Constitutional reform in Germany – Modernization of the German federal system is only a first step – Why reforming German Federalism was necessary – Steps and factors in the constitutional reform process – Substance – Issues and agenda for future reform on financial relations.

In federal systems public authority is established by the people and exercised for the people at two levels. The treaties establishing the European Union may be conceptualised as the constitution of a supranational public authority, part of a federal system. And what the European Convention has submitted to the European Council to agree upon is an attempt to give this constitution a more coherent, more complete and more appealing form. The new ‘Constitution for Europe’ will be concluded, formally, by an international treaty. But governments and national parliaments will do this on behalf of the citizens of the Union, and insofar as national Constitutions provide for a referendum, the citizens will directly be involved. This Constitution will, therefore, like national constitutions, draw its legitimacy from the people, citizens of the polity, through their constitutional representatives. Legitimacy obtained is similar to that sought for a regular treaty but specific due to the contents and the explicit constitutional claim of the instrument.