From select tag to link to

change_shipping_country

<%= form_for :country, :url => {:action =>"change_shipping_country", :controller => "/application"}, :html => {:method => "post"} do |f| %>
  <%= select_tag :code2, options_from_collection_for_select(Country.ordered, :code2, :name, @shipping_country.code2), :onchange => "this.form.submit()" %>
<% end %>

<ul>
<%= form_for :country, :url => {:action =>"change_shipping_country", :controller => "/application"}, :html => {:method => "post"} do |f| %>
  <li>
    <%= submit_tag "#{t :germany}", :name => "germany_button" do %>
      <img src="/images/location-de.png">
    <% end %>
  </li>
  <li>
    <%= submit_tag "#{t :austria}", :name => "austria_button" do %>
      <img src="/images/location-at.png">
        <% end %>
  </li>
  <li>
    <%= submit_tag "#{t :switzerland}", :name => "switzerland_button" do %>
      <img src="/images/location-ch.png">
    <% end %>
  </li>
  
<% end %>
</ul>

and in my Conrtrooller  this:

if params[:germany_button]
  params[:code2] = "de"
end

...

You're only creating links in a form which doesn't submit any values with the form.

One possible solution is to use multiple submit buttons, and style them as links.

See e.g. here: http://railscasts.com/episodes/38-multibutton-form