Has German Finance Minister Peer Steinbrueck finally said what many world leaders think but are afraid to say? That the British government won’t sign up to meaningful reform of financial markets because it is too worried about what it would mean for the country’s most famous cash cow, the City of London.

The City, which accounts for around 35 percent of global foreign exchange turnover, has been a popular target for critics of capitalism for years. But it has rarely been singled out so bluntly as a problem by one of Britain’s close allies.

Even for a man not known for holding his tongue, Steinbrueck’s remark on Wednesday that Downing Street was impeding reform because it had “practically aligned” its interests with the City, was unusually undiplomatic. Just days before global leaders meet at a Group of Eight summit in Italy, Steinbrueck suggested the British government was plotting a “restoration” of the pre-crisis order to protect its own interests. The United States, by contrast, was now open to reform, he said.

Rather than attempting to smooth ruffled feathers when she addressed parliament on Thursday, Chancellor Angela Merkel picked up the thread, saying she would not tolerate efforts to stall reform at the G8 summit, though she did not name Britain.

Steinbrueck’s comments generated a strong response on German websites. Though he belongs to the centre-left Social Democrats, many readers of conservative daily Die Welt wrote in to praise him. “Finally the truth”, “genius” and “backbone” were some of the remarks his stance provoked. Across the channel, the most popular reader’s comment posted online in an article by Eurosceptic British newspaper the Daily Mail also backed the 62-year-old. “I’m with the German finance minister,” it begins.

Whether one agrees with his approach or not, Steinbrueck knows he is not talking into a vacuum. Large swathes of the commentariat believe not enough has been done to stabilise financial markets over the long term. Martin Wolf, chief economics commentator of the Financial Times, wrote on Wednesday that without radical changes, another banking crisis is inevitable.

PHOTO: German Finance Minister Peer Steinbrueck addresses a news conference in Berlin, May 13, 2009. Steinbrueck said on Wednesday Germany’s interbank lending sector was still suffering from weak confidence. REUTERS/Fabrizio Bensch

It took only a few disarmingly pointed questions from four 7th grade Berlin students to get German Finance Minister Peer Steinbrueck to loosen up and deviate from the usual stock answers he - and fellow political leaders - serve up.

In perhaps his most candid public comments since taking office three years ago, Steinbrueck admitted long meetings cause his rear end to get sore and also compared deficit-spending just for consumption purposes to spending money on chocolate bars. He also said he doesn’t forget the names of journalists who write nasty comments about him. Here are a few of the more choice morsels from Steinbrueck’s interview in the Welt am Sonntag newspaper published on Sunday:

Question: Do you get tired in your job?
Steinbrueck: Do you mean if I fall asleep at my desk?

Question: No, I mean do you sometimes get sick and tired of your job?
Steinbrueck: That’s a dangerous question because some people might draw the wrong conclusion if I said what really brews inside me. But yes, sometimes I get really shirty. There are some meetings that are so incredibly long that at some point your rear end starts to hurt.

Question: Is that the reason you didn’t go to important meeting of G7 finance ministers in Washington?
Steinbrueck: You mean the trip in 2007? No, the reason for that is my wife had planned a trip to Namibia for the whole family many months before that and paid for it with an inheritance she got from her mother. And then the date for the Washington meeting came up. I had to make a decision: fly to Washington, where I go three or four times a year anyhow, or leave my family in the lurch. It was an easy decision for me. But some journalists then criticised me as ‘Safari Steinbrueck’. I’ll be honest with you guys. I’ve made a note of their names.”

Question: No, we meant the trip this weekend, another one that you cancelled on.
Steinbrueck: Oh that one. That’s because I’m going to an SPD party congress in my state to be nominated for the next parliament. That’s important in a democracy. I wrote a letter to the other finance ministers and they all understood my reasons.

Question: Is it possible that Germany could one day go bankrupt?
Steinbrueck: No, you must have heard about that in a horror film! Germany is one of the strongest countries in the world. We’ll master this crisis.

Question: What will happen if we keep going further into debt?
Steinbrueck: You can take on debt if the money is going to be used for sensible things - when you invest it in people and things that will bring us progress or advantages down the road. If that’s the case, borrowing money is totally sensible. But it’s bad if you borrow money just for spending on consumption, like for example buying chocolate bars.

There are moments when tectonic plates shift and history changes course.

Sometimes those shifts are barely perceptible — the Treaty of Versailles that ended World War One but also bred German resentment and the rise of Nazism; the Yalta conference that helped create the United Nations as a guardian of peace but also led to the Iron Curtain that divided Europe for nearly half a century; and the Great Depression (arguably the greatest catastrophe of the 20th century, says Martin Wolf).

It is only when we look back we see the world has changed.

Are we at such a point now? 

John Gray in The Observer speaks of a shattering moment in America’s fall from power. Germany’s Finance Minister Peer Steinbrueck has said the United States has lost its financial superpower status. French President Nicolas Sarkozy has said we need to rebuild the whole financial system from scratch, as they did at Bretton Woods. The Telegraph called for a ‘better capitalism’.

What of its status in other areas, of diplomacy, defence and its lead role in NATO? Can an inward looking United States commit to billions of dollars to rescue its financial system and at the same time commit ever more money to military operations in Iraq, Afghanistan, Africa and elsewhere?

There is a widely held view that September, 11, 2001 changed the world. Will the effects of 2008’s financial crisis prove even more profound?

Today’s European edition of the International Herald Tribune is fronted by a photo montage of the presidents of Senegal, Afghanistan, Bolivia, Argentina, France and Brazil.

They have two things in common - all are attending this week’s United Nations General Assembly in New York and all see a global threat from the financial crisis that began on Wall Street and, in the words of President Gloria Macapagal Arroyo of the Philippines, has moved “like a terrible tsunami around the globe”.

Some of the strongest words were directed at Washington lawmakers, Wall Street speculators and market regulators.

French President Nicolas Sarkozy has called for those responsible for the crisis to be punished. Chancellor Angela Merkel of Germany has said to the United States and Britain: “I told you so”.

Her finance minister, Peer Steinbrueck, believes the United States has lost its financial superpower status.

Bolivia’s President Evo Morales has been quoted as saying: “There is an uprising against an economic model, a capitalistic system that is the worst enemy of humanity.”

How does this fit with Secretary of State Condoleezza Rice’s assurance that the world still has confidence in the United States?

Who needs to adjust their lenses?