As German Chancellor Angela Merkel currently works out how to steer the euro out of its current troubles, there are profound consequences for the UK in another policy area where Germany has a pivotal role, namely the energy markets. In March of this year, Merkel announced her monumental political U-turn over the future of the country's nuclear power programme.
As recently as last year, the conservative and liberal coalition was paving the way for extended running times for German nuclear plant - as a 'bridge technology' to give time for deployment of renewables. But Fukushima changed all that. In the face of massive public opposition to nuclear, a policy about-turn will now see an accelerated phase-out of nuclear in Europe's biggest economy, with the last plant shut down expected in 2022.
Comments made this week by Siemens CEO Peter Löscher are perhaps a measure of Germany's appetite for change. Siemens, the German engineering conglomerate, worth almost €103 billion, has announced its plans to pull out of the nuclear energy business. Löscher cited the Fukishima nuclear disaster as the driving force behind the company's decision, saying; "The chapter is closed for us; we will no longer be involved in managing the building or financing of nuclear plants."
Not quite closed it seems. In May Siemens was ordered to pay €648m to its former French partner Areva as compensation for the German's early exit from their nuclear joint venture. At the time, Siemens was understood to be in discussions with Russian state nuclear energy giant Rosatom over a possible joint venture. All of which might now be thrown into doubt with Siemens announcement.
In a barbed comment aimed directly at the Obama administration, Löscher also argued the US would do well to increase its exports of 'real engineering' as opposed to 'fiscal engineering'. And when Siemens talks of real engineering, it is perhaps thinking of renewable energy - the nice sort that doesn't involve splitting atoms.
Indeed, Löscher said Siemens would increase its work in the renewable energy sector, claiming that Germany's shift towards renewable energies is the project of the century. He claimed Germany was well on course to achieve its target of producing 35 percent of its energy from natural power sources by 2020.
Certainly, the expectation is that the huge gap in capacity in Germany created by the nuclear shutdowns will be met entirely from renewables. Germany has led the way in recent years in state subsidies through feed in tariffs, with renewables already accounting for somewhere around 20% of power generation capacity. That compares with around 7% here in the UK currently.
And there does seem to be all party support amongst Germany politicians, including the conservatives who were erstwhile nuclear enthusiasts. So it's hard not to conclude that Germany is likely to remain a nuclear free zone, regardless of whether Merkel remains Chancellor after the 2013 elections.
This is set to make Germany a magnet for investors keen to build a stake in the German renewables sector, and the country is likely to leverage its renowned engineering ability to create new markets for its domestic manufacturers, who in turn can be expected to export to the rest of us. We're starting to see this at Martineau, where renewable developments our clients bring to us are frequently coming with a 'made in Germany' tag on some aspect or other.
This is a real challenge for the UK and our own manufacturing sector, where policy initiatives have in recent times been too often kicked off track by the Treasury, creating an uncertain investment environment for companies and investors looking for relatively safe returns for their cash. Solar feed-in tariffs and Green Investment Bank borrowing powers are two obvious examples, but the tax-grab that used to be a revenue neutral market trading mechanism (the CRC Carbon Efficiency Scheme) is another.
Whatever you think of Angela Merkel, on the nuclear issue she's been decisive (alright, for now, until the next U-turn), and it would appear the biggest industrial power in Europe is backing her decision. When it comes to renewables and the broader climate change agenda, it's very difficult to detect a similar level of consensus from our own coalition government and the wider UK population.