The world is watching Berlin.

Will Angela Merkel, having just won a third term as German chancellor, give up her characteristic caution and become the assertive European leader that many observers want her to be? Will she step up her game and lead the EU out of the euro crisis?

But the euro crisis is not the only foreign policy challenge that the next German government—most likely a coalition between Merkel’s Christian Democrats and the Social Democrats—is going to face. As Americans are becoming more and more reluctant to back rules with power, the liberal world order has become more fluid and shaky. As a major European power, Germany must beef up its foreign policy or face the decline of that global order in its neighborhood and beyond.

First of all, Berlin needs to work with other EU capitals to give the bloc’s common foreign policy a new impetus. EU foreign policy is a huge opportunity for Berlin to multiply Germany’s influence while at the same time embedding it in a multilateral framework. The institutional structures are now in place, but they haven’t been seriously filled with life yet. There is much agreement on small issues but little agreement on big foreign policy questions. Member states must be ready to invest much more in these structures to give the EU the clout to play a global role.

Germany also needs to do more on defense. NATO appears to be fading, and the United States is less and less present in Europe. A post-American world will be more complex and dangerous. Without sufficient military power, Germany lacks the capacity for deterrence. And without the ability to resort to hard power, Germany will lack diplomatic strength.

Yet while the transatlantic military alliance becomes weaker, the West has the chance to strengthen its economic ties and reestablish itself as a common marketplace. Merkel, who is known to have a soft spot for the United States, has been a firm supporter of the Transatlantic Trade and Investment Partnership now under negotiation. The new German government should continue to put its weight behind these efforts, which could transform the Cold War–era partnership into an enduring relationship. That could form the core of a liberal zone of stability and prosperity.

A Germany that is firmly anchored in a renewed transatlantic alliance could play a much bigger role in the West’s relations with Russia. After first following in former chancellor Gerhard Schröder’s footsteps, in the last year Merkel has turned cool toward Russian President Vladimir Putin, knowing that the relationship rests solidly on both sides’ economic interests. What Merkel hasn’t done is to lead on a new EU approach toward a Russia that has become much more autocratic internally and more challenging in its attitude toward the West.

But Berlin could and should play a major role in shaping a new Russia strategy together with key partners—Poland, the EU, and the United States. Germany should also do more to defend the rights of sovereign countries in the EU’s and Russia’s shared neighborhood to freely chose their alliances.

While the East has been a traditional priority for Germany, Berlin cannot ignore the troubles in Europe’s South. On Iran, Germany must continue to keep up the pressure and support U.S. efforts to initiate negotiations on Iran’s nuclear program. On Syria, Europeans (with the exception of France) have put their heads in the sand, leaving the diplomatic legwork to the United States and Russia. A joint European strategy on Syria is overdue, as the civil war continues to ravage the country despite all diplomatic efforts.

Another top objective on Germany’s foreign policy agenda should be a more strategic relationship with China. Of all the European powers, Germany has the most leverage on Beijing. But it has let the bilateral relationship be defined mainly by its big business. As a state, however, Germany has longer-term interests—not least keeping China’s rise peaceful. Berlin must put Asian security high on the bilateral agenda and cooperate with its European partners and the United States to minimize the risk of an outbreak of hostilities in Asia.

German foreign policy is by nature multilateral. But too often multilateralism serves as a cover for inactivity. Outsourcing security to the United States and foreign policy to the EU doesn’t work. As Europe’s biggest economy, Germany must do much more to translate its weight into power and develop a foreign policy worthy of the name.