The Scotsman: "to get everything out of [The have-Nots] you should probably read it at least twice. It is good enough to deserve that attention."

THE HAVE-NOTS WON THE German Book Prize, which I take to be the equivalent of the Booker, for the best novel of 2006. It's certainly a serious and impressive work, dense in the best sense of the word. By that, I mean that there is not only a lot happening on the surface, but much going on underneath. There are internal as well as external narratives, and the novel requires, and deserves, careful reading. Indeed, to get everything out of it you should probably read it at least twice. It is good enough to deserve that attention.

It's set partly in Berlin, partly in London, in the first years of this century. It begins with 9/11, and, though this device is already in danger of becoming a cliché used by lazy novelists to make an easy point, it isn't like that here. The London part of the book takes place in the weeks either side of the beginning of the Iraq war, and a genuine sense of anxiety and menace pervades the novel.

The early Berlin scenes are light and charming – even though there is a disquieting uncertainty, nothing being quite what it seems. Weather is important; Hacker uses the steely rain as a means of conveying or expressing her characters' mood. But in these early pages there is also sunshine and happiness, for the two principal characters Jakob and Isabelle, lost to each other for years, have met again, renewed their love and decided to marry.

Then Jakob, a lawyer occupied with questions of restitution of confiscated or stolen property, mostly Jewish, after the unification of Germany, is sent to London to work for an associate. Isabelle goes with him, and each finds the circumstances of life there, and the people they meet, creating a distance between them.

Jakob and his new boss, Bentham, are concerned with the question of what restitution means. Why do people seek it? Is it merely for compensation, or because they hope somehow to achieve the impossible, recapturing a past that has long been submerged, a world that has been lost?

The novel having the density one associates with 19th-century fiction, there are sub-plots, with other characters, initially quite unconnected to those we have met first, then brought in contact with them through the accident of propinquity. There is Jim, a drug dealer, fantasist and former rent-boy, searching for the girl he lived with, who has disappeared after she was taken to hospital following an accident for which he may or may not have been responsible. He is presently squatting in a flat belonging to an acquaintance which happens to be in the street where Jakob and Isabelle have rented a house.

Then next-door to them is a strange family, with a violent father, small, possibly retarded daughter and a son who loves his sister and hopes to free her to live a normal life. As Jakob becomes more involved with his work and the enigmatic Bentham, Isabelle spends time with Jim, who is drawn to her because of a resemblance, fancied or real, to his lost love.

There is much that is impressive here: the sense of place and at the same time of moral displacement: the psychological acumen with which the characters are revealed, the sympathy with which they are treated, the philosophical question of the relation of people to their past, the intelligence and energy with which their internal contradictions are explored.

It is very much a story of our times, a novel which portrays contemporary fears, anxieties and uncertainties. But it is not in any sense journalistic, for it measures itself against the classic novels of German literature, and is not diminished by the comparison.

Like all the best and most engrossing novels, it involves the reader from first to last, and poses questions about the way we live and our ability or incapacity to live as we think we should, about how we can reconcile reality with our imagination, our dream of what it might be.