A crisis at the top of Germany’s ruling conservative Christian Democratic Union (CDU), which triggered last week’s downfall of Angela Merkel’s choice of successor as chancellor, has put new life into an old conundrum: what does Germany want?

This was the question pondered by Benjamin Disraeli as he contemplated the rise of Bismarck’s Second Reich. It exercised Neville Chamberlain and Lord Halifax in the 1930s. Now it’s being asked again, this time by the German people themselves.

The reasons for this re-evaluation are many: a “golden decade” of economic growth may be ending. The EU and the eurozone, hugely beneficial constructs for Berlin, lack vision and confidence. US-Europe strategic ties are fraying. Merkel’s reassuring presence will soon be lost.

Germany, regarded since reunification in 1990 as a steadying influence at the heart of Europe, is entering a new epoch of uncertainty just as pressure grows for it to show a lead. Post-war shibboleths are crumbling. And the banished ghosts of the far-right are re-emerging from dark and dusty attics.

The rapid rise of the nationalist-populist, anti-immigrant, Islamophobic Alternative for Germany (AfD) reflects this plunge into unaccustomed unpredictability. Founded in 2013, by 2017 it had become the main opposition party in the Bundestag. It holds seats in all 16 state parliaments.

Merkel’s CDU and its coalition partner, the centre-left Social Democrats (SPD) have, until now, mostly observed an unwritten rule: no cooperation with the AfD. Such ostracism is rooted in memories of how Hitler’s Nazis rose to power.

That’s changing. Last week’s crisis arose after CDU leaders in Thuringia broke the taboo, joining with the AfD to pick the state’s governor. In doing so, they defied the party’s national leader and Merkel protege, Annegret Kramp-Karrenbauer.

Merkel condemned the manoeuvre as “unforgivable”, and the deal quickly unravelled. But the damage was done. The AfD and its unsavoury local leader, Björn Höcke, were jubilant. Mocked and mortified, Kramp-Karrenbauer quit.

Her departure creates a power vacuum that CDU right-wingers such as Friedrich Merz will try to fill before federal elections due next year. Given that the CDU and its Bavarian sister party command only 28% support nationally, more pacts with the AfD could be unavoidable.

In fact, despite the Thuringia furore, recent research suggests CDU-AfD collaboration is already happening in 18 municipalities. This is recognition of a grim political reality: if the CDU is to remain relevant, it may have to abandon Merkel’s moderate conservatism and shift right, or risk being outflanked.

As in Britain and France, the collapse of the traditional centre-left, illustrated by the SPD’s paltry 13% national rating, makes a rightwards lurch more probable. Perhaps the Greens may provide a viable coalition alternative. But the danger is clear.

Talk about the end of parliamentary democracy and a return to the Weimar era is exaggerated. It’s obvious a political realignment is overdue. Divided German voters are fed up with politics-as-usual and want something different. But what?

It’s only fair at this point to turn the question around and ask: what does Europe and the world want from Germany? In a week that marked the 75th anniversary of the Dresden atrocity, this is a fraught subject. It could prove a classic case of be careful what you wish for.

French president Emmanuel Macron wants German backing for his ambitious plans for a more integrated, more strategic, more militarily formidable Europe that can hold its own with the big beasts, meaning China, the US and Russia.

Divided German voters are fed up with politics-as-usual and want something different. But what? Simon Tisdall

Merkel has reacted cautiously. But there have been tentative steps in Macron’s direction. Last week, the Bundestag voted to fund a fighter jet project jointly with France. There is renewed talk of a European army, drawing on the existing Franco-German brigade. Kramp-Karrenbauer, who remains defence minister, favours a raised military profile and higher defence spending. “The need for Germany to become more involved out of its own interests, to develop the will and ability to make a greater contribution, has become even more pressing,” she said last week, talking about Brexit’s impact.

How the rest of Europe would react, in practice, to a major expansion in German military capabilities and leadership is a moot point. Poland, for one, might have serious reservations. So, too, ironically, might the French. The US would certainly not welcome it, if the focus was on building European rather than Nato capacity.

What the US wants from Germany presents another conundrum. Donald Trump has demanded Merkel cancel the Nord Stream 2 gas pipeline project with Russia and renege on the Iran nuclear deal. He seems to personally resent Germany’s manufacturing prowess and dismisses climate concerns.

Yet appeasing Trump would put Germany at odds with Vladimir Putin just as pressure grows to repair Europe’s relations with Moscow, not least because of rising transatlantic tensions. It would also undermine efforts to strengthen an EU foreign policy.

Authoritarian China, an ever more important trade partner which the EU nevertheless terms a “systemic rival”, poses a quandary too. Whether Germany should take the lead in a new Europe-China strategic relationship to offset US protectionism and isolationism is another question Merkel has left hanging.

Germany will assume the EU council’s presidency in July, meaning it may have a bigger say than usual on all these issues, including a post-Brexit trade deal. Yet the timing could not be worse.

At a time when many in Europe want its most powerful, wealthiest country to abandon its post-war policy of cautious reticence and give a forceful lead, Germany is looking inwards, struggling once again to decide what it wants, and how to avoid the mistakes of the past.