Philip Hensher: Germany doesn't want to dominate Europe – that is part of the problem

In every respect, German culture remains unfamiliar to the British. The cultural gap has only one popular point of understanding, the Third Reich

Last week was the 50th anniversary of the construction of the Berlin Wall; the night when, without warning, bales of barbed wire were put up dividing the American, French and British sectors of Berlin from the Soviet sector, followed by the Wall, the "Anti-Fascist Protection Barrier", itself. Three days later, a former citizen of the DDR, Chancellor Angela Merkel, headed off to Paris to see what could be done about the current eurozone financial crisis, in discussion with Nicolas Sarkozy.

The two facts might seem to have nothing to do with each other. The Wall is 22 years in our past now. Despite what everyone feared in the 1990s, the crisis has come, not from the bankrupt East, but from the profligate South. But the German mind entered into the summit chamber, shaped by its history and national experience. Its limitations accounted for the failure of nerve, and the resounding vote of no confidence delivered worldwide.

The key point which Angela Merkel extracted from the meeting was the imposition of the so-called "Schuldenbremsen", or "debt-brakes". Requiring a balance between deficits and surpluses over the course of an economic cycle, Germany introduced its own Schuldenbremsen in 2009, passing an amendment to its constitution to do so. The aim is to limit the extent of deficits by legal, constitutional means. It is a drastic measure. Debt brakes enshrine a principle easy to understand, and to translate into personally meaningful terms – you can't, over a long period, spend more money than you earn. They are highly popular with electorates. They are, therefore, highly popular with many politicians, too, who see that they are not likely to be very effective in a crisis, and yet raise their own reputations for financial probity.

So Angela Merkel went to Paris with the prospect of addressing the sovereign debt crisis, and emerged with the aspiration that all 17 countries in the eurozone should enshrine debt-brake clauses in their national constitutions by mid 2012. Obviously: it won't happen, and if it were ever to happen, the rule would carry no real force. The Finnish finance minister, very sensibly, observed in his laid-back way that "on debt, I'm not too excited about writing anything into constitutions. Rarely do such targets, carved in stone, work". Der Spiegel bluntly called it "The Great Debt-Brake Swindle".

However, some British commentators, absurdly, suggested that the accord marked the start of a new era of German domination in Europe. The "true economic government" of the eurozone that Sarkozy and Merkel rightly advocated at the summit, reflects, Simon Heffer crudely warned, Berlin's desire to achieve the conquest of Europe that Hitler failed to achieve militarily. "Welcome to the Fourth Reich," Heffer wrote.

Yet, far from this, Merkel's refusal to provide strong leadership to demand the much closer fiscal integration that monetary union requires, and effective, German-led control, shows how deep-ingrained is the German political classes' instinct against leadership beyond their national borders. The limits of German international ambitions are these, it often seems: just to set a good example. Merkel could have taken decisive steps to deal with the colossal communal debt in the form of eurobonds. Instead, she emerged with a piecrust principle, easily made, easily broken. It was high-minded, and not much more. The financial markets made it plain in the days that followed what they thought of it.

And somehow, even as we see the objective need for German leadership in this crisis, we just don't love the Germans. It must be hard for them to see exactly why. Germanophiles like me have a lonely time of it, sharing our holiday snaps of Thuringia and tales of nights out in Bamberg with only a selected few. In recent years, more people have started to discover Berlin as a cheap, bohemian destination, though the city stands outside the mainstream of Germany. In almost every other respect, German culture – books, food, manners – remains unfamiliar to every British person.

Student numbers learning a foreign language have been in decline for years, but the numbers of those studying German are in freefall. As Bernard Levin was fond of remarking, a hundred English readers tackled Proust for every one who took up Buddenbrooks.

This cultural gap has only one popular point of understanding, the Third Reich – you learn about that in school, even if you don't learn a single word of the language. That isn't going to help anyone understand the German mindset. Twice in a generation, the Germans have carried out a grand national act of sacrifice for the sake of others.

In the first case, after the fall of the Berlin wall, West Germany took on the colossal burden of the DDR – it was not done well in all respects, and large parts of the East are still severely depressed. But how easy it would have been to have stuck to the received wisdom among statesmen after November 1989, and agree that unification must be many years away. The second was the sacrifice of the most successful currency in history, the Deutschmark, for the sake of the European currency. Just what the German public now thinks of that idealistic decision is all too clear. Clear, too, is their belief that what is good for Germany ought to be good for Greece: that, for instance, the German pathological dread of personal debt could or should be enshrined in the national constitution, then forcibly exported, then enforced. What is not clear is anyone's belief that they, as Germans, should be in a position to exert leadership over others.

The long German nightmare of life as two client states will take time to shake off. Something that will probably never disappear is the black nightmare of authoritarian leadership and empire which lasted through both the second Reich, and the third. History reaches out from the billion-mark banknotes of the Weimar republic, and gives the individual German a memory which will always shape his attitude to debt. But most of all, talking to Germans, one realises that even the political classes shrink away from their own leadership beyond their borders. Wild talk of the "Fourth Reich" is so peculiar, because it is exactly the fear of being too authoritarian that leads to half-solutions and unworkable ideals like Tuesday's agreements.

What would a Europe led by Angela Merkel look like? Why should anyone be so afraid of it? Are the Germans still in the same mindset as 1990, when further European integration was supported in the country, not so much as an opportunity to direct Europe from the front, but as a chance to control Germany, as a German friend of mine put it at the time, "to save Germany from itself?" Since the Second World War, the principle guiding German politics has been this: to set a good example. The moment may have come when good principles and good examples are no longer enough.