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Springtime for Germany -- and North America?

Europe looks increasingly like it is stirring, like the awakening Brunhilda, from its torpor, and could gradually, tentatively, take up the aptitudes of intercontinental leadership of olden time. For America, it may indeed be time to learn something from Europe, but not the Europe whose emulation Barack Obama was urging four years ago.

The conventional wisdom as Europe continues to struggle with its debt crisis, albeit with less frenzied pyrotechnics than in most of the last 18 months, is that the old continent is laboring to retain any momentum for the grand European unitary ideal, launched and nourished with such euphoria just 20 years ago.

The same general opinion is that the United States, though its deficits are a serious problem, enjoys a comparatively vigorous economy and society, and benefits from all its historical advantages as a unitary political state, bound by its proverbially sacrosanct Constitution and the overwhelming preeminence of the English language.

As so often happens, the generally shared wisdom is very suspect. Greece is a special case, but is a relatively severely mismanaged country in a geopolitically under-endowed country, with a national economy no larger than metropolitan Baltimore, and a less industrious and skilled population. Europe can carry it or discard it.

The other troubled countries are recovering or doing the necessary to make recovery possible. And while cultural diversity remains both the strength and source of fragility of Europe, the central direction of the incipient recovery resides in Germany, the traditional heart of Europe, fought over by Luther and the popes, by Richelieu (through proxies), and Wallenstein, Frederick the Great and Maria Theresa, Napoleon and Metternich, the allies and Hitler, but preeminent when united by Charlemagne, Bismarck, and Helmut Kohl.

But the victory of Kohl and his successors, Gerhard Schroeder and Angela Merkel, has been the victory of generosity and the good example. Nationalities which within living memory fought with desperate bravery against German overlordship, were permitted by Kohl to pick Germany's pocket in entering the European monetary zone, and are now led by newly chosen national leaders with urgent mandates to roll back the welfare state. They no longer seek virtually to salary citizens and now require an adequately large number of people to work and provide affordable benefit levels for those in legitimate need.

Ireland never had the structural problem of the real PIGS; it had an impetuous banking sector which, when the bubble burst, lumbered the whole country with a termed-out debt bomb. It is working out from under the problems, and has reinforced incentivization of investment and productivity.

Portugal, Italy, and Spain have brought in new governments (with an ideological move to the sensible right in Iberia and the replacement of the preposterous Berlusconi with a non-partisan technocrat in Italy). All three countries are opening up labor markets and facilitating the hiring of youth and laying off of deadwood: the renovation of the labor force and reform of entitlements. These are Germany's requirements for use of the European Central Bank's (i.e. Germany and France's) credit to assist the distressed Eurozone countries.

The German experience under Schroeder shows that a short-term rise in unemployment will be followed by a sharp decline in unemployment, especially youth unemployment, as laws that rendered layoffs prohibitively costly and discouraged new hires, are revoked. The first step in addressing the debt crisis was to roll back spending, which is in itself deflationary and aggravates the fiscal damage, but reduces inherent government costs. The second step is tax and entitlement reform and liberalization of labour markets and the end of unionized sclerosis.

The genius of German leadership in this latest assertion of it is manifold: It is not Deutschland Uber Alles -- Germany is acting in concert with France, the continent's second economy. Germany spares itself the charge of unilateralism and French vanity, one of Europe's most conspicuous and longstanding political forces, is appeased. Germany is only asking others to make the sacrifices Germany itself has already made, and is showing the way, as the Euro is in large measure a Deutschmark.

So Germany speaks with the moral authority that comes from having been sold a false prospectus by these countries as they piled, chuckling, into the Euro, having overvalued their currencies in the conversion rate, and Germany's credibility is enhanced by showing great restraint in forswearing moral recriminations.

Germany has cut its unemployment rate almost in half, and held it there through these recessionary or sluggish years (its youth unemployment rate is lower than the overall U.S. unemployment rate), and 49.5 per cent of German GDP is manufacturing exports. In Germany, these are sophisticated engineered products, not simple and often low quality goods like Chinese exports, greased by cheap labor and an undervalued currency.

Chancellor Kohl promised a "European Germany and not a German Europe," and this has proved a valid promise. Germany has acted responsibly, forbearantly, and by example, exactly unlike its behaviour in previous periods of its ascendancy, when its aggressive behaviour plunged the world or at least its neighbors into the Seven Years' War, the Austro and Franco-Prussian Wars, and the World Wars. When these benign contemporary Germanizations are effected, all that will remain is for Europeans to resuscitate the continent's birthrate.

In the United States, this odd and interminable election campaign will reveal which way the country will move: either parallel to potentially resurgent Europe, as it liberates itself from decades of paying Danegeld to politically volatile industrial labor and small farmers; or backwards toward the social democratic morass that Europe is finally trying to escape.

The ambivalent Mitt Romney, emerging at last from the ludicrous run-past of evanescent challengers, each one moving the Romney weather vane slightly as he passes, is an advocate of tax reform and reduction, and a comprehensive assault on the deficit, including entitlement reform. The president remains wedded to concessions to organized labor, higher taxes on the most productive, and has said nothing remotely serious about the deficit or entitlements.

The tax, entitlement, education, medical care, and justice systems of the United States are all now largely dysfunctional. But energy imports and the current account deficits are declining, and the traditional strengths of the country, especially the motivation and talents of the work force, are unimpaired. The Constitution, of course, is in place, but the misgovernment of recent decades, the partisan gridlock and sterile ideological anathematizing that is unjustly dignified by the description "cultural wars," and the mediocrity of most of the leading politicians, leave room for doubt about how well the Constitution is now working.

This seems to be an era where unheroic political leadership in pursuit of relatively mundane goals is appropriate. It would be hard to be more uncharismatic than the East German physicist and daughter of a Lutheran Minister, Angela Merkel, but Willard M. Romney, former Mormon missionary and prophet, consultant and private equity banker, might just do it.

Europe looks increasingly like it is stirring, like the awakening Brunhilda, from its torpor, and could gradually, tentatively, take up the aptitudes of intercontinental leadership of olden time. The United States need not decline further, and is finally sloughing the shackles that geopolitically have severely hampered it for most of the last 20 years: cavernous current account deficits and the miring of most of its land forces conventional military capability in unremitting Near Eastern wars.

Upon the current election will depend only the timing of when the United States starts to get to grips with the problems that have diminished its stature in the decades since the First Gulf War. In January, or four years from January, a change of course will begin. America has declined, but a decline is not a slope, and even less is a slope a fall. It may indeed be time to learn something from Europe, but not the Europe whose emulation Barack Obama was urging four years ago. There is plenty of room for disappointment in America, but not for defeatism.

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