Stage 2 of the federalism reform

Committee on the Modernisation of Federation-Länder Financial Relations

The reform of the federal system is still ongoing. On 15 December 2006, the Bundestag and Bundesrat decided to establish a joint Commission on the Modernisation of Federation-Länder Financial Relations. Parliament adopted a motion tabled by the CDU/CSU, SPD and FDP ( 16/3885). The Left Party voted against the motion, whilst Alliance 90/The Greens abstained. The motions for amendment tabled by the Left Party ( 16/3888) and by Alliance 90/The Greens ( 16/3887) were rejected by a large majority in the Bundestag ( 16/74, pp 7393A-7411A). The Bundesrat voted unanimously in favour of an identical resolution (Bundesrat Printed Paper 913/06).

The members of the Commission

The Presidents of the Bundestag and Bundesrat established the Commission on 8 March 2007. SPD parliamentary-group chairman Peter Struck from the Bundestag and Baden-Württemberg Minister-President Günther Oettinger (CDU) from the Bundesrat were elected as chairpersons. The Bundestag and Bundesrat both delegate 16 members and 16 substitute members to the Commission. The resolution establishing the commission states that several of the members delegated by the Bundestag must be Federal ministers. Almost all of the Länder have sent their minister-presidents to the Commission. All Commission meetings are to be attended by four Members of the Land parliaments, who have the right to speak and table motions but no voting rights. In addition, the local authorities are to be involved "in a suitable fashion" (Composition of the Commission).

The Commission's mandate

The Commission's mandate is to draft proposals on the modernisation of Federation-Länder financial relations, in order to ensure that these financial ties are adapted in the light of the changed context of growth and employment policy within Germany and abroad. The intention is for the proposals to strengthen the responsibilities of the regional and local authorities and ensure that they have the financial resources necessary for them to carry out their duties. The resolution establishing the Commission has an annex with an open list of topics. This list includes the topics of prevention and management of budgetary crises, critical review of tasks and standard-setting. It also encompasses the reduction of red tape and enhancement of efficiency, through, amongst other things, redistribution of tasks in the public sector. Also on the list are ensuring adequate financing for tasks and strengthening the autonomy of regional local authorities, reinforcing  cooperation and easing the requirements for voluntary mergers between Länder, as well as grouping together services in specific policy areas and impacts on Federation-Länder financial relations.