The recent reform of German federalism through constitutional amendment
Hellmut Wollmann
Humboldt Universität zu Berlin
[email protected]
Discussion paper (first “raw” draft!)
to be presented to the panel on “constitutional change”
within the 4th International Conference “on Democracy as Idea and Practice”
to be held on January 10-11, 2013
at the University of Oslo
1. Some structural background data
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1.1. Number and size of the German Länder.
Following 1945 the reestablishment of the Länder in the Occupational Zones of the three
Western Allies preceded the creation of the Federal Republic which finally took place in May
1949. Drawing the borders of the new Länder was guided by the logic of the Occupational
Zones rather than by historical or economic rationale, except for the political aim to eliminate
the territorial traces of the former Land of Prussia. The only exception to this rule was the
Land of Bavaria which largely fell in line with its historical borders.
As a result, 11 new Länder were put in place, three of them are so called City States (Berlin,
Hamburg, Bremen). In the wake of German Unification in 1990 5 East German Länder have
been added.
The Länder have an average population size of 5.2 million inhabitants, ranging from 18
million (Land of Nordrhein-Westfalen) to 660.000 (City State of Bremen). The average size
of East German Länder is considerable smaller than that of their West German counterparts.
Table 1: Population in 2009
Federal Republic (in total)
Nordrhein-Westfalen
Bayern
Baden-Württemberg
Thüringen
Hamburg
Mecklenburg-Vorpommern
Saarland
Bremen
81,8 million
17,8 million (= 21,9% of entire population)
12,5 million (= 15,3%)
10,7 million (= 13,1%)
2,5 million (= 2,7%)
1,7 million (= 2%)
1,6 million (= 2,02%)
1 million (= 1,25%)
660.000 (= 0,81%)
Data from Fischer-Weltalmanach 2011
From beginning there has a constant discussion about redrawing and rescaling the Länder,
particularly the small ones, in order to increase administrative efficiency and to lower related
costs. But except for the early 1950s when some territorial reorganization took place in SouthWestern Germany (leading to the creation of the Land of Baden-Württemberg) no such
territorial amalgamation has been achieved.
In 1995, following German Unification, the initiative was seized by the Länder governments
of Berlin and Brandenburg to merge the two Länder. After the parliaments of both Länder
approved the merger the question was submitted, as required by the Federal Constitution,, to a
referendum in May 1996 in both Länder. While the population of Berlin approved the merger
the population of Brandenburg rejected it by a broad majority.
2
At this point it should be highlighted that, although most of the Länder been somewhat
artificial creatures of the post-war reconstruction period their respective populations have,
surprisingly fast, developed a sense of regional identity which, as the case of Brandenburg
suggests, opposes territorial changes and mergers.
1.2. Socio-economic profile of and differences between the Länder
In socio-economic terms the Länder are marked by a significant degree of difference and
disparity. While, prior to German Unification a certain North-South “slope” and “gap” existed
(with the “rich” Länder particularly in the South), after 1990, with the “accession” of the East
German Länder, a clear “West- East” discrepancy has taken shape. In the political discussion
some have gone as far as speaking of a “Mezzogiornization” of East Germany.
The interregional disparity is manifested, for one, in the striking variance of Gross
Domestic Product (GDP) between the Länder.
Table 2: GDP per gainfully employed person (following figures in Euro for 2008)
Federal Republic (in total)
Hamburg
Hessen
Bayern
Nordrhein-Westfalen
Thüringen („East Germany”)
Mecklenburg-Vorpommern („East Germany”)
61.900 Euro
78.500 Euro
71.000 Euro
66.900 Euro
63.000 Euro
48.900 Euro
48.700 Euro
Data from Fischer-Weltalmanach 2011, p. 124
Second, this interregional discrepancy also shows all but dramatically in the respective
unemployment rate
Table 3: Unemployment rate (in percent in June 2010)
Federal Republic (in total)
West German Länder
7,5 percent
6,5 percent
3
East German Länder
Bayern
Baden-Württemberg
Nordrhein-Westfalen
Mecklenburg-Vorpommern („East Germany“)
Bremen
Sachsen-Anhalt („East Germany“)
Berlin
11,6 percent
4,2 percent
4,7 percent
8,6 percent
11,6 percent
12,0 percent
12,3 percent
13,3 percent
Data from Fischer-Weltalmanach 2011, p. 145
2. Intergovernmental distribution of powers and functions
The assignment and distribution of powers and functions in a federal system made up of a
federal and a regional/State/Land level can be guided by two different logics. (The municipal
level can be left aside at this point because in federal systems the local government level is, as
a rule, perceived and treated to being part of the regional/State/Länder level).
On the one hand, the assignment and distribution of powers and functions may be guided by
the principle of a vertical separation which assigns important functions (of legislation,
including taxation, administration, judiciary etc.) to either the federal or the regional level.
Some speak of the “layer cake” principle.
The US are a case in point. Their intergovernmental setting largely follow the “layer cake”
scheme in that the federal level possesses, besides legislative powers, administrative
structures (“regional and local field offices”) of its own for the implementation of federal
legislation and policy programmes, federal taxes, federal courts etc., while the individual
States, in turn, have, besides a wide range of legislative powers of their own, their own
administration, State taxes, and State judiciary.
On the other hand, the distribution of powers and functions may assign legislative functions
primarily to the federal level and administrative functions primarily to the regional level, thus
making for an interlocking and interaction between the two levels. Some refer to this as a
“marble cake” scheme.
In its intergovernmental architecture the Federal Republic of Germany has significant
elements of such “marble-cake” scheme.
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For one, in the vertical distribution of competences the assignment of the legislative powers
gives a primacy to the federal level while the Länder have been ascribed a quasi monopoly in
administrative functions (which, in turn, they have in part transferred and delegated to the
local government level). As, under this scheme, the federal level is constitutionally barred
from having administrative units and personnel of its own in the subnational space it is
operationally reliant on the Länder for the the implementation of its legislation and policies
while the activities and functions performed by the Länder are predominantly regulated by
federal legislation.
It should, at this point, be added that with the advancing European Integration and the
emergence of a “multi-level government system” which consists of the European Union, the
national States and their subnational levels, the “marble cake” scheme applies also to the
newly evolving “European” intergovernmental architecture in that the European Union, in its
growing stream of European norm-setting (through EU regulations and directives) and EU
structural programmes, is also prevented from having organisational units and personnel of its
own within the members States and is thus reliant on the implementation by the member
States, in the German case first of all by the Länder and local government levels.
During the further development of the federal system the “marble cake” scheme has even
been accentuated.
By
the
major
constitutional
reform
of
1969
the
sö
called
“Joint
Tasks”
(Gemeinschaftsaufgaben) were introduced (article 91a Federal Constitution) by which, in a
number of policy areas (regional economic development, coastal protection) an institutional
scheme and mechanism was put in place that was jointly operated and financed by the federal
government and the Länder (mixed administration, mixed funding, Mischverwaltung,
Mischfinanzierung).
Similarly a new funding competence of the federal government level was constitutionally
inserted (article 104a section 4 Federal Constitution – original version) by which the federal
level was given the right to intervene, through federal funding, in policy fields of the Länder
under certain – constitutionally defined – conditions. Under this provision, inter alia, a
massive urban renewal programme has been inaugurated since the early 19890s based on a
“co-financing” (Mischfinanzierung) formula that hinged on federal, Länder as well as local
government co-funding (“matching grants”).
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3. Intergovernmental distribution of public sector personnel
The peculiarity of the German federal system is evidenced by the distribution of public sector
personnel between the levels of government.

Only 12 percent of the entire public sector workforce are federal personnel

while almost 90 percent are employed by the sub-national levels,

that is, 53 percent by the Länder and

35 percent by the local authorities.
Besides the federal ministries and federal (central level) agencies (Oberbehörden) the federal
level is allowed to have subnational field offices only in constitutionally enumerated areas
such as national border police, customs offices and, as important exception, the Federal
Labour Office (with regional and local offices).
The personnel employed by the Länder (amounting to about half of the public sector
personnel) is, to a considerable part, made up of the education sector (teachers etc.) and of the
police.
Finally the personnel employed by the local government level (about one third of the entire
public sector personnel) deal with the wide scope of local government tasks, be it within their
local government responsibilities proper, be it delegated to them by the respective Land.
4. Intergovernmental decision making
The federal legislation lies in the hands of the democratically elected federal Parliament
(Bundestag) as well as of the Federal Council (Bundesrat) which, as a crucial element of
Germany’s federalism and its “vertical division of power”, acts as the Second (“Upper”)
Chamber in federal decision making.
It is, as was already mentioned, a peculiarity of Germany federalism that the seats and votes
in the Federal Council are exercised by representatives of the Länder governments (and not of
the Länder parliaments!). The Federal Council has 69 seats which range from 6 to 3 seats per
Land according to population size, but disproportionately favouring the small Länder (even
Bremen with 330.000 inhabitants has three seats) over the larger Länder (for instance,
Nordrhein-Westfalen, with 18 million inhabitants and with just 6 seats in the Federal
Council).
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The exercise of federal legislation has been regulated constitutionally by two sets of
(complicated) provisions.
For one, a distinction between “exclusive”, “concurring” (“konkurrierende”) and “framesetting” (Rahmengesetzgebung) has been made. Second, as to the involvement of the Federal
Council (Bundesrat) the distinction has been made between legislative drafts with regard to
which the rejection by the Federal Council can be overruled by the Federal Parliament
(Einspruchsgesetze) and those on which a “no” of Federal Council cannot be overruled by the
federal Parliament (Zustimmungsgesetze), thus amounting to an “absolute veto” power of the
Federal Council in such a case.
With regard to three types of federal legislative competences various complications have
come up.

The “concurring” (konkurrierend) legislative competence which relates to a
constitutionally defined broad scope of legislative matters means that in principle both
the federal legislator as well as each of the Länder may pass legislation (the former
federal, the latter individual Land legislation), but that the federal legislator prevails
and supersedes the Land legislator in case it decides to do so. Originally federal
“concurrent” legislation was perceived and expected to be the exception rather than
the rule thus leaving individual Land legislation sufficient space to act. However, in
the legislative practice that has unfolded the federal legislator has increasingly made
use of its “concurring” competence thus sidelining individual Land legislation and
marginalising the role of Land parliaments.

The “frame-work legislative competence” (Rahmengesetzung) the federal legislator
was expected to just set “legal frames” while leaving it to the individual Land
legislator to “fill in” the details. In the legislative practice it became manifest that,
besides constituting a permanent “bone of contention” between the federal legislator
and the Land legislator as to the scope and limits of “framing”, it has led to
complicated web of federal law and Land law provisions in the respective area.
Regarding involvement of the Federal Council (Bundesrat) in federal legislation the provision
on legislative drafts requiring the approval by the Federal Council (Zustimmungsgesetze)
proved to be a source of legislative conflicts and blockages particularly for two reasons.
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
While originally it was expected that not more than one third of the legislative drafts
would fall under the “approval” requirement and its “absolute veto” power of the
Federal Council, it has turned out in the legislative practice that up to 70 percent or
more of the legislative drafts were seen and treat as “approval-requiring”.

Second, and politically even more consequential and conflict-laden, the risk the two
legislative Chambers blocking each other in the legislative process has been greatly
enhanced in periods in which the majority of votes in the Federal Parliament and the
Federal Council was commanded by different parties, by the “government majority”,
on the one hand, and the “opposition majority”, on the other. In such a constellation of
what in France is called “cohabitation” the two chambers have been turned into party
political arenas and into a tug of war between the federal government majority and the
federal parliamentary opposition.
5. Policies to counteract the interregional disparities
In order to counteract the phenomena and effects of socio-economic interregional disparity
the Federal Constitution made a point, from the very beginning, to lay down the political
mandate and imperative for federal policy making to promote policies to level off such
interregional disparity. In order to appreciate the underlying imperative of intergovernmental
solidarity one should keep in mind that, as a result of Hitler’s war, post-war Germany was
beset by unprecedented physical destruction and economic and social misery which was
enhanced by the millions of Germans who fled or were expelled from former Eastern
provinces.
This political and constitutional solidarity-inspired mandate has found expression particularly
in two constitutional provisions.
For one, in the Federal Constitution it is laid down in article 72, section 2
The Federation shall have the right to legislate on these matters if and to the extent that the
establishment of equal living conditions throughout the federal territory or the maintenance
of legal or economic unity renders federal regulation necessary in the national interest.
Furthermore in the Federal Constitution it is stipulated in Art 107 section 2 that
federal legislation shall ensure a reasonable equalization of the disparate financial capacities
of the Länder, with due regard for the financial capacities and needs of municipalities
(associations of municipalities). It shall specify the conditions governing the claims of Länder
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entitled to equalization payments and the liabilities of Länder required to make them as well
as the criteria for determining the amounts of such payments. It may also provide for grants
to be made by the Federation to financially weak Länder from its own funds to assist them in
meeting their general financial needs (supplementary grants).
At this point, only a few data on the functioning of the “financial equalization” between the
Länder must suffice.
Three of the Länder typically situated in the South of the Federal Republic
have recently been “net donors” into the equalization scheme, that is (following figures of
2011)

Land of Bavaria (with 3.7 billion Euro) in the lead,

Land of Baden-Württemberg

Land of Hessen.
By contrast other Länder, typically those in East Germany, including Berlin, have been “net
receivers” from the “equalization” scheme,

with the City State of Berlin topping the net receivers’ list (with 3.0 billion Euro)
Small wonder that the equalization theme has been a permanent bone of contention between
the Länder in the rich Länder/poor Länder divide.
6. Federalism reform
Against this background and in response to mounting criticism the federal government and the
Länder governments in mid-October 2003 agreed to set up a Reform Commission which,
made up of 16 representatives from the Federal Parliament and the Federal Council each, was
mandated to ‘modernise the federal system”.
A major topic on the reform agenda, thus, was to disentangle the legislative competences
between the Federation and the Länder. On this score, it was first of all the interest of the
Länder to do away with the complicated “frame setting legislation” competence of federal
legislation. Furthermore they aimed at extending the policy matters falling under their
exclusive legislative competence.
Another crucial theme on the reform agenda related to the role of the Federal Council in the
federal legislative process. In this regard it was particularly the interest of the federal
government and parliament to reduce the scope of legislative drafts requiring the approval by
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the Federal Council and to, thus, reduce the percentage of legislative drafts “menaced” by an
“absolute veto” of the Federal Council.
In the face of these conflicting interests of major stakeholders entrenched in the federal
system the Reform Commission had to go through repeated rounds of give-and-take
bargaining and finally, in July 2006, reached a compromise. The ensuing constitutional
amendment went in force on September 1 , 2006.
As a result, on the one hand, the Länder made significant gains in enlarging their exclusive
legislative matters.

With the abolition of the “frame setting legislative competence” of the Federation the
Länder acquired a comprehensive exclusive legislative competence in the field of
education, including higher education (universities).

Furthermore, they attained the exclusive legislative competence in the legal regulation
of public employees of the Länder and the local government levels and in matters
such as shopping hours, non-smoking in restaurants etc.
On the other hand, the federal government reaped the concession from the Länder to reduce
the scope of legislative matters falling under the “approval-requirement” and thus under
potential “veto” by the Federal Council.
In the meantime the federalism reform has shown some noticeable effects.
For one, the percentage of legislative drafts falling under the “approval requirement” of the
Federal Council has been reduced from about 70 to 40 percent which has been hailed by the
federal government as alleviating the legislative process.
Furthermore, the Länder have, in the meantime, made use of their enlarged exclusive
legislative powers.

This holds particularly true for the regulation of public employees in Land and
municipal administration. In the meantime individual Land legislation has been
adopted which has introduced Land-specific regulations, for instance on the payment
scale of teachers.

Moreover the Länder have individually passed regulations on shopping hours, nonsmoking in restaurants etc.
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During the discussion on the constitutional reform as well as during the subsequent legislative
practice in the Länder the question has been raised as to whether the extension of the
legislative powers of the individual Länder might usher in the transition from the traditionally
solidarity-based and consensus-based federalism to a competitive and as it were
individualistic federalism. Among the Länder particularly those that rely on equalization
transfers from other Länder have rejected the idea of a “competitive federalism”, whereas the
Länder which are obliged provide such equalization payments tended to advocate the concept
of a “competitive federalism” as a means to instigate their less well performing counterparts
to try to catch up.
One example of the tensions which have arisen between individual Länder is the employment
and recruitment of teachers. As some Länder proceeded to offer their teachers higher salaries
and better working conditions they directly or indirectly encouraged excellent teachers of
other Länder with a lower salary scale to seek and accept employment in a higher-salaried
Land.
In the field of higher education (universities) the individual Länder, it is true, have pursued
noticeably different courses in their university policy. However, there have been
strong
countervailing almost recentralizing trends. An important example is the “Initiative for
Excellence”. Based on an constitutional provision (art 91a Federal Constitution) which was
also introduced in the reform of 2006 and on agreements with the Länder the federal
government has inaugurated a major program which is meant to foster top class university
research and to establish internationally visible research beacons in Germany as a
whole. In the meantime two rounds of competition among universities have been
carried out meant to select such “centres of excellence”. There is wide agreement that
the “Initiative for Excellence” has made an
important contribution to the internationalization of the German universities. Approximately
4.200 scientists have been recruited in the funded projects, about 25 % of them from other
countries. A total of almost 2 billion Euros will be made available to universities in the first
two selection rounds between 2006 and 2015 75 percent of which will be provided by
the federal government. Thus, although higher education, not least the universities, have
become an exclusive legislative responsibility of the Länder since the 2006 reform, the federal
government continues to play a probably decisive role on shaping the profile and potential of
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the universities.
8. Concluding remarks
Structurally the German federal system has been marked typically by two features.
In Germany’s federal system the political decision-making process has been shaped by the
existence of two federal decision-making organs, that is, the democratically elected federal
parliament (Bundestag) and the Federal Council (Bundesrat) which is controlled by the
Länder governments. Furthermore, the Federal Constitutional Court whose twelve members
are elected, half, by the federal parliament and, half, by the Federal Council, is another pivotal
player in federal decision-making. Along with other powerful actors (trade-unions, business
community) this array of powerful stakeholders has often swayed on and retarded the
decision-making process to the point of making the federal republic appear as a “semisovereign state” (Peter Katzenstein) and even at the brink of “immobilism” (Fritz. Scharpf)
The federalism reform of 2006 was an attempt to facilitate, if not, as it were, “unfetter” the
legislative decision-making process by reducing the repertoire of legislative drafts that in past
allowed the Federal Council to wield its absolute veto. In this sense the federal legislative
process appears to have been unburdened and accelerated.
Another crucial criticism highlighted the “entanglement” of legislative competences between
the federal and the Länder as exemplified by the federal level’s competence to pass “framework legislation”. Also on this score the federalism reform of 2006 succeeded in
“disentangling” and simplifying the legislative setting by, first of all, enlarging the scope of
exclusive legislative competences of the Länder and of their parliaments.
Over the years the legal and legislative system of the Federal Republic has shown a
“centralizing” tendency in the sense that more and more subject matters have been regulated
by federal legislation, not least by making use of the “concurrent” legislative competence
while superseding and sidelining pertinent Land legislation. This tendency towards a
somewhat “homogenous” federalism has been fostered also by the constitutional criteria and
mandate (article 72 Federal Constitution) that the federal level should “establish equal living
conditions through the federal territory”.
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No doubt, the enlargement of the legislative power of the Länder and of their parliaments to
pass their own Land legislation with a potentially Land-specific profile and variance has set
the stage for the evolution of a more differentiated and “heterogeneous” federalism. In fact,
some of the advocates of an increased legislative “autonomy” of the individual Länder,
located mostly in socio-economically privileged Länder (particularly in the South of
Germany), envisaged a transition from the traditionally solidarity-based and consensusoriented federalism to a more “individualistic” and “competitive” one. However, in the face of
the existing (and possibly still deepening) socio-economic disparities between Länder,
particularly in the West-East divide such “de-solidarisation” has so far not noticeably
resonated and seems to have its limits and barrier in the apparently deeply rooted “solidaritybased” political culture.
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Germany. Convergence and Divergence. VS Verlag fuer Sozialwissenschaften: Wiesbaden, pp. 59-74
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pp. 133-141
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and ‘functionality’. In Hoffmann-Martinot Vincent, Wollmann Hellmut (Eds) State and Local Government
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