Follow-up: Reform of Financial Relations between Germany’s Federal Government and Länder: a Fair Compromise or Setting False Incentives?

In October 2016 the heads of Germany’s federal and Länder governments agreed to a reregulation of federal relationships as of 2020. The reform was presented and discussed by several experts in the ifo Schnelldienst 24/2016. Complementing these contributions Michael Thöne, University of Cologne, sees little substance in the reregulation, which he believes to have mainly only superficially changed fiscal equalisation in Germany.