‘The Mother of all Reforms’ - federalism reform in Germany

Australia’s federal order has been under strain in recent years. It has been suggested that many crucial yet politically controversial issues such as water, health and education cannot be regulated by the Commonwealth alone and agreements between the Commonwealth and the States could not be reached or failed.

Co-operative regimes established between the Commonwealth and the States appeared to be under threat when certain aspects of these regimes were struck down by the High Court. It has also been argued that the expansive reading of federal constitutional powers combined with a so-called “ratchet effect” continuously increased the power base of the Commonwealth.

There are now calls for an evaluation of the state of the federation focusing on the distribution of powers and fiscal arrangements. Most recently, several streams at the 2020 Summit noted their discontent with the federal order in Australia and made suggestion how to improve it. These suggestions were echoed and further explored at the subsequent round table Inquiry into Constitutional reform, convened by the House of Representative’s Standing Committee on Legal and Constitutional Affairs.

There are similar issues elsewhere where federalism defines constitutional arrangements. A particularly good example is the reform efforts in the Federal Republic of Germany. Labelled by the Bavarian Ministerpräsident (Premier) Edmund Stoiber “the mother of all reforms”, Germany tackled the mammoth task of re-shaping its federal order.

Background

Formed under the impression of a highly centralistic national-socialist regime featuring systematic power abuses, the western allied forces conceived (the Federal Republic of) Germany as a federal nation. Characterised by a complex web of horizontal and vertical divisions of power, the federal order was shaped to avoid power abuses - like those seen between 1933 and 1945 - in the future.

The German Constitution, or Grundgesetz (Basic Law), provides for a horizontal division of power that establishes the traditional tripartite of legislative, executive and judicial power.

The vertical division of power is achieved by assigning legislative powers to the Bund and the Länder respectively. Based on the understanding that the Länder are given legislative powers unless the Constitution otherwise provides (Article 70), the German Constitution confers on the Bund certain exclusive legislative powers, including, for example, the subject matters foreign affairs, citizenship law and postal and telecommunications laws (Article 73).

A second catalogue of powers provides for concurrent legislative powers (Arts 74). This catalogue includes subject matters such as civil and criminal law, the courts, procedural laws, employment law and nuclear energy. The Länder may legislate with respect to concurrent subject matters to the extent the Bund has not exercised the legislative power (Art 72).

Problems: political entanglement

This complex web of horizontal and vertical divisions of power has lead to the development of strong political and institutional interdependencies (sometimes also referred to as “political entanglement”).

The ultimate result, it has been observed, was the development of a so-called “consensus democracy”, i.e. a democracy in which a uniform national consensus dictated outcomes and in which the lowest common denominator prevailed.

To achieve such uniform solutions beneficial to the whole of the nation, Germany began to “flatten” its federal order, accumulating legislative power in the Bund and increasingly focusing on nationally applicable uniform rules and regulations. Against the background of a federal distribution of legislative powers between the Bund and the Länder, this could only be achieved by agreement and references of legislative power from the Länder to the Bund.

The Bund desired this development as well as its outcomes as it continuously strengthened its power base; the Länder at least accepted them, not only because it was convenient, but also because post-war Germany prospered economically.