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GERMANY (Federal Republic of Germany) Rudolf Hrbek 1. History and Development of Federalism Federalism is one of the key features of the political system of Germany. This is based on historical foundations and was re-established in the post-World War II situation. Before political unification in 1871 (at which time the German Empire under Prussian leadership was established) “Germany” consisted of a patchwork of states composed of territorial units differing in size (from large Prussia to city-states such as Hamburg), character (dynasties or republican authorities) and power. The Empire was a federation of 25 states of which Prussia was the dominant entity. The states continued to possess considerable internal autonomy and formed the Bundesrat as the supreme sovereign institution representing the governments of the states. Federalism was characterized by the dominance of executives and public administrations, by the preservation of special features in the participating states, and by the lack of a single national centre. After World War I, under the constitution of the Weimar Republic, the federal elements in Germany were weakened by strengthening the Reich authorities (President, government and Reichstag as Parliament) at the expense of the states, which were now called Länder. Towards its end (1932-33), the Weimar Republic had, in fact, adopted features of a centralized state. The totalitarian Nazi regime following thereafter (1933-45) abolished all remaining federal elements and established a highly centralized system. World War II ended with the unconditional surrender of Germany. At this time, there were no German authorities, not even at the local level. The USA, UK, Soviet Union and France took over all powers and responsibilities in the country. They agreed to divide German territory into four occupational zones and to dissolve Prussia. From 1946 Länder were established in all four zones under the supervision of the respective occupational power. These decisions, although not designed to prescribe the future territorial structure of post-war Germany in all details, had a major impact on its future development. The Cold War deepened the gap between the Soviet and the three Western zones and made an agreement among all four powers on the future of Germany impossible. The three Western allies, after having merged their occupational zones for practical purposes, decided in summer 1948 to further stabilize the situation by establishing a German state in the area of the three zones they administered. In the Frankfurter Dokumente (June 1948) the three Western allies called upon the German authorities to prepare a constitution. They demanded that the provisions of the new constitution should protect basic individual rights, be based on democratic principles, and introduce a federal structure. These requirements could be understood as a reaction to the centralized and undemocratic Nazi regime but also to some shortcomings of the Weimar Republic. They were fully accepted by the German representatives. The federal structure was primarily expected to provide for a system of checks and balances and, thereby, contribute to the principle of separation of powers, and strengthen democracy. The body to formulate the new constitution was not a directly elected constituent assembly but rather was composed of representatives of the Länder Parliaments in the three Western zones (reflecting the strength of political parties in these Parliaments). This body was designated the Parliamentary Council (Parlamentarischer Rat). Although the Germans agreed on the establishment of a federal structure, the deputies in the Parliamentary Council disagreed on how to define the relations between the federal government and the Länder in terms of distribution of competences and allocation of powers. The solution laid down in the Basic Law (Grundgesetz)—this was the name of the new constitution which entered into force in May 1949—can be regarded as a compromise, according to which the strength of the central authority was modified by the establishment of the Bundesrat. According to the Basic Law, the Bundesrat is composed of representatives of the Länder governments (in line with the historic tradition of its “predecessor” in the 1871 Empire), with considerable powers in the legislative process at the federal level. These provisions, however, did not determine ultimately and comprehensively the balance between the two levels. This was to emerge, to develop and to change in the course of the political development of the new West German state (Bundesrepublik Deutschland/Federal Republic of Germany (FRG)) in the following years. The Soviet Zone was transformed into the German Democratic Republic (GDR/Deutsche Demokratische Republik), the second German state, with all the features of a communist regime. As early as 1952 the GDR adopted a centralist territorial structure by abolishing the five Länder which had been established after 1945 and replacing them with 15 administrative districts (Bezirke). This centralist territorial structure was in accordance with the dominance of the Communist Party—a real federal structure would have been incompatible with such a regime. Although the federal structure of the FRG is protected against abolition by a special constitutional provision (Article 79.3)—the so-called “eternity clause”—territorial reform should be possible, since with the exception of Bavaria and the two city-states (Bremen and Hamburg) which have historic continuity, all other Länder were artificial creations. On the basis of a special constitutional provision (Article 118) three newly established Länder in the southwest of Germany merged to become Baden-Württemberg in 1952. However, all subsequent efforts towards territorial reform—aiming at the formation of a smaller number of larger and more efficient Länder—failed. In 1957 the Saarland joined the FRG to become the eleventh Land, following the rejection (by two-thirds of the electorate) of a proposal to give this territory, under French control since 1945, a “European Statute” (which would have meant that it would adopt the special status of a “europeanized” area rather than joining either Germany or France). Following the collapse of the Communist regime in the GDR, and in the context of the reunification process in 1990, the five original Länder were re-established and the reunified Germany now consists of 16 Länder. An attempt to bring about a merger of Berlin and Brandenburg failed in a referendum held in these two Länder in May 1996, much to the disappointment of those who had hoped that a positive decision would increase the possibility of territorial reform throughout Germany. Since 1949 the federal system in the FRG has developed towards a pattern of united policy making and problem solving due to the following factors: C the reduction of the legislative powers of the Länder since the provisions on concurrent powers made the Federation the primary actor in terms of the uniformity of living conditions as key criteria; C the provisions of the “financial constitution” according to which the most important revenues are shared between the Federation and the Länder and which has, in addition, mechanisms of financial equalization between the two levels and among the Länder themselves; C the role of the Bundesrat which enables the Länder governments to participate in federal legislation; and C the tendency amongst the citizens to want to have uniform living conditions (e.g., all aspects of the infrastructure) and not to accept disparities; an attitude understandable after the situation in post-war Germany when there were large disparities between individual Länder. The united pattern of German federalism has emerged for a number of reasons: (1) the Federation has exploited the provisions on concurrent powers; (2) cooperation between the Federation and Länder and amongst the Länder themselves has increased, accompanied by shared financial responsibilities; and (3) the institution of “Joint Tasks” (Gemeinschaftsaufgaben) was introduced in the constitution by a whole set of amendments in 1969. In the 1980s there were attempts to strengthen the Länder by reducing the fields for “Joint Tasks”, by self-restraint on the part of the Federation in its legislative activity, and by improving the financial basis of the Länder. These attempts did not succeed, however. Both the overall economic situation and, since 1990, the challenge of reunification, have negatively affected the financial freedom of manoeuvre of all the entities in the federal system. The reform of German federalism has been on the political agenda since the mid-1980s, and will remain an issue of vital concern. 2. Constitutional Provisions Relating to Federalism The Länder as constituent units of the FRG have the quality of states, with their own institutions. The constitutional order of the Länder has to conform to basic principles, such as basic human rights, democracy, rule of law, and it has to provide for directly elected political representation of the citizens (Article 28). Each of the Länder has a parliamentary system of government, with a directly elected Parliament (with a four or five year legislative term) and a government accountable to it. The Länder constitutions differ, however, in terms of provisions on special aspects of the governmental system, such as referendums, government formation procedures, provisions on motions of no-confidence or votes of confidence, individual accountability of ministers, etc. There are also differences concerning rights; in the constitutions of the five new Länder we find, for example, provisions on both basic human rights and social rights (including employment, environment, housing, education, etc.). According to the “eternity clause” in Article 79.3 the federal system as such must not be abolished. Territorial reform is, however, possible which means that there is no guarantee of the existence or territorial integrity of individual Länder. The Basic Law envisages two procedural routes for territorial reform: a very complicated procedure (Article 29) which is seen as a barrier to reform; and a clause (following the model of Article 118 for reform in the German southwest, as mentioned earlier) relating to the special case of Berlin and Brandenburg (Article 118(a)), allowing territorial reform via bilateral agreement, including a referendum in both Länder. The constitution sets out the division of legislative powers between the Federation and the Länder. Matters falling into the exclusive jurisdiction of the Federation are listed in Article 73, matters falling into concurrent jurisdiction are listed in Article 74, and matters for which the Federation has the right for framework legislation are in Article 75 (a framework law gives only a general outline and requires subsequent Länder legislation, thus allowing the Länder to decide on details). Article 78 sets out conditions under which the Federation may legislate, namely “if and to the extent that the creation of equal living conditions throughout the country or the maintenance of legal and economic unity makes federal legislation necessary in the national interest”. Article 70 stipulates that “the Länder have the right to legislate insofar as this Basic Law does not confer legislative powers on the Federation”. Their exclusive competencies are, however, restricted to issues in connection with their own constitutions and related to the local level, to the organization of the administration, and to matters relating to police and public order, culture, the media and education. It is a feature of German federalism that the Länder are responsible for implementing federal legislation in their own right (Article 83). There are very few exceptions of direct federal administration, such as foreign service, army, border control, air traffic, waterways, inland navigation and federal finances including customs. The Länder participate in federal legislation via the Bundesrat. It is composed of members of the Land governments, and the number of votes varies as follows: each Land has at least three votes; Länder with more than two million inhabitants have four, Länder with more than six million inhabitants five, and Länder with more than seven million inhabitants six votes (Article 51.2). The votes of each Land have to be cast uniformly (in practice as a block vote by one Land government member) and cannot be split. Participation in federal legislation applies, first, to the right of the Bundesrat to initiate federal legislation and submit a bill, as the Bundestag and the federal government. Second, each bill, after having been adopted by the Bundestag, has then to be submitted to the Bundesrat. There are two categories of laws: those which require the explicit consent of the Bundesrat, with a majority of its votes; and those which do not. This second category gives the Bundesrat a suspensive veto, which, after a limited period of time, can be overruled by the Bundestag with an absolute majority (or two-thirds majority if two-thirds of the Bundesrat votes have been cast against). The major criteria for laws requiring approval in the Bundesrat are that the law would affect administrative powers of the Länder (they have to implement federal legislation) or have financial implications for the Länder. More than half of all federal legislation at present falls into this category. The constitution provides, in this context, for a special mediation procedure—the “Mediation Committee” (Vermittlungsauschuß), which is composed of an equal number of members from the Bundesrat (16, one for each Land Government) and the Bundestag (16, selected according to party strength). The function of the committee is to find a consensus which is submitted to both Houses for approval. This Mediation Committee can be called upon by the Bundesrat, the Bundestag and the federal government. Amendments to the constitution require the explicit approval of two-thirds of members in both houses. In terms of financial arrangements, the constitution provides that the most important tax revenues are shared between the Federation and the Länder. Thus income and corporation tax are shared half and half, and the Value-Added Tax (VAT) is shared in a ratio which has to be adjusted every three years by federal legislation requiring Bundesrat approval. Other tax revenues are apportioned either to the Federation (e.g., excise duties) or the Länder (e.g., property, inheritance, motor vehicle and beer taxes). Of particular importance are mechanisms and measures of financial equalization between the Federation and Länder and, horizontally, amongst the Länder themselves. Constitutional disputes, amongst them those related to the federal system, are resolved by the Federal Constitutional Court (Bundesverfassungsgericht), upon appeal by one of the disputing parties. The Court consists of 16 members elected by an electoral body composed jointly of members of the Bundestag and Bundesrat. In its decisions, the Federal Constitutional Court has repeatedly formulated and confirmed the principle of federal comity (Bundestreue) which is seen as representing a basic feature of the German federal system, even if there is no explicit clause in the constitution. This principle obliges the Federation and Länder, mutually, to consider, when conducting their affairs, the concerns of the other side. 3. Recent Political Dynamics There are three issues which have substantial implications for German federalism: the consequences of reunification; the challenge of European integration; and initiatives towards a comprehensive reform of the federal system. Reunification has increased the disparities, amongst them economic and financial, between the Länder. This has had the result that weaker Länder are more dependent on the Federation and thus the Federation could win additional weight, which could have consequences for the overall federal balance. Furthermore, the system of horizontal financial equalization (horizontaler Finanzausgleich) has been affected by the widening gap. All five new Länder belong to the group of net-receivers, with consequences for previous net-receivers (they may become net-payers or, at least, suffer some losses) and the “traditional” net-payers (their burden, transfer payments, may grow), Hessen, Baden-Württemberg, Bayern, Nordrhein-Westfalen and Hamburg. And, finally, the party system in the five new Länder differs from the pattern in the “old” Länder, with the Partei des demokratischen Sozialmus (PDS)—the successor of the Communist Party in the former GDR—becoming a third force beside the Christian Democratic Union (Christlich demokratische Union, CDU) and Social Democrat Party (Sozialdemokratische Partei Deutschlands, SPD), and the fact that the liberals (Free Democratic Party, Freie demokratische Partei, FDP) and the Greens are not represented in the respective Land Parliaments. This has had consequences for coalition patterns (SPD with PDS, or grand coalitions, if one party cannot form a majority on its own) which may have an impact on political developments in German politics as a whole. The deepening process of European integration has posed a persistent challenge to the legal status of the Länder and therefore to the federal structure of the FRG. The first challenge arises from the fact that the European Union (EU) has extended its functional scope considerably which means that EU activities fall into areas which have been reserved to the Länder in the internal allocation of competencies. The second challenge has arisen from the modalities of EU decision making. In the EU, the Council of Ministers is most important decision-making and legislative body, and Germany is represented in the Council by the federal government. This means participation of the federal government in decisions in fields belonging to the exclusive competence of the Länder. The third challenge lies in the field of implementation of European legislation in Germany; this is primarily the responsibility of the Länder which until recently had no opportunity to influence the legislation and thus saw themselves under a strong degree of control by the federal government. The Länder have reacted to this challenge successfully. First, they established in 1992-93 (in the new Article 23, supplemented by the “Law on the Cooperation of Federation and Länder in Affairs of the EU”) rights of participation in dealing with EU matters at the domestic level. The federal government now has to consider Länder concerns, formulated by the Bundesrat, and in matters which fall under the exclusive competence of the Länder, is even obliged to hold to the Bundesrat view. A further transfer of sovereign powers when this would alter the content of the Basic Law requires a two-thirds majority in support of the measure in the Bundesrat. Second, the Länder have established and developed autonomous EU activities (e.g., setting up liaison offices in Brussels and lobbying directly). Finally, they have acquired the right to participate formally and directly in the decision-making process at the EU level. They are represented in the Committee of the Regions established in 1993, and they can represent Germany in the Council when matters falling under their jurisdiction are on the agenda. In addition, the new Article 24.1(a) allows the Länder to transfer (subject to federal government consent) sovereign powers to cross-border institutions insofar as the Länder have the competence in the policy fields concerned. On the whole, the position of the Länder has been strengthened. In their relations with the federal level they have managed to increase their weight in the overall federal balance. The thorough and substantial reform of federalism has been on the political agenda since the 1980s with the Länder—amongst them primarily the stronger ones—pushing towards “competitive federalism” (Wettbewerbsföderalismus) instead of “participatory federalism” (Beteiligungsföderalismus). They demand an increase in their autonomous competencies, combined with the reduction of federal level activities (e.g., in the areas of concurrent legislative powers). Second, they are interested in extending their freedom of manoeuvre in cross-border activities and “external” relations. Here they refer to functional needs in connection with the EU “Internal Market” policy (i.e., abolish internal economic borders and create a unified market for all EU member countries) and the new geographical centrality of Germany with a larger number of neighbouring countries in an enlarging EU. The third topic, which is very controversial amongst the Länder themselves but vis-B-vis the Federation as well, has to do with the financial system. The stronger Länder (as net-payers) are trying hard (by appealing to the Federal Constitutional Court and through political negotiations aiming towards a consensual new equalization system) to reduce their burden. Since all changes would affect vested interests, one can only expect modest reform steps. 4. Sources for Further Information Jeffery, Charlie (ed.), Recasting German Federalism. The Legacies of Unification, London/New York: 1999. Laufer, Heinz and Ursula Münch, Das föderative System der Bundesrepublik Deutschland, Opladen 1998. Wehling, Hans-Georg (ed.), Die deutschen Länder. Geschichte, Politik, Wirtschaft, Opladen 2000.