Only a few months ago, the country appeared to be staring into an abyss. The Government was paralysed after inconclusive elections and the economy, Europe’s largest, was in recession with more than five million out of work, and the most powerful companies were awash with corporate sleaze.

Relations with the United States were at their lowest ebb after the war in Iraq, and Germany had been placed firmly in “Old Europe” by critics despairing at the EU’s stubborn refusal to modernise. It was, to put it mildly, a bit of a mess.

Yet this week the dubious title of Sick Man of Europe was handed, without great ceremony, from Germany to Italy, and in Berlin at least there was palpable relief. With chaos in Rome, a nervous crisis in Paris and with the Blair era drawing to a close, Germany is emerging as Europe’s rising star.

You feel the change in your bones, says 38-year-old Beate Lindner.

“We’re not the bottom of the heap any more and it feels good,” she says.

Frau Lindner, a single mother with a 14-year-old son, Martin, has had some lean years as a travel consultant, but now business is looking up. The Chinese are coming, the Americans have discovered German modern art as a tax write-off and the British and Irish want second homes in Germany.

Germans are abandoning their traditional pessimism and are becoming upbeat about their country. Pop songs burst with national pride. A new marketing campaign sells Germany as a Land of Ideas. The Berlin cityscape brims with shiny, metallic sculptures boasting of Germany’s greatest inventions: from oversized aspirins to huge adidas football boots.

The football World Cup, which takes place in Germany this summer, is the focal point of the country’s rejuvenation, the moment when rising national self-esteem merges with a cash bonanza and a quiet optimism. A German Pope and a German World Cup win, muses the bestselling psychotherapist Stefan Grünewald, would signal the rebirth of national self-confidence.

Preparation for the World Cup has become a national metaphor. Jürgen Klinsmann, the former Spurs striker who now manages the national squad, has side-lined Oliver Kahn, the grumpy veteran and national icon, and handed the captain’s armband to Michael Ballack, a midfielder of extravagant skill and film-star good looks.

So Germany has moved from defence to offence, from stolid experience to youthful innovation. The word is out: Germans do not have to win the cup this time round but the spectators want a bit more flair.

Whether Angela Merkel, the Chancellor, sees the national mission quite in those terms is unclear. She has gone on holiday (to Italy) promising to accelerate reform on her return. This is a decisive juncture. Germany is ahead of both France and Italy in the reform cycle.

Gerhard Schröder, her predecessor, began overhauling the welfare state three years ago, and paid the political price. His downfall came not through dramatic Paris-style street protests but rather in the drip-drip of regional election losses. His authority eroded like limestone.

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