Merkel Stresses Urgent Need for Federalism Reform

Addressing the upper chamber of parliament in Berlin on Wednesday, German Chancellor Angela Merkel spoke of the urgent need to restructure federal and state responsibilities.

"I believe that Germany can in future be governed in a simpler, more efficient and more transparent way," she told the Bundesrat.

The reform initiative is seen as one of the most important projects of Angela Merkel’s grand coalition government. A prior attempt about a year ago at disentangling federal and state responsibilities in German politics failed when a cross-party committee was unable to achieve a breakthrough because of a paralyzing balance of power between the two houses of parliament.

New Situation

The situation is completely different now as Christian and Social Democrats have entered a grand coalition at state level and can push things through with their huge majority in both the houses of parliament. Merkel said that the country could not afford to fail again.

"I call on all sides concerned to decide on the federalism package with all the care required, but without any unnecessary delay," said Merkel. "During my talks with state premiers last week, I sensed a strong resolve to complete the technical preparations for this reform before the summer break next year."

The need for reform is obvious, say many. At present, two thirds of all legislative bills have to be approved by both houses of parliament. But while the Social Democrats were in power at state level and a majority of federal states were governed by the conservatives -- more and more laws ended up in a cross-party arbitration committee. And there they were usually put on hold for long periods of time.

The Bundesrat thus took on an obstructive role which had not been envisaged by the founders of the German Constitution. The present coalition partners have now agreed that the lower house, the Bundestag, will again be able to pass many more bills without approval by the Bundesrat. In return, the 16 federal states are to have more powers in several policy fields. In future, they are to decide for themselves on educational policies, on the opening hours of shops, on civil servants’ salaries and a whole catalogue of other issues.

Won't all be smooth sailing

Bundesrat President Peter Harry Carstensen says he is looking forward to what he sees as a whole new ball game.

"The message has to get through that there will be a greater division of labour and powers between the two houses of parliament," he said. "There’s no point in the two torpedoing each other’s decisions all the time, as we’ve seen in the past. The current grand coalition seems ideal for moving the federalism reform forward. Instead of party-political tactics, there will be a greater emphasis on what’s in the interest of the whole country."

Most politicians say they don't expect it all to be smooth sailing from now on. The proposed first step in the federalism reform deliberately excludes thorny financial issues.

Still, both sides have agreed to work together to meet the financial criteria laid down in the European Union’s Stability and Growth Pact. And, officials agree that given the current budget constraints, there is little room for fiscal manoeuvring.