This has been a week for the German chancellor Angela Merkel to forget.
She arrives in Brussels for yet another crisis summit. The Italian prime minister, Mario Monti, stages an ambush at around the same time Mario Balotelli was heading in his first goal against Germany in the Euro 2012 semi-final in Warsaw.
The German version of the outcome of the summit is that the chancellor lost the battle to stave off the demands of a rapacious southern Europe.
As Der Spiegel put it: “Now, she will travel in defeat back to Berlin.”
The Germans have agreed in principle to a break in the link between sovereign and bank debt. The European Stability Mechanism will be allowed to lend directly to recapitalise banks without increasing the debt of the sovereign state in which the bank is based.
There is also acceptance that emergency action should be taken to bring down the spiralling borrowing costs of Spain and Italy.
The conventional wisdom is that Europe has pulled back from the brink.
But for Merkel, the real heavy lifting must begin. She must begin the task of bringing her electorate on board while facing down prominent opponents of moves towards eurozone debt mutualisation or burden sharing within her own political movement, the Christian Democratic Union, and its sister party, the Christian Social Union.
The mood in Germany has shifted dramatically in recent years. Scepticism towards the euro and indeed Europe, in general, has grown.
While opinions have hardened since 2008, when the full scale of the financial and economic implosion in Europe’s periphery became apparent, in truth, the seeds of German euroscepticism began to be sown following German unification.
The burden of integrating East Germany proved to be far greater than expected. It plunged the country into a long recession following a brief boom and exhausted reserves of generosity in affluent West Germany. Middle-class German contempt for the so-called “Osties”, or East Germans, and their dependence on handouts was a precursor of things to come.
Germans looked on as the Irish, Greeks, and Spaniards gorged on cheap credit, much of it originating in thrifty Germany. Gradually, nostalgia grew for the old national hard currency, the deutschmark.
Older Germans talk of their affection for a currency whose value would hold firm.
This attitude has spread among the elite and it is expressed most trenchantly at the headquarters of the German central bank, the Bundesbank.
There is now widespread agreement on the need to ensure that further moves towards European fiscal union and financial burden sharing are underpinned by a referendum.
The role played in this regard by the German Constitutional Court should not be underestimated.
Any German leader inclined to sign away funds out of the national coffers faces an array of challenges, both legal and political.
Bundesbank chiefs are famously austere. Its current head, Jens Weidmann, is no exception.
Like an all-year-round sea swimmer, Weidmann takes perverse pleasure in the bracing virtues, rarely missing an opportunity to stress the need for austerity.
He is the mirror image of Paul Krugman, the US economist darling of the Keynesians and social democrats.
At 44, Weidmann is the youngest head of the Bundesbank ever. Perhaps, he feels a need to prove himself.
His predecessor and former boss, Ernest Welteke, has questioned his suitability for the job.
Up until last year, he served as Merkel’s economic adviser. But now he threatens to become a thorn in her side.
In the run-up to the summit, Weidmann has been dashing out opinion pieces.
Writing in the Austrian paper, Der Standard, he warned that “debt unions would delay reforms in Europe” and he dismissed suggestions the ECB, on whose governing council he serves, should be more accommodative in order to assist struggling euro member states.
“It is especially irritating that some governments shamelessly push that monetary policy cleans up after fiscal policy and solve the problem with the printing press.”
He barely bothered to hide his contempt towards the Greeks, warning that “if Athens does not keep its word, the consequence is that fresh aid will disappear”.
One can almost sense a curling of dismissive lip in such comments.
But few question his importance in the scale of things. He is viewed as a key power broker to whom the chancellor still resorts for advice.
He is renowned for his networking abilities and has insisted he will not follow his predecessor, Axel Weber, who resigned in protest at moves by the ECB to purchase the debt of struggling EU nations.
Writing in the Financial Times this week, he was anything but apologetic when it came to the role of central banks. “Having conquered inflation in the past decades, central banks are making a substantial contribution to combating the financial, economic and sovereign debt crises.”
Breathtaking stuff. ‘Conquered inflation’? The biggest asset price bubble in history between 2000 and 2008, across much of Europe, presided over by the ECB.
This gives one insight into the mindset of an individual lacking in any sense of regret, individual or collective.
He does acknowledge the scale of the problem, accepting that the crisis is “exceptional in scale and scope”, but cautions of the need to “ensure that by putting out the fire now, we are not unwittingly preparing the ground for the next one”.
“The medicine of a near-zero interest rate policy combined with large-scale intervention in financial markets does not come without side-effects — which are all the more severe, the longer the drug is administered.”
The desire of the Germans to protect their own position against the effects of fiscal and financial irresponsibility elsewhere in the eurozone is entirely understandable.
Germans have good reason to be aghast at the shenanigans of politicians like Italy’s ex-prime minister, Silvio Berlusconi. and at the sense of entitlement among elites in the public and private sectors, not least in Ireland.
But some of their economic leaders appear intent on repeating the mistakes of an earlier German chancellor, Herr Bruning — his austerity policies paved the way for Hitler.
The current fiscal crackdown has unleashed social conflict and merely fanned the flames of financial market uncertainty.
As the euro has moved to the cliff-edge, it has been easy to forget that the eurozone actually has a positive trade balance with the rest of the world.
What has really alarmed investors is the degree of division apparent between European nations that has emerged after four grinding years of austerity economics that have seen unemployment rise to levels not witnessed since the 1930s.
Within Germany, the consensus in favour of austerity has become steadily more frayed.
The chairman of the opposition SPD, Sigmar Gabriel, has warned against repeating the Bruning errors and, indeed, many within the German elite, particularly the business elite, have expressed deep concern about the likely impact on Germany of an implosion of the euro.
The prospect of a grand coalition between Merkel’s CDU-CSU and the SPD following next year’s elections is very real and could signal real change.
But equally it cannot be denied that Weidmann is representative of a very strong strand in German thinking.
It is one that is nostalgic for a past when Germany had a strong currency and inflation was reined in.
But the emergence of the deutschmark, as a result of currency reforms at the end of the 1940s, was itself underpinned by aid under the Marshall plan from a US whose statesmen recognised that their predecessors had erred in starving the Weimar Republic of support in the 1920s.
The financier George Soros this week warned of the imminent danger of the collapse of the euro and has called for a Marshall Plan for southern Europe.
As Europe’s democracies fray at the edges and its vulnerable economies seize up, more people within the so-called creditor nation bloc, which is led by Germany, may start to realise that solidarity, when implemented with suitable safeguards, is actually good for business.
Jens Weidmann, the austerity advocate, may yet have to find a different pitch.
* Born: 1968. Solinger, North Rhine Westphalia.
* Education: Phd. University of Bonn.
* Career: Intern, Banque de Paris; National Bank of Rwanda.
1997-99: Employee, IMF.
1999-2004: Secretary, German Council of Economic Experts.
2006-11: Head of Economic and Financial Policy Division, Federal German Chancellery.
2011: Head of Bundesbank. Member of ECB Governing Council.
* Other: Chief German negotiator at G8 and G20 summits.