With their familiar capacity to get to the surface of events and remain there, our media, in reporting on the State Department cables on Germany exposed by WikiLeaks, ignore an essential story—or, rather, two. The first is that some significant figures in the German political elite do not accept US claims to global leadership, and that this doubt is shared with large segments of German opinion. The second is that our foreign policy apparatus defends the nation against the consequences of this cosmic impiety by continuing (as we did in the cold war) to recruit eager informants and servants in Germany.

The Free Democratic Party (FDP) is the junior partner of Angela Merkel’s Christian Democratic Union (and its sister party, the Bavarian Christian Social Union) in the present German coalition government. During the negotiations last year to form the coalition, and afterward, the senior administrative assistant to FDP leader Guido Westerwelle was a frequent visitor to our Berlin embassy, which he supplied with news and transcripts of the negotiations. Multiply this dubious figure by twenty: our “friends” are everywhere in the German political system, and in the German media as well.

Encounters between our embassy and these Germans are reported as gossip, but no one has asked an obvious question. How valuable is the support of people so devoid of a sense of national dignity? Westerwelle, now the German foreign minister, is described in the cables in unflattering terms. Some of those negative characterizations come to our embassy from the nobleman (complete with castle) Karl-Theodor zu Guttenberg, who as defense minister in the coalition government is the rising star of contentless conformity and institutional drift in Germany. That Guttenberg said the German refusal to send more troops to Afghanistan was due to Westerwelle’s obduracy rather than the German public’s skepticism suggests that he is, among other things, a miserable informant. On that, the cables I have seen maintain a loud silence. They substitute gossip for serious analysis.

Meanwhile, practically unmentioned in American reporting, the striking news from Germany is not only that, were elections to be held tomorrow, Chancellor Merkel would lose; the coalition she leads has lost majority support. The surprise is the rise of the Green Party, which is now almost even with the Social Democrats. What accounts for the success of this once marginal and young grouping of environmentalists, feminists, pacifists and proponents of participatory democracy? Their voters are now in the educated middle and upper-middle ranks of German society, so they are hardly marginal. Neither are they so young. Their onetime star, Joschka Fischer, who was foreign minister in their coalition with the Social Democrats under Chancellor Gerhard Schröder from 1998 to 2005, is now an elder statesman. His generation’s heroic phase of concentrating their energies on street demonstrations is well behind it. Many in Germany, across class and educational divides, now share the Greens’ distrust of the obtuseness of the nation’s elites.

Two recent episodes express the change. Merkel’s government rescinded a previous decision to shorten the working life of Germany’s nuclear power plants. A shipment of nuclear waste from France induced thousands to converge in northern Germany at the storage site three weeks ago to proclaim their rejection of the technology. Meanwhile, in the conservative southern city of Stuttgart, capital of the rich state of Baden-Württemberg, stolid citizens have demonstrated against the demolition of an old railway station and the destruction of a treasured park—to speed up trains that already run thrice as fast as ours. The Greens are listened to when they complain that politicians are obedient primarily to bureaucrats and capitalists. National elections are scheduled for 2013, but next year the Greens may win the mayorship of Berlin and the governorship of Baden-Württemberg. If they overtake the Social Democrats, they may have the chancellorship.

However, Merkel and her allies cannot be counted out. She is a master of the qualities of caution and calculation she developed as a young scientist making her career in Communist East Germany, when she neither opposed nor supported the regime. Inveterately opportunistic, she has obliged her traditionalist party to champion the rights of women. Her Free Democrat allies have had to renounce the tax cuts they promised their wealthy voters. Merkel’s grand design is to appeal, by means fair and foul, to the German majority, which identifies with the welfare state.

I use the phrase “identifies” advisedly. The current bestseller Germany Does Away With Itself, by Thilo Sarrazin, denounces Third World and Islamic immigrants as genetically inferior. The author—a member of the executive board of the German Central Bank until controversy over the book forced his resignation—thinks Jews should be welcomed for their intelligence. In Germany, many combine xenophobia with adherence to an extensive welfare state, but they think of it as a unique product of their industriousness, and regard even their cousins from the former Communist East as not up to Western standards. Merkel exploits these sentiments. She opposes Turkish membership in the European Union and instructs immigrants to accept a German cultural model, even if not all of her voters read Goethe and Mann.

Merkel’s allies in the private sector—including sectors of the academy and media—urge class warfare from above by shrinking the German welfare state. They are obsessed by government deficits and warn that nothing threatens Germany so much as high wages. They compulsively deny the obvious, that German prosperity results from educational and social investment. Even so, Merkel has obliged them by stealthily exposing larger segments of society to economic risk and more inequality. Unemployment has diminished, but many of the new jobs are temporary and poorly paid.

Under Schröder, the Social Democrats (reluctantly joined by the Greens) cut the welfare state in Clintonian fashion. Now, out of office, they are struggling with second, and third, thoughts. Many of their leaders and thinkers are asking themselves whether they went too far in reducing the scope of social protection. Some even do so aloud. A return to fairness is the theme they count on to bring them back to power. They are deliberately ambiguous, however, on the issue of immigration. Only the Greens declare that integrating the large immigrant population is an economic as well as a moral and political necessity.

The Social Democrats are struggling to combine their attachment to the state as guarantor of social justice with the theme of more participatory democracy in economy and society. That is a theme the Greens master. The unions, meanwhile, are fighting for a decent living standard industry by industry, even as they recognize that they cannot survive as aristocrats of labor in a society in which the demands of the market are given priority over all other values. The Left Party, composed of former Communists in the east and dissident Social Democrats in the west, is stagnant and will in the end support a Social Democratic and Green alliance. The churches are often culturally retrograde, but they too are proponents of the welfare state.

Merkel’s room for maneuver is limited. If she champions social protection and welfare too openly, her party will drop her. If she leads an offensive against the welfare state, the electorate will dismiss her. So she has engaged in a large diversionary maneuver, casting herself as the defender of German economic rigor during the European debt crisis by initially refusing to support the economies of Greece, Ireland and Portugal with German funds. That put the European Union into economic and institutional crisis, and Spain is now threatened with insolvency too. The economic and social consequences of a disintegration of the Eurozone, not least for Germany, could be catastrophic, so Merkel has half retreated, but her government still refuses to contemplate a closer economic union.

Germany’s attitude to other Europeans is the pendant to its niggardly and restrictive policies toward its own extra-European immigrants. None of the US diplomatic cables from Germany that I read mentioned the evident upsurge of xenophobia and racism in their most open forms. The present German government is behaving immorally not because of its refusal to send more troops to Afghanistan but because it is calling frighteningly familiar spirits from the German deep.

The European Union, in the present turbulence, is totally incapable of assuming a geopolitical role independent of the United States. A new generation of German Green and Social Democratic leaders has yet to offer their nation and Europe a coherent alternative. Perhaps (unlike our own disappointing government) they can learn by doing.

They will first, however, have to win a series of state elections and then the national one.

The current polls are encouraging, but the absence of intellectual substance in much of the German debate is not.