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Lukas Windfeder struck the first goal midway through the final quarter from a disputed penalty corner for the team ranked third in the world.
Then came a fine individual score from Florian Fuchs whose superb finish earned him the man of the match award.
Ireland can still make the semi-finals by avoiding defeat against Belgium.
Germany enjoyed 60% of possession during the match and had 23 circle entries but goalkeeper David Harte and Paul Gleghorne marshalled the Irish backline expertly throughout.
Ireland coach Craig Fulton praised his team's performance which he described as a "great effort".
"Belief is strong and we improved again tonight, so I'm really proud of the whole team," added Fulton.
That final pool fixture takes place on Tuesday at 13:15 BST.
The nations are tied on three points but a draw against the Belgians would be good enough for the Irish on goal difference.
Victory in the tournament would ensure Craig Fulton's team a place at next year's Olympics, although they have other possible routes to Rio.
Ireland's chances of progressing to Rio have been boosted by the elimination of both Russia and France from the European tournament.
And if Ireland don't win the European Championships, victory for Australia in the Oceania Cup in October will guarantee the Irish an Olympic spot.
Ireland conceded two late goals as Olympic champions Germany won Sunday night's Pool B game 2-0 at the EuroHockey Championships in London.