a great leap forward—what a difference from twenty years ago!

Now Germany is donning the mantle of leadership. It’s hard to remember that the Federal Republic was only 12 years old, still nervous as a child, when I first arrived in Bremerhaven. But it has been an eventful half-century since then. The child has grown up.