If the Paul Kennedy school of history is accurate (and in case it isn’t obvious, I’m currently making my way through The Rise and Fall of the Great Powers), then, essentially, economic power that could correlate to military power is one of the dominant characteristics of Great Powers through the ages. As long as it remains fungible, military potential backed by a strong economy is one of the surest markers of “Great Power” status.

But what happens when the two diverge? The United Provinces of the Netherlands come to mind as a predominantly economic power that gradually waned – for all its market innovations, there were eventual limits to its naval power (and it was, of course, perpetually vulnerable by land) – and perhaps the decline of Bourbon Spain, although its regression came both in economic and military prowess. Kennedy’s point is that the key lies not in absolute measures, but in relative ones, and so while these never became “poor” countries, per se, their neighbors and other rivals managed to grow more.

Which brings us to modern Germany: a paper tiger (or, as national emblems might have it, a paper leopard). Germany’s economy is, by all accounts, in pretty good shape, and certainly better than much of the rest of the West. And yet its military is decrepit, in worse shape than even the US Navy’s 7th Fleet. As Stars and Stripes reports:

New German capability gaps have been brought to light in recent weeks, piling up on top of old ones that Berlin has failed to fix.

Among the failures: none of Germany’s submarines is operational, only four of its 128 Eurofighter jets are combat-ready and the army is short dozens of tanks and armored vehicles needed for NATO missions.

In addition, troops are short on the basics: body armor, night vision gear and cold-weather clothing.

The situation is so dire that 19 helicopter pilots from Germany’s Bundeswehr were forced to turn in their flight licenses because of a lack of training time.

The reason: not enough helicopters for the pilots to fly.

Much like Japan’s “economic miracle,” protected solely by minimal “self-defense forces,” Germany has exchanged even the prospect of hard power for economic stability. But such a situation is likely untenable. It pains me to say it, but Ross Douthat wrote a decent piece in the Times.

The third German empire is a different animal altogether. Repudiating both militarism and racist mysticism, it has been built slowly and painstakingly across three generations, in cooperation with other powers (including its old enemies the French), using a mix of democratic and bureaucratic means. Today Germany bestrides its Continent, but German power is wielded softly, indirectly, implicitly — and when the fist is required, it takes the form of fiscal ultimatums, not military bluster or racial irredentism.

But still the system is effectively imperial in many ways, with power brokers in Berlin and Brussels wielding not-exactly-democratic authority over a polyglot, multiethnic, multireligious sprawl of semi-sovereign nation-states. And thinking about the European Union this way, as a Germanic empire as well as a liberal-cosmopolitan project, is a helpful way of understanding how it might ultimately fall.

Obviously, this oversimplifies – and exaggerates – the powers that Brussels holds. But it’s true that Germany has a…unique approach to fiscal policy, one at odds with most of the rest of the EU, and which nevertheless is one that’s been imposed on the other member-states. And ironically, that’s despite its relative military weakness, not because of it (although perhaps this dynamic is less surprising within the framework of the Atlantic alliance).

In so many multiethnic empires and society, the institution bridging ethnic, racial, and religious divides tends to be the military. It’s often when those forces collapse or disintegrate that so too do the borders of a Yugoslavia or an Austria-Hungary. Perhaps, if Germany continues to subtly insist on a continental economic mastery, it would do well to rebuild its own military institutions. And as long as it continues to lead the EU, turning the Eurocorps into something resembling, well, a corps might restart the long-stalled process of integration in more than a purely fiscal sense.

Germany can and will remain European, but if Berlin wants everyone else to identify as such, too, it will have to build more multilateral institutions than merely that of financial austerity.