After the game, the chancellor came into the changing room and embraced Ozil. "It wasn't easy for you," she said.

Why did Merkel seek out the soccer star with the immigrant background? Far from representing the "failed multiculturalism" that Merkel derided in a speech last weekend, Ozil is the model example of immigrant assimilation that Merkel sees as Germany's future. He is the son of a Turkish "guest worker" but has been going to German soccer classes since age 6; he speaks fluent German, has become a German citizen, and has a German girlfriend who has converted to Islam. For Americans, this type of integration may not seem out of the ordinary: you come to the United States because of its prosperity and its rule of law; you swear loyalty to the U.S. Constitution; you stand with America against its enemies, on the soccer field or the battlefield. But the evident frustration in Merkel's voice in her recent speech underscored that Germany has struggled to translate this type of integration auf Deutsch.

Indeed, Germany has little tradition as a welcoming home for immigrants. With no significant colonies, it had no tradition of assimilating foreigners. For 12 intense years in the middle of the 20th century, Adolf Hitler's Third Reich made a murderous ideology out of hostility to foreigners. It was only starting in 1955 that West Germany, squeezed by manpower shortages, began striking deals with southern European countries -- Italy, Spain, Greece, Turkey, and Yugoslavia -- to supply cheap workers. But these Gastarbeiter were given only short-term contracts and otherwise cast out of mind.

Of course, many of those workers ended up staying in Germany. Discomfited Germans responded by pretending that the foreigners didn't exist; they were banished to grubby dormitories on the fringes of cities and bused to the steel mills or car factories where they worked. Later, when they were joined by their wives, they moved into the rundown sections of inner cities. There, the Turks in particular began to develop a parallel economy, setting up grocery shops, halal butchers, cafes, and mosques that catered to their own.

Grudgingly, the German political class accepted in the 1980s that it had a problem. The birth rate of native-born Germans was dipping, while the Muslim families in their midst were expanding. It's here that Multikulturalismus was offered as a solution: Ethnic communities would be encouraged to coexist with the Germans. But that's not to say they were given a German passport -- citizenship was still reserved for those who could demonstrate the presence of German blood in their family tree. And it was only with German citizenship that you could become a Beamter, a civil servant. So there would be no dark-skinned police officers and no Turkish schoolteachers. Germany's multicultural bargain of the 1980s involved allowing immigrants to enter society while retaining the integrity of their own culture. The government would not bestow the rights and responsibilities of German citizenship, and the immigrants could lead their lives in Germany while preserving their ties to their home countries.

The result was supposed to have been a great carnival of cultures, the introduction of color into a monochrome society. But it proved a failure.

The immigrants continued to quietly keep to themselves. In retrospect, the very absence of the sorts of race riots seen in Britain and France should have been seen as a foreboding sign: The expectations of German immigrants, denied citizenship, simply weren't high enough to inspire anger against their government. The first- and second-generation Turks may have been content to save enough money for a house in eastern Anatolia where they could spend their old age. But the third generation of Turks, who came of age in 1980s and 1990s and only knew Germany as a home, began demanding more from the state. When all they seemed to receive in return were welfare payments, discontent rose both among immigrants and among German citizens. Germans resented what they saw as a permanent dependent class; Turks pointed to systemic discrimination and cultural exclusion.

That was the beginning of the end of the supposed multicultural idyll. Merkel may have pronounced multiculturalism dead on Oct. 16, but in truth the spirit has not registered a pulse for most of the last two decades. The failure of Multikulti has been clear for years; at the latest, the 9/11 attacks put it into stark relief.

A left-leaning Social Democrat-Green coalition government started to overhaul the country's outdated immigration laws in the late 1990s. But by 9/11 -- plotted out of Hamburg -- there was little enthusiasm for a liberal reinvention of the immigration problem. A 2005 law accepted that immigrants were not always short-term residents, but put most of the onus of integration on the incoming foreigner rather than on German institutions. Deportation rules were tightened, and the children of foreign parents who had been working legally in Germany were encouraged for the first time to apply for German citizenship. Yet these concessions did little to calm native Germans. Their perception was that immigrant areas were developing at odds with the German mainstream into "parallel societies." Marriages were arranged (often between German-born Turks and traditionalist villagers in Anatolia); brothers carried out "honor killings" on their sisters for allegedly disgracing the family or the faith; radical preachers were enlisting young disgruntled men in jihad; and drugs were being stockpiled and sold.

The late-arriving prophet of this Age of Anxiety -- and the reason why Merkel has now belatedly entered the debate about multiculturalism -- is a maverick former central banker named Thilo Sarrazin. His new book, Germany Is Abolishing Itself, argues that the strong Turkish and Arab birth rates will lead to the dumbing down of Germany. His message has struck a chord among a middle class fearful of declining educational standards and among unskilled workers who are nervous about lower-paid immigrant competition. The political class had mostly shied away from addressing these concerns; the subject has been a taboo in Germany's largely conformist media. Since the World War II, xenophobic rhetoric has been barred, both by law and custom. Yet on the German street, resentment about foreigners smoldered, especially so during the Balkan wars of the 1990s when hundreds of thousands of Bosnians and Kosovars arrived in the country. Confined to hostels on the fringes of small German towns, they frequently found themselves clashing with ethnic Germans who had recently emigrated from the splintering Soviet Union. Homegrown Germans, still reeling from the costs of unification, watched aghast, and some of their pent-up frustration is being vented now. Certainly Sarrazin's book is being hailed as the work of a truth-teller: He sold 800,000 copies in three weeks this summer and his public readings are crammed with fans. I attended one the other day and was shocked to see how a teenage schoolgirl was shouted down and hustled out of the room by security guards for mildly questioning the Sarrazin thesis. Merkel, sensing danger, was quick to condemn at least one passage that seemed to suggest that there was a "Jewish gene."

This is not just about a book. Germany is beginning to realize that there is a gap in the party political spectrum to the right of Merkel's Christian Democrats, but to the left of the virulently undemocratic neo-Nazis. Opinion polls show that a party inspired by Sarrazin's thesis -- a party that would be critical of Islamic expansion in Europe and that seeks to control immigration -- could win 15 percent of the vote, thus seriously shaking up the German political system. The fact is that Merkel, like many other supposedly center-right administrations in Europe, has moved her party leftward. This has partly been by happenstance -- she was forced to spend her first four years in power in coalition with Social Democrats, and the economic crisis has demanded bank bailouts and assertive industrial policy. But it was partly by design: Far from a Teutonic Margaret Thatcher, Merkel has always preferred to seek moderate consensus on economic and social matters.

Merkel is not the only one rattled by the wave of populism. While Merkel reversed course to officially bury multiculturalism, one of her primary coalition partners, Horst Seehofer -- the leader of the Bavarian Christian Social Union -- called for a wholesale stop to immigration. The newly elected German president, Christian Wulff, gave a speech emphasizing the Judeo-Christian foundation of German society, and left just a touch of room for Islam to play a role, too. Their seemingly coordinated pronouncements smacked of panic.

Were they right to be nervous? Certainly anti-Islam parties have been riding a wave of popularity across the continent. A dissident Christian Democrat, Rene Stadtkewitz, is trying to set up a German Freedom Party, modeled on the successful right-wing Austrian party founded by the late Jörg Haider. In September, an anti-immigrant party in Sweden, the Sweden Democrats, stunned the country by entering parliament for the first time. Pia Kjaersgaard, head of the right-wing Danish People's Party, actively campaigned for the Sweden Democrats because, she said, she could no longer be a "silent witness" to the Islamization of Denmark's neighbor.

In the same spirit, Dutch populist Geert Wilders recently visited Berlin to help the Germans form a new anti-Islam party. I stood in a jam-packed Berlin conference room to see him address more than 500 German conservatives and couldn't help but admire the serpentine way in which he seduced them into loosening the shackles of their post-Holocaust guilt. It was indeed possible, he told them, to be suspicious of foreigners but not be anti-Semitic. Germans needn't inhibit an indigenous radical conservative movement out of fear of being lumped together with shaven-headed Holocaust deniers.

"The crimes of the Nazi era," he told the cheering crowd, "are not an excuse for you to refuse to fight for your own identity. Your only responsibility is to avoid the mistakes of the past." The cardinal error of the interwar years, according to Wilders, was the failure to identify gathering threats against democracy. In his analogy, it was the Muslims who were the Nazis. The audience rose to its feet to applaud him. It was the first time in decades of reporting from Germany that I witnessed a passionate response to a passionately delivered political speech.

Merkel does not want to grasp the nettle of anti-immigrant populism -- one senses it stings her as much as it does the Muslims she finds herself unloading against. But if she doesn't, if she simply bides her time, she will see her Christian Democratic party crumble. Germans are restless, and they increasingly believe their political class is tone-deaf. Popular resentment is running high, and there is a powerful head of steam behind the emerging anti-Islam movement. No longer can Merkel get away with simply hugging well-integrated Turkish-German soccer heroes and pretending that everything is just fine.