ABSTRACT
In Germany, the Federal government and legislature, as well as the federal states (Länder) and thousands of local authorities collectively share legislative powers. As the EC (1990a:41) pointed out even prior to unification, this system of government has repercussions at all levels of economic policy making, not least in terms of the need for binding budgetary rules on revenue sharing, taxation and borrowing powers. Germany’s federal system of government therefore creates by its very nature a problem of power sharing between the Federal and Länder governments, a problem which has to be largely resolved by means of involving the Länder in the Federal legislature’s upper house (the Bundesrat). In addition, the Länder have the powers of implementing Federal legislation (Bulmer 1989:19).
