When German Chancellor Angela Merkel was one of the last major European leaders to have her first official White House visit with Barack Obama the media speculated that the personal chemistry between chancellor and president wasn't right. But just when it mattered most, the popular president came around for Merkel.

With months to go before Germany's general election in September, Obama told Merkel during her visit to Washington in June that he thought she had already won the contest, adding that he didn't understand why she worried so much about it. The unusually frank exchange, captured by a German television crew, not only showed the two leaders getting along just fine, it also provided a welcome boost for Merkel's international stature back home from a president who was and still is more popular in Germany than any national politician.

Further proof of how highly Merkel is regarded by the new president was her invitation to speak before both houses of Congress. The address to Congress took place only weeks after the German election, but was scheduled months ago with the obvious assumption that Merkel would be reelected.

The good personal chemistry between president and chancellor and Obama's immense international popularity has smoothed over some quite profound differences on major topics.

Afghanistan: Starting with his famous speech in Berlin as a presidential candidate, President Obama has repeatedly made it clear that he unlike his predecessor will listen and take into account the advice and concerns of US allies on important international issues. But he added that he also expected Europe to make a fresh start in transatlantic relations and not only voice concerns, but help shape a positive solution to shared problems.

The prime testing ground for this new approach is of course Afghanistan. But while the US under Obama has made significant changes in its Afghan strategy starting with the replacement of the ISAF commander, a new focus on counterinsurgency and protection of civilians and a troop surge, Germany's stance remains pretty much the same. Berlin has all but ruled out deploying troops to the more dangerous southern part of the country and in fact is very reluctant to significantly increase its military contingent at all.

Despite Obama's hope for a stronger German role in Afghanistan, the new center-right government's position is largely unchanged from that of the grand coalition during the presidency of George W. Bush.

Financial crisis: While Germany and the US agree on the broad goal of mitigating the effects of the worst recession since the 1930s and reforming the global financial system, Berlin and Washington are not on the same page when it comes to how this can be accomplished. The German government contends that the goal of stimulating the economy has to be balanced against fiscal responsibility. For the US administration however, restarting the economy clearly trumps concerns about fiscal stability.

Consequently, right after taking office Obama repeatedly pushed hard for Germany to increase its stimulus packages that the White House viewed as too small. The same is true when it comes to reforming the financial sector. To be sure, according to a recent analysis by Bloomberg, not one measure that would overhaul the financial system has been put into action in Europe or the US. But while Germany by requiring banks to improve their financial resilience has at least made a stab at reform, the US so far hasn't.

There's also great reluctance in the US to back European proposals to curb bankers' bonuses, a move that would have little economic relevance, but huge public significance. However, neither Germany nor the US have made serious efforts to split up the so called too-big-to fail universal banks, a measure that is supported by experts like Joseph Stiglitz and Paul Volcker.

Climate change: The new US administration by acknowledging the problem and by vowing to take an active role in combating climate change reversed the stance of Bush presidency - at least in theory. But as observers in Germany have had to learn against the backdrop of the failed negotiations at the Copenhagen climate conference, even an American president who supports European efforts to curb global warming cannot by himself convince a reluctant Congress to sign on to an international climate change treaty.

So what then is the state of US-German relations in year one of the Obama presidency?

Compared to the Bush administration, the rhetoric and the tone in the transatlantic conversation improved dramatically under President Obama. As promised during his election campaign, he has tried to seriously consult and engage with Germany and other European partners and focused on a multilateral approach. For this he has been rewarded with strong approval ratings in Germany and Europe.

On substance, however, there is little change in transatlantic affairs. When push comes to shove, when words need to be translated into action the current leaderships in the US and Germany have not behaved very differently to those under the previous administrations. That is true not just on Afghanistan, the financial crisis and climate change, but also on other issues such as how to deal with the Guantanamo prisoners.

Author: Michael Knigge
Editor: Rob Mudge