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The lower house of parliament approved on Friday a reform of Germany's complex federal system aimed at speeding up decision-making, giving Chancellor Angela Merkel one of her first big legislative victories.
The overhaul is one of three key pieces of legislation that conservative Merkel needs to push through in order to improve the cohesion and effectiveness of her seven-month-old grand coalition with the Social Democrats. Despite last-minute wrangling with the Social Democrats, the Bundestag approved the reform with the necessary two-thirds majority.
"With this project we are displaying our courage to make changes," Merkel said before the vote, acknowledging its importance for the coalition's credibility.
The current federal system was designed as a check on centralised power after World War Two and the reforms are the first major overhaul since the Federal Republic was created. The veto power wielded by Germany's 16 states in the Bundesrat upper house has been blamed for torpedoing reform efforts over the past decade.
In return for curbing the power that their representatives have to block legislation, the changes grant the states more independence in determining certain matters such as education, the judicial system and shop-opening hours.
The federal government will in future lead environmental and atomic energy policy. Social Democrat (SPD) parliamentary leader Peter Struck said Berlin would also monitor the states' new responsibilities. "We would be prepared to step in if necessary," he said. Culminating years of negotiations between the federal government and the states, 428 members of the lower house voted for the measure on Friday, with 162 voting against and three abstaining.
The upper house of state representatives will vote on it next Friday and is also expected to approve it. The government has vowed to start discussing a second stage of reform, involving finances, after the summer.
Until the last, the SPD had resisted measures to cede federal government control over education policy to the states, a majority of which are controlled by conservative governments. However, a compromise was found allowing the federal government to support research and other university projects. In addition to federalism, the government also wants to overhaul the creaking healthcare system and make changes to the corporate tax regime to boost competitiveness.

Copyright Reuters, 2006

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