Germany has a strong tradition of regional government dating back to the founding of the German Empire in 1871, which itself was borne out of the many different independent German kingdoms that formerly comprised the Holy Roman Empire. In the immediate aftermath of the Second World War the United States, United Kingdom, Soviet Union, and France assumed all governance powers and responsibilities in the nation, dividing the country into four zones of occupation. In 1946 a number of regions known as Länder, based on the traditional delineations that existed within the independent German kingdoms, were established in all four zones under the supervision of the respective occupying power.
The three Western allies facilitated the formation of the Federal Republic of Germany in 1948 (commonly known as West Germany) and a new constitution, the Basic Law, came into force in 1949. The Soviet Zone became the German Democratic Republic (commonly known as East Germany) under a centralist communist regime. The fall of the Berlin Wall in 1989 and collapse of the Iron Curtain in Europe paved the way for the reunification of Germany and the adoption of a federal structure.
Since unification in 1990, the Federal Republic has consisted of 16 regions (Länder): the ten Länder of the former West Germany; five new Länder created out of the former East Germany; and Berlin. A characteristic which distinguishes the Länder from the constituent units of other federal nations is their right to recognition at the international level. Therefore, they have a status as subjects of international law independent of their position as members of a federation. Länder are represented in the upper house of the German parliament at federal level (Bundesrat).
Germany is a federal parliamentary republic. The Federal President is the Head of State, and the Federal Chancellor is the Head of the Government. The bicameral German Parliament consists of the Federal Legislature (the lower house – known as the Bundestag), and the Federal Council (the upper house – known as the Bundesrat). The Federal Legislature is directly elected by the German people, while the Federal Council represents the governments of the Länder. The Federal Legislature is more powerful than the Federal Council, although in practice the consent of both houses is generally sought in the passing of legislation. Each of the Länder has its own government, premier, and legislatures with significant powers and jurisdiction over many areas of governance.
Attempts have been made to reform the federal structure in Germany over the past decade, with reforms designed to create a better balance between the powers and responsibilities of the Federal Government and the Länder. Federal Reform I came into force in 2006 and Federal Reform II was concluded in 2009. Currently policy makers at all levels of government in Germany are working on Federal Reform III, which focuses on fiscal equalization, and is scheduled to come into force by the end of 2019.