Nostalgia vs. reason
October 25, 2014
The premier of Saarland, Germany's smallest federal state, has used smart tactics to set off a national debate. In the middle of negotiations over state financial reconciliation, Annegret Kramp-Karrenbauer, a Christian Democrat (CDU), has called for a radical reorganization of the German Federal Republic. Rather than 16 states, Germany could get along with six to eight, she argues - not without a touch of self-interest.
If it were that simple, then hers would be a tactical call for self-destruction: Saarland has the highest per-capita debt level in Germany, at 6,220 euros ($7,900). That makes it a candidate for takeover, presumably by its neighbor, Rhineland-Palatinate. This is definitely not what she wants. Rather, Kramp-Karrenbauer is seeking to increase pressure on the other German states.
Bavaria and Hesse, two of the richer ones, no longer want to pay for the have-nots. That would spell financial and political ruin for comparatively small Saarland (with its less than one million inhabitants). Kramp-Karrenbauer ultimately only seems to be the radical. She's breaking with one tradition in order to keep another - the infamous Länderfinanzausgleich, a financial redistribution mechanism between states - alive and well.
In truth, it would be better to slowly let go of Germanys many-state system.
Unfortunately, only one such fusion was successful - and then, only with outside help.
Others had the say
When, after 1945, the occupying powers held sway in Germany, they took little account of local sensitivities about identity and historical affiliations. They had their own interests. In the southwest, the Americans and French were the political leaders. They were instrumental in the founding of the federal state of Baden-Württemberg in 1952, which at the time had consisted of Württemberg-Baden, Baden and Württemberg-Hohenzollern. Hardly anyone mourns that merger today. The southwestern state, which borders Switzerland, is an economic success story.
And as for Bremen, its independence is only partially related to its proud Hanseatic history. The northern German city-state was in the British zone of occupation, but the Americans demanded a means of sea access and so were given the responsibility for the city, including the Bremerhaven seaport. The privileged location inspired the independence that continues today - independence that Bremen considers a financial burden.
Small suits us, thanks
Enveloped entirely by the state of Lower Saxony, Bremen loses tax revenues year on year. A large percentage of those who make their living in the city-state live outside of it, in Lower Saxony. Legislation asserts that taxes shall be raised where one lives - grounds for celebration in Lower Saxony's capital, Hanover, and for frustration in Bremen's finance ministry. Still, only the rare Bremen maverick speaks of conjoining the historic Hanseatic city with its far larger neighbor. It would be smart, though!
The centuries-long German tradition of scattered regionalism, a delayed venture at state building and entrenched post-1945 federalism as an intentional counterweight to centralization in Berlin - somehow these historical dimensions always play a role when it comes to the question: When will we finally make federalism a bit cheaper?
The resistance to consolidation might have a different foundation, though. When, in 1996, a union of Berlin and Brandenburg was proposed, the financially-strapped Brandenburgers rejected it. The Berliners' massive debts apparently scared them enough that it dampened any allure of being attached to the shiny metropolis.
New agenda needed
It's astonishing how nostalgic sentiments of long-lost grandiosity and diffuse fears of marginalization get in the way of reasonable policies. Today, even the richest German states can hardly finance their core business: education policy. In 16 state capitals, gigantic bureaucracies persist while sensible cross-border infrastructure projects collapse due to vested interests. We can no longer afford this Republic of the States. How about a "Federalism Agenda 2030"?