I don't actually know why the movie is called "Fog in August" as that image is never referenced in the movie. It is taken from the eponymous book it's based on, perhaps it is explained there.
The historical backdrop of the movie is "T4", the Nazi campaign to kill those deemed "unworthy to live" because they were handicapped, suffered from a psychiatric condition or -- in many cases -- were just unruly or even merely unpopular with the authorities. The film acts as a docudrama, trying to get some historical facts across while narrating the coming of age-story of Ernst Lossa, a around fourteen-years-old rapscallion. In real life, his father was eventually murdered by the Nazis because he was a traveling artisan.
The film creates some dramatic tension by pitching two nurses against each other in an unlikely fashion. Stern-looking "mother superior" Sophia is a devout catholic who does the right thing by trying to protect her wards, while doe-eyed sister Edith acts as the angel of death, killing children on command by giving them raspberry juice mixed with barbiturates.
There is nothing wrong with this movie, and it has a great cast to boot. On the other hand, it's simply another moral showcase about Nazi evils, and you have to be somewhat masochistically inclined to watch it voluntarily. I'm worried that a large part of German cinematic production these days is uninspired "propaganda for the right cause". Hopefully, this movie will inspire many viewers to research the history of T4 on their own.
