German unification in 1989 raised the spectre of German hegemony in post-cold war Europe. In this article, I demonstrate that Germany lacks the structural power consistent with European hegemony or dominance; that there is little evidence supporting an appreciable gap between Germany's structural power and foreign policy ambitions; and that apparent symptoms of German hegemony, particularly the process of institutional emulation in Central and Eastern Europe, reflect other international processes and incentives emanating from the state system itself. This reassessment and downgrading of Germany's relative and absolute power resolve the paradox of German structural power and German reluctance identified by others. But this alternative narrative raises another more important question: why is Germany treated as a potential or even aspiring hegemon in Europe? The answer to that question is located in the interconnected legacies of Auschwitz and the occupation regime. This joint legacy constitutes an important part of the historical context within which we frame our assessments and judgements of German power; explains the frequently unwarranted exaggeration and suspicion of German power; and demonstrates how the past can function as a powerful prism though which we interpret the intentions, ambitions and capabilities of a state.