Painting is again proving to be the cockroach of the art world. You just can't kill it. No matter how hard you hit it with video art or installation art it rises, Lazarus-like, and twice as strong. The most recent return of the sleeping giant can be traced to New York's Armory Show in 1999, when a tiny painting by Neo Rauch - the leader of the burgeoning Leipzig school of painters - was exhibited.

It caused a sensation. His work subsequently appeared at other art fairs and biennales around the world, as the hype, and his prices, rocketed.

In 2001, a painting by another emerging German artist Kai Althoff sold to collector Michael Hort for $10,000. Forbes magazine recently reported how an offer of $600,000 was recently made for the same painting. If it sounds like a return to the 1980s, when painting became the cultural wing of the stock market, it probably is.

Neo Rauch is to the early 21st century what Julian Schnabel, with his broken-plate paintings, was to that decadent decade, with its shoulder-pads and Reaganomics, but with less macho posturing. If you doubt his prominence, try doing a Google search on his rather unusual name. But neither he, nor Germany, is alone in this resurgence. Charles Saatchi, the art world's corporate barometer of change, is showing nothing but painting exhibitions for his next five shows, well in to 2006. Interestingly, he has broken away from his previous love affair with young British artists, and returned to the global search for new art that so marked his collecting policy, with first wife Doris, in the '80s. And like the early years of that decade, when the most collectable artists were Anselm Kiefer in Germany, Schnabel in America, Francesco Clemente in Italy, Peter Booth, Jenny Watson, Jon Cattapan, and Susan Norrie in Australia, Marlene Dumas in the Netherlands, Steven Campbell in Scotland, and Gerard Garouste in France, the painters of the 21st century to look out for are equally global.

They would include, at the top of the list, Rauch in Germany, and his compatriots Cornelia Renz, Daniel Richter, Tilo Baumgartel, Thomas Scheibitz (exhibiting at present in the German Pavilion at the 2005 Venice Biennale) and the blue-chip stock of Althoff. Luc Tuymans from Belgium, Dumas from Holland (both having been influential for some years), Dexter Dalwood and Glenn Brown in England, Tal R in Israel, Anne Wallace, Ben Quilty, Victoria Reichelt, Tiffany Winterbottom, Rhys Lee, and Richard Wastell in Australia, Ellen Gallagher and Karen Kilimnik in the US, Michael Lin in Taiwan - the list is long.

As a result of this painterly pressure cooker, all over the world art schools are employing sessional staff who know the ancient skills of stretching a canvas. They are seeking those artists who can pass on the century's old skills of creating a painting from minerals, pigments, oils and binding agents. It is the true alchemist's art, turning base materials into intellectual, emotional and financial gold. In short, painting, like The Terminator, is back. From artist-run-spaces to the auction houses of Christie's and Sotheby's, all forms of painting are being bought, argued over, and enjoyed. And it no longer matters if it is figurative or abstract, modernist or postmodernist - so long as it is painting. Around the world, as we will see, the pages of popular magazines, specialist journals and daily broadsheets are filling with "welcome back" articles on painting's timely return, happening at the very moment when what's been called "techno-fatigue" is hitting the previously dominant areas of digital art, video, and new media.

This, in turn, had usurped the early '90s movement of installation art.

The epicentre of painting's tsunami is the Leipzig School in the former East Germany. To give it its full title it is the Hochschule fuer Grafik und Buchkunst. Painting never fell into decline there, as it did elsewhere over the past 20 years, because of the strong history of social realist painting within the studios. Out of this strange mix of cultural Stalinism, followed by the heady years of German reunification, emerged Neo Rauch, the leader of this group. But he is far from alone.

When Germany recently celebrated and memorialised 60 years passing since the end of World War II, Spiegel magazine, in April, produced a special English "International Edition".

The editorial, penned by Stefan Aust, began: "At 11.01pm on May 8, 1945, the guns fell silent. The High command of the German Wehrmacht had surrendered unconditionally. Adolf Hitler's game was up. Europe lay in ruins. After 12 years of Nazi rule, including 2077 bloody days of war, 60 million dead had been counted."

In response to these horrors, several German painters rose to prominence over two decades ago - Anselm Kiefer with his "paintings" made from lead and steeped in mythology; Gerhard Richter with his death portraits of the Bader Meinhof terrorist group; and Martin Kippenberger with his anarchic paintings, performances and Superfictions.

But what of today's younger generation of German painters? In the same navel-gazing issue of Spiegel, between articles with titles such as "Hitler's Legacy" and "Goodbye Uncle Sam", painting is again elevated on a par with world events in a six-page article with the strap headline "Kraut Art Kraze: the international art market is mad about paintings that are nostalgic, grimly gaudy - and unmistakably German". The term "Eastalgia" is apparently being used to mark this nostalgic turn.

Ulrike Knafel begins her article by introducing us to one of the rising stars of the German art scene, Till Gerhard, who recently showed at New York's Stellan Holm Gallery in Chelsea. "Gerhard's work portrays attractive young people dancing in groups in the grass, or staging a sit-in in a forest setting reminiscent of a romantically dark jungle camp.

Occasionally these flower children don parkas and head off for demonstrations, as in 'Acid Rain - Cold Peace'. Berlin's Teufelsberg is visible in the background, complete with the listening posts long operated there by the US and British forces."

Originally published in the The Age, August 27, 2005.