Germany's psychosis of defeat: a long-time admirer tells how Germany, like the United States in the 1970s, faces a profound crisis of confidence.

• Author: Fisher, Richard W.

Can Germany hold its own in the new world of a reconfigured Europe, an ascendant China, and a 21st-century America? Is German economic decline exaggerated? Or inevitable? These were questions I addressed recently at a meeting of Atlantik-Brucke, the German-American friendship organization.

The answer to the first two questions is "no." Unless it rapidly changes course, Germany cannot hold its own in the present world of a newly configured Europe, a rapacious China, and a flexible, highly adaptive American economy. German economic decline is, if anything, understated rather than exaggerated. And the decline of Germany's economy and Germany's role in the world is all but inevitable unless dramatic reforms are taken very soon.

How is that for a happy beginning?

POINT OF VIEW

I am a Texan. As you have seen from the actions of two Texan presidents, Lyndon Johnson and George W. Bush, we are blunt people. But, unlike my far more distinguished and accomplished brethren, I have a long involvement with, and genuine love for, Germany. To frame what follows, permit me a little personal history.

I was introduced to Germany by John McCloy. When I graduated from Stanford Business School in 1975, I was taken on as the assistant to Robert Roosa at Brown Brothers Harriman, the great private bank. Roosa was a giant of a man in international finance: he was also a generous man. As his assistant, I was immediately swept into his considerable circle of what we referred to then as his "world beater" friends. McCloy was one of them. Over lunches with Bob and the other partners at the bank, Jack McCloy would describe his work as High Commissioner after the War and his admiration for Konrad Adenauer and for the many successors he had known--every chancellor, right up to Helmut Schmidt who was in power at the time. McCloy told us, "Germany is the heart of Europe. It is the backbone of the European economy. No country in Europe is more important to the United States."

And he said, "Our alliance with Germany needs close attention, nurturing, and vigilance ... because its strength embodies profound advantages, while its weakness could involve far-reaching dangers and risks."

Otto Graf Lambsdorff, Germany's then-economics minister, and the other German leaders whom I met through Roosa were impressive men--they were indeed "world beaters"--and through them I came to understand how Germany had been able to claw its way back from the utter destruction of World War II to become what we considered to be the paradigm of industrial efficiency: a locomotive of global economic growth, a formidable member of the G6 (we only had six then), and a stout and fearless ally of the United States during the Cold War.

It was Roosa who sent me to Washington to be Mike Blumenthal's assistant at the U.S. Treasury Department, and through Blumenthal I was selected to participate in the American Council on Germany/Atlantik-Brucke Young Leaders conference in 1977 in Berlin.

I remember two things about that introduction to Berlin almost three decades ago. The first was the elevator in Axel Springer Haus: nothing more than a vertical conveyor belt, and riders risked life or at least limb if they did not jump off quickly on whatever floor they wanted. The other was a dinner with Richard von Weizsacker, who would later become first president of a reunified Germany. He took me on a tour of his office, and into the corner nook that jutted over the Berlin Wall. "Standing here, I hope you will understand the anguish that we Germans live with every day," he said. "We will never be a great nation again until we are united with our families in the East."

Indeed, I was there on the steps of the Reichstag as the clock struck midnight between October 2-3, 1990, when unification was celebrated. The delirious crowds bore torches and waved the German flag, celebrating what many had never dreamed would happen in their lifetimes.

Over the years and along the way, I had the privilege of meeting Chancellor Helmut Schmidt and watching him work both in Washington and Bonn and at the G7 summits with President Carter. Karl Carstens was a guest in my home when he came to celebrate the sesquicentennial of German immigration to Texas in 1986. On trips to Bonn I was the beneficiary of a few one-on-one blistering tutorials on German foreign policy (pre-Croatia) by Foreign Minister Hans-Dietrich Genscher. I sat in Chancellor Kohl's inner office in Bonn, heard the recitations of "Hoover Soup" and other deprivations and images he experienced after the war, and sensed first-hand his abiding...