A golden moment for Germany that may not last

By Gideon Rachman

Germany has a habit of winning the World Cup at symbolic moments. Victory in 1954 – captured in the film, The Miracle of Bern – allowed Germans a moment of pride and redemption after defeat and disgrace in 1945. A second victory in 1974 went to a West Germany whose “economic miracle” had, by then, allowed it to regain its status as one of the world’s most advanced nations. Victory in 1990, just months after the fall of the Berlin Wall, caught the joy and potential of a soon-to-be united Germany.

Now, in 2014, Germany has won the World Cup again – and once more at a symbolic moment. The past five years have seen Germany re-emerge as the leading political power in Europe. Britain and France may have the nuclear weapons and permanent membership of the UN Security Council. But the euro crisis has seen Germany emerge as the undisputed leader of the EU.

Even calling Germany the “dominant power” in Europe would have sounded unsettling a few years ago. But modern Germany has pulled off the unusual trick of being simultaneously powerful and popular. A BBC poll, carried out in 21 nations last year, suggested that Germany was the most admired country in the world.

While Paris feels like a beautiful museum, Rome is crumbling and London is overpriced and overcrowded, Berlin has emerged as a cool city, full of art galleries, clubs and exciting modern architecture from the Reichstag to Potsdamer Platz. It is also a city in which the young can still afford to live.

Once again, the German football team captures the mood of the moment. The sides of 1954 and 1974 were resented by some fans for defeating more stylish opponents – in the shape of Hungary and the Netherlands. The victorious German teams of 1974 and 1990 were praised for being “efficient” or “hard-working” – and lampooned for their ludicrous hairstyles. By contrast, the current German side is applauded for its flair and its sportsmanship. It is also the most multicultural team to represent the country in a World Cup final, reflecting the increasing openness of German society. Yet some of the old virtues remain. At its best, the German team does feel like a well-designed machine, with all the parts working together in harmony. It seemed fitting that Mario Götze, the scorer of the winning goal in Rio, is the son of a technology professor – and one of the two players in the team born in a united Germany.

But if all that sounds too good to be true, it probably is. Germany is undoubtedly going through a golden moment – on and off the football field – but there are reasons for fearing that it will prove all too momentary. Political leadership in Europe involves making choices – and those choices will inevitably be unpopular in many quarters. To paraphrase Trotsky on war, while modern Germans may not be interested in power, power is interested in them. So while the country has a positive image in the world at large, where its power is not yet felt, the euro crisis has seen Germany’s image take a battering in its own European backyard. The Merkel government’s insistence on economic austerity in southern Europe has revived old images of arrogant, unfeeling Germans. Asked which country they least wanted to see lift the World Cup, the Portuguese, Spanish, Greeks, Dutch and English all named Germany in their top two least favourite nations.

Berlin’s diplomats worry that the views of their government are out-of-tune with the public they are meant to represent

When it comes to Germany’s global role, the country itself remains deeply divided. The row over US spying on Germany has revived a latent anti-Americanism that was very visible during the Bush years. Indignation over snooping is understandable, but – among the German public – it seems to have spilled over into a refusal to choose between Russia and the west. A recent opinion poll, taken before the latest spying row, showed that more Germans think their country should maintain a policy of equal distance between Russia and the western alliance than opt for a pro-west strategy. That attitude alarms Germany’s Atlanticist foreign-policy establishment, as well as its eastern neighbours. German diplomats are worried that their government’s views are out-of-tune with the public they are meant to represent.

As long as Germany’s economy is humming along as efficiently as its football team, its EU neighbours are likely to be careful and polite about any reservations they might have about Berlin’s foreign policy. However, thoughtful observers within Germany itself are worried that the success of the economy is reliant on a number of advantages that will erode with time.

Germany has lousy demographics. Its fertility rate of just over 1.3 children per woman means that the country’s population is both ageing and on a downward trajectory. Recent moves to reduce the pension age for some workers will make this problem worse.

After years of domestic wage restraint, German workers are understandably pushing for higher pay. But that could erode Germany’s hard-won competitiveness. Meanwhile, German industry may be threatened by its reliance on exporting to austerity-stricken neighbours, even as China’s industrial firms move upmarket and attack the profitable niches that Germany has made its own.

Chancellor Angela Merkel, whose quietly impressive leadership has contributed a lot to the positive image of modern Germany, will be well aware of the challenges that lie ahead. But, along with the rest of the nation, victory in Rio allowed her a moment to pause – and relish Germany’s golden moment.

Copyright The Financial Times Limited 2014