Nothing does your head in more as a Londoner than living in a small town in Germany. It was in the late 1980s that I found myself as a foreign correspondent living in Bonn, the "capital village", as it was known before reunification.

My first culture shock came as I crossed the border from Belgium. When I presented my credit card for payment at a service station the attendant looked at me blankly, and asked: "What would I want with that?" I gradually got used to elderly folk peering through net curtains to see what I might be up to. The neighbourhood committee would leave notes on my car windscreen addressed to the "Dear Respected Neighbour", asking me ever so politely to clean my car as it was bringing down the reputation of the street. And the shops … spindly corner shops that were never open when office folk needed them.

This was the time when in Britain, everyone was aspiring to be Gordon Gekko, or so the myth went. Work hard, play hard, chop and change jobs and enjoy the high-octane lifestyle. How I envied my friends back home. I was convinced that, for all its Thatcherite ugliness and excess, there was something about the UK's gritty liveliness that would leave the stolid Germans behind. The economists tended to agree. Flexible labour markets and low unit labour costs were the future. Deregulation was essential. Financial services presented the path to paradise.

So what has changed? Everything and nothing. Not only did (West) Germany absorb the economically decrepit East in the 1990s, with far less inequity and far greater success than any other country could have achieved, but it has withstood the vagaries of the financial cycle with greater ease than the rest of Europe.

It has done so by changing practices gradually, such as pension reform and labour market reform … and a limited loosening of shopping hours. But it has not altered the postwar settlement that produced the first Wirtschaftswunder, the economic miracle. The German model is based on long-term planning and investment, not the get-rich-quick City culture that has been the norm in Britain and the US.

The president of the European Central Bank put it more diplomatically in a speech at Berlin's Humboldt university when he praised Germany for not basing its economic strategy on "cyclical, unsustainable factors". For that, read: not an economy that depends on a housing boom in order artificially to create wealth on the never-never.

Instead, the German – and broader northern European – approach emphasises vocational training and apprenticeships, particularly in engineering, manufacturing and the sciences. It invests in research and development, and in strong education. With all of the above the UK government would agree – even if its policies have for decades not followed the theory.

Where the Brits and the Germans spectacularly part company is over employment. "Works councils" have been the staple of German industry, with unions represented by statute. Both sides actively work towards consensus, and strikes and other disputes take place on the rare occasion where agreement is not reached. The first response to the banking crisis of 2008 was for the two sides to come together and work out a deal that included cuts in working hours, and cuts in pay – across the board. As a result unemployment rose only fractionally.

For Anglo-Saxon free-market diehards, these truths are difficult to take. They have resorted to denial and to aligning themselves with the puny flag-waving of the Europhobes, who were out in force in this week's rebellion against David Cameron, hardly an arch federast. On this morning's Today programme, Michael Gove talked about the UK taking back powers from the EU "in order to foster growth" – as if a little island mentality fosters prosperity. He made clear that European employment law was at the heart of British woes. That message might be more strident than that of Gordon Brown and his set when Labour were in government – but only in tone.

Now we are hoist with our own petard. Those free-spending, credit-bolstered years of bling are a distant memory. Cameron has learned one part of the lesson but not the other – the idea that successful economies depend on efficiency, for sure, but also on a buy-in from the broader community and a sense of fairness. That is not to say that Germany is a beacon of equality, or that their banks behaved like angels – far from it. But it is a matter of degree.

Behaviour is in part the product of systems and culture. German shareholder groups are ready to reward success but are far less tolerant of excess. Home ownership is regarded as a welcome step for people as they become older and establish themselves. It is not seen as a cash cow. And small and medium-sized businesses are seen as the engineer of growth, not an optional extra to the more "virile" financial services sector.

The Brits are beginning to get it, albeit late in the day. Nick Clegg, the deputy prime minister, has spoken of the need for diversification, for a realignment of the economy away from the City. Just how this is achieved, when banks refuse to lend, is not entirely clear. John Cridland, the director general of the CBI, has suggested the UK should seek to emulate the German approach to medium-sized enterprises. The trouble is, German firms established themselves long ago in competitive international markets. Britain's Johnny-Come-Latelys will struggle. They do already. Between 2000 and 2010, German exports to China were worth more than twice the value of Britain's.

Not all is gloom, and not all is straightforward. Many UK firms follow best practice, and I'm sure many German ones don't. After any amount of time in Germany, with its plethora of "socially aware" rules and regulations – the most annoying of which must surely be the obsessive refusal to jaywalk, even in relatively easy-going Berlin – I am eager to return to more anarchic and creative London life.

What is patently absurd, however, is to stick to old stereotypes. Germany is not about to take over Europe, no matter what economic harmonisation eventually follows this hopelessly muddled bailout of the Greek and other mismanaged economies. If the Conservatives wish to push Cameron towards a position of splendid isolation, if they wish to disparage Germany's resilience, they are perfectly entitled to do so. I suspect I know who'll have the last laugh. twitter@johnkampfner