The future of a devastated Germany was ambiguous at best; the French wished to partition off the Ruhr Valley and another plan envisioned a smaller, pastoral Germany of farmers and bed-and-breakfasts. But a year after Stunde Null, US Secretary of State James Byrnes took the train from Berlin to Stuttgart to deliver what became the defining speech of postwar transatlantic relations: the "Speech of Hope." Byrnes brought a simple, if unexpected, message: the US would provide massive support for Germany’s path to recovery. (…)
Some critics argue that there is a dearth of gratitude in Germany for America's monumental support for the country’s reconstruction. I think that gratitude is not only ubiquitous but a vital component of postwar German identity. Yet in recent years some Germans have forgotten what America is -- a land of diversity and debate, of writers and innovators, of checks and balances – and that it deserves a measure of confidence in turn.
Today there are more potential catastrophes facing the Western world than ever before; and no nation or organization is capable of effectively dealing with these alone. (…) Both Germans and Americans must question the current national preoccupations with inwardness and the day-to-day.

The Schröder era was not a complete wasteland. Otto Schily, the dour interior minister--a Green turned Social Democrat--was tough as nails and proved a serious ally for the United States and others. But the debate about Islamic terrorism during those years was mostly silly and irresponsible. Mathias Döpfner, the chairman and CEO of the Springer publishing company, wrote a searing column a couple years ago in which he argued that the German debate had been reduced to the goofy and lazy formula "Bush is dumb and bad." The events of the summer have at least gotten Germans' attention.

It's 1938, says the liberal columnist Richard Cohen, evoking images of Hitler's armies massing in the face of an appeasing West. No, no, says Newt Gingrich, the Third World War has already begun. Neoconservatives, who can be counted on to escalate, argue that we're actually in the thick of the Fourth World War. The historian Bernard Lewis warned a few weeks ago that Iran's president, Mahmoud Ahmadinejad, could be planning to annihilate Israel (and perhaps even the United States) on Aug. 22 because it was a significant day for Muslims. Can everyone please take a deep breath?

Germany's institutions have slid from virtue to vice: in politics, in the labour market, in education, in competition policy and elsewhere. It is not that the country has not tried to change. But most of these changes have been designed to optimise existing systems rather than change them fundamentally.

Many of its global companies have never been more competitive. With exports of nearly $1 trillion in 2005, this medium-sized country (smaller than the American state of Montana, but with 82m people) already sells more goods in the world market than any other. Investment and domestic demand are also picking up at last, so Germany's economic outlook at home, too, has brightened. (...) But the labour market does not seem to have turned the corner yet: in January, unemployment before seasonal adjustment again hit 5m, or 12.1% of the workforce. (...) Most importantly, if it [Germany] does not start tackling its structural problems in earnest soon, it may find itself stuck with something its people dread: amerikanische Verhältnisse, or "American conditions", code for a socially polarised society in which workers are hired and fired at an employer's whim. The risk is that Germany's labour market, in particular, will end up "Americanised", but without the good points of the American one, such as its openness and inclusiveness, argues Wolfgang Streeck, head of the Cologne-based Max Planck Institute for the Study of Societies.