Euro crisis firms German power, 25 years after Berlin Wall

 "We beat the Germans twice and now they're back," then British prime minister Margaret Thatcher reportedly said after the Berlin Wall fell in 1989, expressing her fears a reunited Germany would grow to dominate Europe, AFP reports.

Fast forward to Athens in 2012, at the height of the eurozone crisis, and that domination appeared to have come to pass.

On a trip to debt-wracked Greece, German Chancellor Angela Merkel was mocked with Nazi imagery amid hostile riots against what was seen as a crippling austerity effort imposed by all-powerful Berlin.

Twenty-five years after the Wall fell, analysts have little doubt that Europe's power now lies in Berlin, rather than Brussels, Paris or London, with the damaging eurozone crisis only heightening that perception.

"Before the Wall came down, Germany was kind of at the border of Europe. Now, it's at the centre of Europe in a geographic sense, an economic sense, a political sense," said Karel Lannoo, director of the Centre for European Policy Studies in Brussels.

"It's the powerhouse of Europe. During the financial crisis, we saw that the place that matters most in Europe is Berlin, not Brussels.

"Of course, in Brussels, they sit together and try and find a consensus. But the decisions are taken in Berlin," Lannoo told AFP.

  Thatcher 'rather prescient' 

 A quarter of a century after that historic Berlin night as the Wall, symbol of a divided Germany, came down, the reunified country has established itself as the undisputed economic giant of the European Union, accounting for more than 27 percent of the eurozone's output.

And given its economic weight, Germany was called upon more than any other country to bail out eurozone debt-hit nations to save the single currency bloc from collapse.

Wary of angry German voters, Merkel was initially reluctant to put taxpayers' money behind a bail-out fund seen as vital to shore up confidence in the euro, earning her the soubriquet "Madame Non."

But she gave way, eventually pledging German backing for a financial firewall to protect weaker states but leading a group of smaller, mainly northern European countries in demanding stricter budgetary surveillance and unpopular austerity measures.

Hans Kundnani, from the Berlin-based European Council on Foreign Relations, told AFP that the euro crisis showed that Thatcher was "rather prescient."

"Since the beginning of the euro crisis and the debate about German power in Europe that has ensued, the consequences of the fall of the Berlin Wall 25 years ago look very different than they did on the 20th anniversary in 2009," he said.

"In the light of the euro crisis, we need to re-assess the consequences of German reunification."

Nevertheless, analysts are also keen to point out that Germany's strength stems from its recent economic success -- a far cry from the turn of the Millennium when it was seen as the "sick man" of Europe.

Berlin's current dominance of Europe is "probably temporary," said Lannoo, pointing to Germany's "long-term economic problems", notably its rapidly shrinking population and low birth rate.

Lannoo also noted that the current economic weakness of France -- with a stagnant growth rate and sky-high unemployment -- made the traditional Franco-German motor of Europe particularly lop-sided.

   'Take more responsibility' 

 Ironically, while the euro crisis solidified Germany's role as the dominant player in Europe, many complain Berlin is too reluctant to lead, mindful of its bellicose history.

One of the most memorable appeals during the euro crisis came from Polish Foreign Minister Radoslaw Sikorski, who said the biggest danger was not German aggression, but German passivity.

"Germany must not dominate Europe, but it must (also) not demonstrate any less strength of leadership in reforms," he said.

"I fear Germany's power less than its inactivity," said Sikorski, whose country's invasion by Nazi Germany in 1939 sparked World War II.

In terms of foreign policy, Germany is seen outside Europe as the dominant power -- Merkel has spoken to Russian President Vladimir Putin during the Ukraine crisis more than any other leader -- but within the bloc, it is sometimes seen as too reluctant to play its part.

Whereas France has flexed its muscles, notably being among the first to take part in US-led military action against the Islamic State jihadists, Germany has held back.

"The big problem that we have today is that Germany is extremely reluctant to take high-profile engagements on the world scene and it stops Europe from doing it if it doesn't agree," complained Lannoo.

"Germany has to take more responsibility on the world stage."

However, Germany expert Constanze Stelzenmueller, from the Washington-based Brookings Institute, said Berlin's reluctance was waning, pointing to recent decisions over the Ukraine and Syria crises.

"If anyone had told me half a year ago that Germany would be doing stage three sanctions against the Russians and delivering weapons to the Kurds, that would have been completely unimaginable," she said.

"I think the Germans are now putting their money where their mouth is. I think this is a very real shift."