The German version of federalism, often called “cooperative federalism”, has been identified by many as one of the root causes of Germany’s becoming Europe’s new sick man. Now, a number of changes in the institutions defi ning the relationship between the federal, the state and the local level have been passed. This contribution describes the most important changes and evaluates them from the point of view of fi scal federalism. It concludes that the changes are only a fi rst step in the right direction, but a number of important steps have yet to follow.
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