Go into any high street bookshop in Britain and the European history section will groan under the weight of books about the Nazi era. Most of the time you will look in vain for something on Bismarck or Brandt. (If you are lucky there might be a copy of the excellent Iron Kingdom, by Christopher Clark, about the rise and fall of Prussia.)

Of course the Third Reich and World War II are an exceptionally important part of Germany's past. But generations afterwards many British, whistling the theme from The Dambusters, seem happy to define their relationship to Europe's biggest country solely through this prism. The Fawlty Towers "don't mention the war" episode was so brilliant because it was about a British, not a German, collective psychosis. But that I have written about elsewhere.

So how should we see modern Germany and how do the Germans see themselves?

One seasoned diplomatic observer suggested to me that Germans defined themselves by pride in their prestigious manufactured goods. Not fashionable clothes or designer furniture, but complex high-end technology, cars and audio equipment. I think he's hit on something particularly with the love affair with big, black fast cars.

It is pride in a Germany that makes the best in the world, things that make life comfortable and cosy.

German efficiency is a cliche of course, but it is also true. You get bumblers and bungling everywhere, but on the whole if Germans say they will do something, it will be done with the minimum of fuss or performance. Meetings run to time, and mistakes are corrected.

But Germany's own relationship with its past is crucial, however I might moan about British bookshops.

In Berlin it's the builders who lay the ghosts by obliterating the past. It was of course once the capital of a region and a country - Prussia, itself wiped off the map, not just by history, but by an Allied occupation law of 1947.

I stand on a bridge in the drizzle looking at four big grey structures, like tower blocks stripped back to the raw concrete - all that remains of the parliament of communist East Germany. Many wanted it to remain as a monument, but even these impressively sombre corner posts will be torn down in a few months.

Where Hitler's bunker once stood there are flats, side street parking and a notice with a fairly detailed map about the complex. There is more of the Wall left, but not a lot of fuss is made about it. But there is also a fascination with the past, a desire to pick at the wounds.

A film has just come out about the Baader-Meinhof gang, the left-wing terrorists who murdered more than 30 people in the 1970s. It is based on a book by Stefan Aust, who covered the events at the time. The film is controversial and has been condemned by the children of some of the killers' victims, but he says it gets better on every showing. He's seen it seven times.

I asked him what Germany's relationship with its past meant today. "You never get rid of that. Everything that happens in this country we compare to the German past, to the Nazi dictatorship. Germans are much more aware of their past than most other countries in the world. And that is at least one thing that is good, coming out of such a terrible past."

Why is that good? I wonder. "We are very sceptical about things, so we are sceptical when people admire politicians, we're sceptical about mass movements, we are very critical about what the police do, what the judicial system does. I think you have to think about your past to get rid of it."

We talk about the German attitude to war. Before 1999 no member of the German armed forces served abroad. Now they are the third-largest force in Afghanistan, although many allies query their wholehearted commitment.

"When Germany has to play a role in a war it is a terrible thing, and we don't make decisions like that very easily, because of everything that happened. So we were very sceptical about the Iraq war because we knew what it was to lose a war. When you start a war it is very important to win it. Right now it is very hard to see how we win the war in Afghanistan," Aust says.

Entering Berlin's Humboldt University, where Germany's next generation are being educated, the past is present. In the rather grand lobby the first thing you see, in gold letters on a background of brown and white marble, is a quote from Karl Marx, the one about philosophers having to change the world, not just describe it.

Set out in this entrance hall is a temporary exhibition, large black-and-white photographs of the Nazi attacks on Jewish business: the words "Jude! Jude! Jude!" scrawled across shop fronts make me shiver.

Two students, Bastian (24) and Florian (25), who are both studying history and want to be teachers, tell me things are changing. Bastian says: "We are the first generation who thinks rationally about the National Socialism.

"The first generation in the 1950s denied everything, our parents accepted everything, accepted the guilt and the responsibility, but we are in the middle thinking about the consequences, but we aren't feeling guilty any more. Yeah, we're the first rationals."

Florian adds: "We're the first generation as well who has grown up with a united Germany. I was six years old when the Wall came down and that is history. I was one of the woodpeckers at the wall, there was small me with a hammer - I didn't do much damage of course."

How does that mean they see Germany's place in the world now? "Our military presence in Afghanistan is a joke and will be for a long time, but that will change. I am very torn: I think we should accept responsibility but people are getting killed, sons die, mums cry. It's an ugly business."

"We're still divided," says Florian. "On one side we see

the responsibility Germany has to have in the world but we still are saying 'yes and no'. It's something we can do but shouldn't do."



But what about the broader question, what it means to be German now? Bastian says: "What does it mean to drink beer and love football? I don't know - I drink coke and love basketball. I don't know what it means to be German. I am Berlin, born here, I love this city but I don't know anything about being German."

Florian says: "I think there is no special thing about being German, it's just something written on your ID card." But he says during the 2006 World Cup things did change. "That's the only time we've had something like that. It's only during huge sports events that you see Germany as a nation: united in front of the television or something. You could see people wearing our flag, knotted around their necks, but if you do it and there is nothing like soccer around, Jesus: don't, that's a sin. Patriotism isn't considered a bad thing any more but you'd be considered a weirdo."

Perhaps these students are not the end of the process and it will take another generation or two before the past cease to haunt Germany. But I am beginning to see that a sort of national humility is a key part of the German soul. The past has made Germans reluctant to boast or strut.

When I said something to one businessman about Germany being the most powerful, important nation in Europe, he was reluctant to agree. "It is not for us to say that. You don't stir your own soup." If this is a German saying it's a rather odd one: clearly most people do. But you see what he means.

The same goes for the German language. The French are prickly if their language is not used at the top table or is slighted in any way. And while English is in a very dominant position I have not doubt at all we would be very defensive if it wasn't. But I have been at EU news conferences given by Austrians and Germans and they did not bat an eyelid about speaking in English.

