Federalism Reform I

On September 1, 2006, the first reform of Germany's federalist structures took effect, one of the most comprehensive reforms of the country's Basic Law since its founding in 1949. The Bertelsmann Stiftung will be closely tracking both the changes to the country's constitutional structures as they are implemented and the long-term impacts that will result.

Federalism Reform I was preceded by negotiating and consulting process that took place over a number of years. As early as October 2003, the Bundestag (Germany's parliament) and the Bundesrat (the institution that represents the states' interests at the federal level) convened the Commission on Modernizing Federal Structures. The commission's goal was to develop reforms that would "improve the federal and state governments' ability to draft and implement policies, make more readily apparent which level of government is responsible for which policy area and, as a result, increase the efficiency and effectiveness of government service" (Bundesrat Document 750/03). The commission focused on the following issues:    

- Examining how legislative responsibilities should be split between the federal and state levels
- Examining how all constituents should participate in creating federal legislation
- Examining which responsibilities should be jointly addressed by the federal and state levels and how bi-level funding structures should be designed

The commission expressly avoided concrete financial issues such as weighting mechanisms for transferring funds among federal and state governments and the question of how tax revenues should be structured and distributed.

Composition of the commission
The commission was made up of 16 members of the Bundestag and 16 members of the Bundesrat, each of whom was entitled to vote in the proceedings. In addition, as advisors to the proceedings, the federal government was represented by four members and the state governments by a total of six members, each of whom had the right to address the commission and file motions, but who had no voting rights. Finally, three representatives from leading local-level organizations were present at the proceedings and had the right to address the commission and file motions, although they were also not entitled to vote. To support its work, the commission included 12 experts who had the right to address the commission, but who had neither the right to file motions nor the right to vote.

Following an initial collapse of Federalism Reform I in December 2004, the negotiating process was resumed after elections in the autumn of 2005 led to the formation of a "grand coalition" government. As a result, the most comprehensive reform of the country's Basic Law since its postwar founding took effect on September 1, 2006.