The state has power, but not to protect its citizen.
The power of the state is derived from the citizens. It seems that German state is incapable to protects its citizens, but also is willing to suppress its citizenry. The suppression of the demonstrations became German's international embarrassment and causes as a rift between EU members countries. Hosing down demonstrators will not scare nor end enraged citizens. Pegida is organizing demonstrations for months, so they will not be stopped by this incident. The next move for Merkel's democracy would be total suppression of the opposition, and starting with mass arrests of Germans citizens. I wonder if this will be move from water cannons to armored vehicles by summer and declaration of some kind of state of emergency.