German Chancellor Angela Merkel managed to significantly raise her profile when she successfully presided over the EU and the G8 presidencies. She pushed through ambitious EU climate-protection goals in March and in June hosted a successful G8 summit in the Baltic Sea resort of Heiligendamm, with the world's most powerful leaders committing themselves to join the EU's struggle against global warming.

The G8 summit also was the event that posed the greatest security challenge Germany had to shoulder this year: Berlin deployed more than 16,000 police and 1,100 military troops to the summit area and constructed a 7.5-mile, 8-foot security fence around the 19th century spa resort. The measures cost $150 million, making the G8 in Heiligendamm the most expensive and most heavily secured single-venue event in Germany's history. More than 100,000 protesters from all over the world kept riot police on high alert before and during the event.

The months before the summit had also seen several firebombing attacks by far left-wing groups classified by the German government as terrorist groups.

The country in 2007 also experienced the 30th anniversary of one of its darkest periods, the so-called "German autumn," a time when the left-wing terrorist group Red Army Faction launched a wave of violence and fear with high-profile kidnappings and murders of influential German political and industrial leaders. The anniversary of the German autumn coincided with the release and pardon requests of several of those former terrorists, which kept the media coverage ongoing for several months.

Yet Islamist terrorism, not left-wing terrorism, caused the biggest alarm in Germany in 2007.

In early September German authorities with the help of U.S. intelligence managed to uncover an Islamist terror cell that planned to attack German and U.S. institutions, including Frankfurt Airport and the U.S.-run Ramstein Air Base.

Authorities arrested the three ringleaders of a cell of the Islamic Jihad Union after they had started building a bomb in their reclusive hideout in western Germany. The hydrogen peroxide the terrorist suspects had assembled (12 barrels with some 1,600 pounds) could have produced bombs with the explosive power of more than 1,200 pounds of TNT -- 20 to 30 times the explosive power used in the London attacks of 2005, officials said.

German Interior Minister Wolfgang Schaeuble said the foiled attack plans not only proved that German security authorities were doing a "very good job," but also that the country was "very concretely" threatened by "homegrown terrorism," a phenomenon dominated by young Muslims who grew up or were even born in Europe and have become radicalized.

"Those guys weren't some semi-professionals," Schaeuble said after the arrests were made in September. "They worked in a highly conspirative way and were very determined."

Schaeuble over the entire year has also showed his determination to answer the terrorist threat, but his far-reaching security proposals on several occasions sparked widespread opposition.

Schaeuble called for the use of spying software (so-called Trojan horses) on computers, proposed to collect citizens' biometric data and wanted to increase video surveillance in Germany's cities.

While Germany's highest court outlawed federal online spying software, there have been no legal proceedings against an online database comprising detailed information on terror suspects that is accessible by both police and intelligence services. Schaeuble also managed to push through the inclusion of fingerprints into German e-passports.

The terror arrests of September have only encouraged Schaeuble in his plans to widen the means of Germany's security agencies, so expect more heated debate on the interior minister's proposals in 2008.

There are several more positives, however, in Germany's 2007 record: Unemployment is down to the lowest rate in 14 years, and despite the strong euro and the fledgling dollar, Germany still exports more goods than any other nation on the globe.