Overcoming Brezhnev: in Germany, that is.

THE elections to be held in Germany on September 18 will act as a sizable pebble spreading ripples far and wide across the pond of world politics. The incumbent chancellor Gerhard Schroeder, a social democrat in power since 1998, faces Angela Merkel, a conservative. Polls in the run-up have given Merkel a lead between ten and fourteen points, but Schroeder is an experienced and unscrupulous campaigner who stops at nothing. Der Spiegel, the leading German magazine, has called him "the Great Manipulator." Again according to polls, a third of the electorate will make up its mind only at the last minute.

The winner faces the Herculean task of pulling Germany out of its current mess. The country is experiencing something comparable to the stagnation that Leonid Brezhnev imposed on the Soviet Union for no real purpose except to keep the system going for its own sake. Germany has overtaken the United States as an exporter; its economic troubles derive from bad law and regulation, and can therefore be remedied by someone with the right political will and skill.

Fear of what change might entail is the governing motive for stagnation. Such fear is grounded in the perceptions Germans have of each other, and that others have of them. Every German knows in his bones that people of other nationalities have only to look at him in order to think Hitler. The senior civil servant in the Interior Ministry once said to me that the German people will have to sit in sackcloth and ashes for the next 500 years. (A visit to the concentration camp of Buchenwald or Dachau is a hallucinatory experience, though, because busloads of German pensioners are usually on excursion there, chatting and laughing as they tour a site preserved for the very different purpose of reminding them of national shame.)

The attitude of the German elite remains one of clinging to postwar achievements out of fundamental mistrust of the people. Chancellors, and above all Helmut Kohl, have argued that membership in the European Union is the only way to tie down German expansionism. Egon Bahr, one of the most influential of postwar German foreign-policy makers, once warned me that Germany might well "go ape again." Prominenten of this sort make a point of apologizing for the past, laying wreaths and painfully prostrating themselves before memorials to Nazi victims. An ill-judged remark about anything to do with the war immediately ruins the career of anyone in public life. Nobody knew quite what to make of Schroeder's search for the grave in Romania of his father, a Wehrmacht soldier killed on the eastern front.

Many Germans naturally understand why the wartime Allies had to devastate their country as a prelude to liberating it. Sixty years of reconstruction have indeed been impressive. Outwardly, Germany looks as important and solid as it ought to be. City centers are bright and beautiful. Historic buildings like the Frauenkirche in Dresden, the Berlin parliament, and Frederick the Great's palace in the same city take their place once more in the landscape. The famous German respect for order is at work.

But quite as many Germans consider that they are victims more than victimizers. In general, intellectuals and artists have generated a sense of self-pity that corrodes the society. In this view, the ending of Nazism led to consequences quite as horrendous as Nazism itself, for instance the Hamburg and Dresden firestorms, the loss of Prussia, or the Soviet occupation of East Germany--all seen as Allied complicity in crimes morally equivalent to Nazism. In a recent bestseller, Uwe Timm tells the story of the brother he never really knew, killed in the SS somewhere in the east, with the clearly sympathetic implication that here was an unfortunate young man caught up in a process quite beyond his understanding. Similarly, refugees from Prussia publish well-received memoirs with the theme that their undoubted sufferings were gratuitous rather than the inevitable penalty to be paid for Nazism.

Successive chancellors resorted to welfare as a treatment for the self-pity in the national bloodstream. Bismarck invented the welfare state, and his successors have carried benefits and pensions and the granting of workers' rights to extraordinary lengths. This may have been valid in the early postwar years, but latterly the more people have received the more they have demanded. Germany is the most striking example yet of a rich country whose wealth is being used to make it unviable.

The figures come as a shock. Labor costs are about half as much again as those in the United States, with the result that about 5 million workers--some 12 percent of the workforce--are unemployed. To escape prohibitive costs, major companies such as Siemens and the truckmaker MAN have relocated to other countries, and even German banks, the backbone of the economy, have threatened to do the same.

On top of everything, the reputed economic success of the former East Germany was another Communist lie; its 17 million people have had to be bailed out in all respects. Reunification of the country has involved the transfer to the east of some $70 billion every year for the past 15 years--in the grimmer areas, unemployment is so high that the population dwindles and leaves. Mark Steyn has publicized the startling fact that one town had to install a smaller sewage system as there were no longer enough people to ensure the flushing of the main drains. Social-security outlays now exceed contributions from workers. The demographic deficit means that already there are not enough workers to pay the pensions of those who are retired. The national deficit is well above the limit set by the EU, and the economy stopped growing in 2002. The Economist was the first to call Germany "the sick man of Europe."

Self-pity prospers mightily in these circumstances, and as is only to be expected, it has also mutated into aggression, its natural counterpart. On the left, Schroeder's longtime rival, Oskar Lafontaine, has teamed up with the former East Germany Communist party, and will no doubt win votes on a platform that Brezhnev himself would applaud. On the right, neo-Nazis have done well in recent regional elections, taking about a quarter of the votes in a couple of former East German Lander.

Schroeder brandishes a plan, known as Agenda 2010, which he claims is a blueprint for future economic and political success, but his past attempts at even the simplest reforms have alienated his party and come to nothing. His is a program institutionalizing self-pity and immobilizing the country. Playing to the gallery, furthermore, he joined with French president Chirac in opposing the United States over Iraq policy, and hopes to pick up more demagogic popularity by declaring that the Iraq campaign is a proven failure and that Iran must not be forced to abandon its nuclear ambitions. In an example of German humor at its most hearty, a float along a street in Dusseldorf had an effigy of Uncle Sam with Angela Merkel coming out of its behind. By general consent, however, Schroeder did not get the better of her in a crucial television debate.

The intellectual and artistic elite loathe and mock Angela Merkel. True, her expression is usually flat, her hair is awkwardly cut, and for a 51-year-old she is a bit of a frump. Her husband, a distinguished professor of chemistry, stays in the background, and she has no children (which has prompted Schroeder's wife to accuse her of being unble to speak for women). But the real reproach of the leftists is that she isn't one of them as she ought to be, because her father was a Lutheran pastor who emigrated with his family to East Germany in 1954. At that date, such a move has ideology stamped all over it.

The young Angela grew up under Communism and joined its youth movement. She has a story about the Soviets stealing her bicycle. The Stasi secret-police records show that she and her father both refused to become informers. A dissertation on carbohydrates earned her a doctorate at the Berlin Academy of Sciences. When the Wall fell, Chancellor Kohl spotted her as an easterner willing and able to transform straightaway into a westerner. Calling her Madchen, he promoted her, but when he was caught in a scandal about illicit party funding, his Little Girl was the one who forced him out of politics and took over the party with the sort of ruthlessness she might have learned from the Communists. Self-pity is not her mode.

Not a natural campaigner, she talks technicalities about adjusting fiscal and social policies. Designed to make sure that there would never be another Hitler, the German form of proportional representation diffuses power, obliging even victorious parties to form coalitions that often cause nothing but deadlock. Single-mindedness of purpose, and great courage, are the prerequisites for overcoming the various inbuilt political and emotional obstacles to reform and change. Without some national form of perestroika, however, the whole German system threatens to implode as surely as Brezhnev's once did.

Many of Mr. Pryce-Jones's books, both fiction and nonfiction, touch on Germany. The latest is a novel, Safe Houses(forthcoming).