Federalism in the European and global context

Federalism is an organizational principle that influences more than just how a nation is structured. The federal principle also serves as a basis for any number of supranational organizations, such as the European Union (EU), the African Union (AU), ASEAN (Association of Southeast Asian Nations) and NAFTA (North American Free Trade Agreement).

The Bertelsmann Stiftung is benchmarking a number of federalist systems around the globe to identify what is necessary for creating an optimal system capable of responding to the changing background conditions affecting policymaking in Europe and elsewhere.

In particular, Europe's ongoing integration process is having an increasing impact on Germany's internal negotiating and legislative processes. As a result, any reform of the country's public finance structures must also address the issue of how it can reconcile its public funding mechanisms with the realities of the constantly changing European and global framework.

To what extent can the country's regions be made competitive in the European context as part of a long-term reform of its public finance structures, and which fiscal and budgetary conditions must be in place for this to happen? Which responses take federalist and legal requirements into account, on the one hand, while ensuring a workable long-term federal-state relationship, on the other? Which reform measures are needed to guarantee that Germany's financial and budget laws remain compatible with requirements at the European level?