Firstly, this economist who helped draft the template for the modern German welfare state is neither anti-euro nor anti-Europe.

Yes, he has just written a book — which has soared rapidly on Germany’s bestseller lists — called Europe Doesn’t Need The Euro. And he’s no fan of how Europe’s stricken ‘Club Med’ economies have let themselves go, bringing the continent to its knees.

But that doesn’t make him hostile to the grand European Union experiment, or even currency union. He simply demands economic shock therapy for those already inside it, and thinks Brussels should be more discriminating about who it lets in.

Just as Berlin should be, he says, about who it lets into Germany. Which raises the other things to clear up; Sarrazin insists he’s no racist, not a neo-Nazi, nor Holocaust denier, nor wishes ill-will or disrespect. Yes, his 2010 anti-immigration tome Germany Is Abolishing Itself — his first bestseller — was adopted with gusto at the hateful fringes of the far right, in arguing that Germany’s Muslim immigrants are socially, culturally and educationally sub-standard. And, yes, he likes to talk about Jews a lot.

Yet, though he’s hailed all the way to the fringes of the far-right, Sarrazin is actually a card-carrying member of Germany’s centre-left Social Democratic Party (SDP), albeit a party that tried — and failed — to expel him for his extreme views. If Sarrazin could be accused of anything, it wouldn’t be anti-Semitism, but more likely philo-Semitism. In the main, he seems a great admirer of what the Jewish people have achieved despite the appalling obstacles history has erected against them. And he likes to further defy pigeonholing, by claiming that Sarrazin, his family name, derives from a mediaeval European term for Muslims.

But as Germany pledges to bankroll Europe back to health, Sarrazin’s willingness to pose questions as to why has stirred a national conversation around taboo subjects many Germans burdened by their country’s dark past find particularly uncomfortable. Sarrazin simply says these conversations must be aired, if Germany and Europe are to advance through this funk.

All of which explains why some are quick to opine on Thilo Sarrazin, as he controversially fleshes out skeletons long believed well dead and buried.

Der Spiegel, Germany’s prominent weekly news magazine, for example, describes Sarrazin as a “firebrand”, a “maverick”, and a “combative politician”. SDP party colleagues reckon he talks “bullshit”. The SDP’s Peer Steinbrück, the first finance minister in the right-left “grand coalition” government of 2005 that handed Christian Democrat Angela Merkel the German chancellorship, says Sarrazin “sees only money and capital, not society”. The German intellectual Arno Widmann says his work is that of a “madman”. German Turks and Arabs say he’s a racist, and even Merkel herself regards him as “socially divisive”.

But the mild-mannered 67 year-old — he’s the same age as post-war Germany — conversing opposite with The Global Mail appears anything but a tub-thumping demagogue. Indeed, Sarrazin’s manner is measured and thoughtful, punctuated by reflective pauses as he chews over questions. His answers, when they come, are neither lecturing nor hectoring; if anything, he comes across as slightly awkward and introverted, even shy. But his remarks are not gaffes; he knows exactly what he is saying.

It’s only later, when listening to his recorded remarks, that one has a sharper intake of breath at what Sarrazin has actually said; at his blunt challenging of prevailing orthodoxies, remarks perhaps more racialist than racist, but no less confronting.

“Europe, as a rule, has to put a lid on immigration from the wrong area and regions. We should stop immigration from the Middle East and from Africa altogether. This is a very serious long-term demographic and cultural risk for Europe, not only for Germany … we have to do this.”

And: “Let them [Europe’s suffering economies] go bust. Let them improve their ways. There should be no further bailouts for any of the other member countries. All those who don’t better their ways will have to leave the currency union.”

And: Germany’s rescue of the Eurozone “is driven by that very German reflex that we can only finally atone for the Holocaust and World War II when we have put all our interests and money into European hands. I tell the German people you shall pay for Europe because your ancestors murdered the Jews”.

WE MEET the day after the June 17 Greek elections, at Berlin’s famous Café Einstein on Unter den Linden, in what was East Berlin. A great deal of politics has occurred around here — eastern and western. The Brandenburg Gate, built by a king, is just 300 metres to the west, next to it is the Reichstag that’s again home to the German parliament after Berliners tore down Communism’s wall, the remnants of which are still standing here too. And Hitler’s government, home and suicide bunker was 300 metres south of here, under the old Reich’s Chancellery on Wilhelmstrasse.

A succession of US presidents have also made landmark speeches here, within a short stroll of each other: JFK found his inner Berliner a kilometre away at the Schoneberg town hall in 1963; by the Brandenburg Gate in 1987, Reagan implored Gorbachev to “tear down this wall”; and four years ago, in a packed Tiergarten, once a hunting precinct for the aristocracy, now the city’s largest park, Obama campaigned for the presidency he would stroll to a few months later. It all serves to remind that what happens along these strasses can change the world.

This is Sarrazin’s home turf. He was Berlin state’s finance minister and also worked at the upper reaches of the Treuhandanstalt, the West German state trust that managed East Germany’s transformation to capitalism after the 1990 reunification.

Such a CV makes him a political insider — “I know all their tricks,” he says of Germany’s political classes, adding that this explains their vitriol against him, that the milieu in which he once moved feels betrayed. “This is what makes politicians so angry at me,” he says. “They feel caught out, I am one of the political class, I used to be a successful civil servant, I was a fairly successful manager of a public enterprise, I was a highly successful minister of finance in Berlin. They regard me as one of them, I know most of them personally so they seem to regard [what I say] as a kind of treason. My way of addressing the reality poses the question of why they don’t address it themselves.”

If that’s so, he’s no pariah in this most political of Berlin cafés. Wellwishers — all men, all ageing — approach our table to engage him for a moment and shake his hand. Even before our meeting I’d felt some of his celebrity: having arrived early at the café I told the 50-something maître d’ I was meeting Thilo Sarrazin. He smiled with recognition, and led me to a generous table.

Germany’s educated middle class, Sarrazin says, buy his books. But then this man who’s often condemned as racist tells an anecdote about an encounter he’s just had, en route to the café. A cab driver, “obviously from India but of course speaking German” cheerily recognised him, bidding him well and advising him “not to be afraid” of his critics, and to keep on speaking the unspeakable. Sarrazin clearly likes that an immigrant — not an obvious member of that advantaged middle class — says this.

THILO SARRAZIN’S two recent bestsellers have certainly stirred Germans, while also making this former central banker wealthier than he ever was as a career civil servant.

His 2010 anti-immigration book has sold 1.4 million copies, and this second tome about the euro spent much of May and June atop Germany’s non-fiction lists. Both have been translated into other languages, and Sarrazin says his publisher is “very pleased” at the debate he’s generated. And doubtless at the euros generated too.

If Sarrazin has a mantra, it is, “first one has to sort out the facts, and then one has to sort out the reasons”. In a two-hour discussion with The Global Mail he prefaces several answers in this way, speaking with the patience of a scientist explaining complex chemistry to a layperson.

Sarrazin expresses slight surprise at the reaction to his writing. He says he merely states the obvious, drawing conclusions from basic research. His work, he says, is a study combining conventional economics with sociology and social science and perhaps some journalism too. “Nothing of what I said in both my books is really new,” he says. “It’s just no-one has articulated the facts in such a way, of what is in the public mind, combining German demographic questions with immigration and education and intelligence.”

When he claims, during a discussion about immigration, that students from the Muslim world rank lowly on OECD aptitude measures, he knows exactly what impact such remarks may have. Yet he insists that when he includes such material in his books, he’s not writing to shock, to gain an easy headline or emerge as some cultish messiah of the wacky right. Nazism, he says, was abhorrent and he’s appalled that he’s become something of a pin-up boy for the National Democratic Party (NDP), at the neo-Nazi extremes of Germany’s political spectrum.

In the hands of a Dutch Geert Wilders, Greece’s Golden Dawn, France’s Marine Le Pen or Britain’s National Party, such remarks might appear to be populist nationalism designed to scare an ignorant electorate into voting for them. Sarrazin claims to hold no ambition for political office and says, at 67, he’s too old anyway. (Recent polls show about 20 per cent of Germans say they’d vote for him if he launched a political party.)

It’s little wonder that the NDP latches on to Sarrazin. In May, after his euro book connected Berlin’s euro bailouts to the Holocaust, the NDP gleefully said Sarrazin articulated Germany’s “psychopathological guilt complex that makes it fulfil almost every wish of self-interested foreign countries even 67 years after the end of the war”.

While insisting he has no truck with the NDP, Sarrazin says this German World War II atonement debate is what the German Everyman discusses with friends and family around the dinner table. And never more so than now, when they are being asked to pay for Europe’s economic failures.

That’s garbage, choruses Germany’s political establishment. Germany’s feisty incumbent finance minister Wolfgang Schäuble recently told German TV that “either Sarrazin says and writes his appalling nonsense out of actual conviction, or he does it out of obnoxious calculation”. Germany, Schäuble says, “can be happy that we have been given a second chance despite the Holocaust … and that there is a growing Jewish life in Germany”.

Schäuble condemns Sarrazin as simplistic and populist. “That was the case with the way he handled the not-so simple problem of integration in our country,” Schäuble says of Sarrazin’s 2010 book. “Sarrazin obviously wants to repeat that commercial success with the euro issue,” Schäuble says, referring to Sarrazin’s latest publication. “As long as he pays his taxes properly, that’s fine by me.”

But with Greek protestors happy to parade posters of Angela Merkel as a Nazi, Germany’s multi-billion-euro shouldering of the Eurozone mess has awakened a debate about blaming modern-day Germans for the actions of their ancestors. The American essayist Adam Gopnik wrote recently in the online BBC News Magazine that it just be might be time to stop mentioning the war.

In Germany, more and more moderate average citizens are asking whether, 67 years after Hitler’s death, it is acceptable for Germany to stop self-flagellating over the horrors of World War II. Appropriately or not, this question has been phrased in the context of more recent barbarism — Rwanda, Yugoslavia, Mao’s China, Pol Pot’s Cambodia, mid-60s Indonesia, Apartheid, Sri Lanka — having since been perpetrated.

“I have never beaten myself up,” Sarrazin says, in reference to a war he had no part in, or ever felt guilty for. Then, pointing at me, an Australian, he says, “you haven’t been very nice to the Aboriginals 150 years ago. It was kind of a Holocaust, eh? Life, and people, can be very cruel”.

To this he pragmatically adds, “as long as there is German cultural and historical identity, the German name will be connected to the Holocaust and National Socialism [the Nazis]. This is complicated for Germany.

“Guilt and responsibility never ceases, wrong deeds are wrong deeds, even after a thousand years.

“[Atoning] stops when we stop it. We have to stop it ourselves. The others always get their way when they use this argument.”

IN 2010, when he was still on the board of the Bundesbank, Sarrazin told an interviewer that Jews “share a certain gene” that distinguishes them. Germany’s Jewish community recoiled in horror. “Whoever tries to define Jews by their genetic make up succumbs to racism,” said Stephan Kramer of Germany’s Central Council of Jews. Germany’s deputy Chancellor Guido Westerwelle said Sarrazin had stoked hatred and that “remarks that feed racism or even anti-Semitism have no place” in German politics. Chancellor Merkel condemned him as making Sarrazin “stupid and pointless” statements. He apologised and soon after resigned from the central bank.

I ask him if he is a racist. His responding laughter emits more as a contemptuous snort. “It’s a label,” he says. “It’s political defamation.”

He says, “I’m combining the facts, and drawing conclusions from the information that is available. I would never say I have discovered the final truth and can predict the future … but I am only concerned with the facts as I see them. If those trends go on, they will have the following consequences, that Germany as we know it will abolish itself.”

“One thing that 80 per cent of our less successful immigrants — and this goes for Australia as well as the US and the whole of Western Europe — have in common is their Islamic faith,” he says, without citing any sources.

Germany’s immigration policy, which welcomes immigration from Muslim countries, particularly Turkey, “will make us, as a people, in the long run, less bright. The type of immigration that we have in Germany does not help matters but makes them worse”. (Sarrazin has perhaps forgotten how many Turks first arrived in post-war Germany, as gastarbeiter, or guest workers, doing menial jobs Germans wouldn’t.)

I say that generalised views like this are often put around the US right, in relation to Hispanic immigration, and also arises in Australia over Asian arrivals.

He’s unmoved. “Germany, as with most European countries, does not get its immigration from the Far East, we get immigration from the Middle East, Turkey and from sub-Saharan Africa. This is quite a different matter.”

I suggest he may be on strong ground as a trained economist, but that he leaves himself exposed to attack and condemnation when he ventures into the realms of race, demographics and immigration policy.

He pauses for thought, before describing himself as one of the architects of the modern German welfare state, which required him to regard the economy with a sociologist’s demographic eye.

“I came to recognise that in the long run we will not solve public financial problems without reforming the welfare state … and this means in Germany and Europe always to deal with the sources of the productivity and with immigration.”

“And [if] you have a kind of immigration which lowers our future productivity, then we won’t be able to finance the welfare state.”

He cites research from the OECD-backed Programme for International Student Assessment which ranks educational aptitude.

“You can see that the kind of immigration to Australia or Canada [as compared with immigration to Germany] makes your country [Australia] brighter.” He stresses the last word, brighter, to cement the point. “Or at least more educated, because people from the Far East are simply much better in the educational system and have better educational and scientific achievements.”

“What is the reason?” he asks. “Maybe they have inborn brightness, maybe it’s their culture. It doesn’t matter what the reason is, they are better.”

On a trip he made to Australia in 2011, he says he was struck by the “young faces of immigrants from Asia, it’s quite different from our immigrants. Their appearance, their attitude, their way of dealing with each other, the way of the sexes, the kind of integration … and the lack of ghettoes. Many things all different [from Germany].”

Sarrazin similarly lauds the effects of Chinese emigration to North America a century ago, saying that “even the children of uneducated Chinese and Japanese workers which built railways did better in school than the white race did. It was to the astonishment of the authorities in Canada at the time, who were still rather racist but they had to accept that the children of Chinese coolies did better in school than did their own white middle class”.

Also in the US, he claims the sub-continental Indian community today comprises just one per cent of the population, but 13 per cent of all tertiary engineering professors. “With our Arabs and Turks and the people from sub-Saharan Africa it’s the other way around,” he says, meaning that these immigrants rank poorly in the German education system, and are less likely than Europeans to undertake higher education. “When [such trends] are long term and statistically significant, then I have to look for the difference,” he says.

SARRAZIN has written two books about the euro. The first was in 1996, as Europe was enthusiastically preparing for monetary union. It sold an unremarkable 50,000-odd copies, and became relegated mostly to the drier shelves of academic libraries. The second, published earlier this year as the euro was melting down, has been a bestseller.

He explains that Paris’s desire for the common currency was born of envy and rivalry of Germany, of French anxiety about the strength of the German deutschmark. “It was always a problem for the British and the French that though we had lost the war, we then had the strongest economy and strongest currency. They thought ‘if we get a common currency, we get the strength of the deutschmark in our hands’.”

Many economists, and more than many Greeks, believe Germany has been the biggest beneficiary of the common currency, that Germany has in fact made billions from it. They say that by linking with lesser (Mediterranean) economies, Germany sufficiently softened the rampant mark while efficient, industrial Germany churned on.

This, according to Sarrazin, is “not the whole truth”. He says that the strength of Germany in a common currency area would naturally have made it “much more superior”. Germany, he notes, has managed to sustain its industrial and manufacturing competitiveness even when confronted by the rise of cheaper China as an economic power.

“I am not anti-euro … not at all anti-European, not at all,” he insists, adding that he’s no German nationalist. He argues that the economic union that Europe created for itself — free internal movement of labour, goods, services and capital, and a common competition policy — “may have a common currency, but it is not necessary”.

“All those who don’t better their ways will have to leave the currency union but [the EU] has to have the courage and cold blood to go through with this messy process.”

He then paints a vivid picture of currency-union dysfunction, crediting the vision to a taxi driver who was praising his new book about why Europe doesn’t need the euro. (Yes, this is his second cabbie anecdote. “I have a lot of conversations with taxi drivers … he was a guy around 70 and was a German,” notes Sarrazin.)

The scene is of a prosperous German town where all the houses’ windows and doors are open, with all villagers’ belongings on show, enabling the “poor to steal from the rich.” He roars with laughter in re-telling the cabbie’s metaphor for what has happened with the euro. “This is exactly what one is doing with the currency union!” he exclaims. “Isn’t that a wonderful picture for the currency union?”

As for fixing the Eurozone crisis, Sarrazin advocates shock therapy. “Let them go bust. Let them improve their ways.” He says, “there should no further bailouts for any of the other member countries.”

“I would tell France and the other governments that from now on the German purse will be closed, there is no need for further discussion about the opening of that purse.”

Yes, he agrees there is the possibility of economic contagion as cancerous symptoms spread to healthy neighbours but “be it a few days or many years it will always be smaller than the long-term cost if we stick to the wrong policy.”

He would also put an ultimatum to the European Central Bank: that it must put continental books in order or Germany will pull out. He claims his fellow Bundesbankers were “all against the euro — they were forced to do it”.

One senses Sarrazin is having a bit of fun in suggesting any of this, as Europe burns through a conflagration he doesn’t have to extinguish. He chortles when he says, if Germany were ever to adopt such policies, “we will be bombarded by insinuations and accusations, and be permanently reminded of our very bad past. They will all tell us this is really bad form”. He pauses for dramatic effect.

“And then maybe Angela Merkel should go buy herself a handbag similar to that wielded by Maggie Thatcher and say ‘Dear Mr President, may I remind you’…”

He laughs at the mental image. “Or something like that.”