The Skirmish in Germany was a mission planned by Loki to steal Iridium in Germany in order to stabilize the Tesseract. Loki's plan quickly developed into a brief skirmish after Captain America, Iron Man, and soon Thor, intervened and detained him.
When Loki, after being exiled from the Nine Realms, encountered The Other, he was assigned to retrieve the Tesseract for a cybernetic race known as the Chitauri. At the Joint Dark Energy Mission Facility on Earth, the Tesseract acted up, forcing the facility to be evacuated. Loki appeared on Earth due to the acts of the Tesseract and possessed the minds of Erik Selvig and Clint Barton, alias Hawkeye. Loki and his now-possessed agents escaped the facility.
Nick Fury and Phil Coulson, who were present at the evacuation, recruited Tony Stark, Bruce Banner, Steve Rogers, and Natasha Romanoff for the Avengers Initiative. Meanwhile, Loki and Barton came to a point where they needed iridium to stabilize the Tesseract. They created a plan at Loki's Hideout to track down Heinrich Schäfer and steal iridium from his laboratory.
When Hawkeye and Loki arrived in Stuttgart, Hawkeye quickly eliminated the men guarding the facility, where a gala was concurrently taking place nearby. Loki, disguised as an attendee, knocked down and attacked Heinrich Schafer. After stealing his eye, Barton successfully escaped with the iridium.
Even with the Iridium raided, Loki terrorized the attendees and forced them to kneel. However, an old man stood up against Loki, claiming that he was just one of many evil men. Loki attempted to kill him with his Scepter, but the man was saved by Captain America. Black Widow ordered the demigod to surrender, but Loki dueled against Captain America instead. Iron Man interfered and Loki submitted himself to the Avengers.
While the Avengers, flying above the mountains, escorted Loki to the Helicarrier, bolts of lightning struck nearby. The storm was caused by Thor, Loki's adopted brother, who took Loki out of the Quinjet and confronted him to end his quest for the throne on a cliff. All of a sudden, Iron Man blasted Thor to the forest below and the two dueled. Captain America arrived to make amends with Thor, but only made him angrier as he attempted to kill him. Captain America was able to protect himself from Mjølnir with his shield, compelling Thor to assist the Avengers to stop Loki.
Loki was taken and escorted to a cell within the Helicarrier by S.H.I.E.L.D. Nick Fury was concerned of any upcoming danger, under the belief that Loki wanted to be held captive. Black Widow discovered the truth of Fury's concern after Loki threatened her and revealed that he had plans to unleash Hulk in escaping.
The Avengers conversed about the Scepter, Black Widow's encounter with Loki and the discovery of Phase 2, where S.H.I.E.L.D. wanted to use the Tesseract for weapons of mass destruction, until Hawkeye blew up a Helicarrier engine, triggering chaos and the death of Phil Coulson, before he was resurrected as a part of Project T.A.H.I.T.I..