Symposium: The Resilience of Austrian Federalism and How the Constitutional Court Supports It

Francesco Palermo

University of Verona & Eurac Research Bolzano/Bozen

Austrian federalism: weak or unique? 

In the course of its century-long life, the Austrian constitution has undergone several transformations, in form and substance. The federal system, however, has been far less dynamic than other areas. The numerous constitutional amendments in this field, and the even more frequent provisions with constitutional rank adopted over time, have constantly adjusted and adapted to specific rules, but have never transformed the overall structural design of the federal system. In this area, the pendulum of constitutional change has been oscillating much less than in other fields. Because the trend has been slowly but predominantly centralizing throughout the past century, most scholars consider that Austria has a weak federal system. However, the evolution over the last century shows that it is rather resilient, tailored to the country’s history and culture, and adaptive, which makes it much stronger than the limited powers of the Länder may suggest. 

Background: evolution and role of the Constitutional Court 

Federalism in Austria is older than the federal constitution. Its roots can be traced back to the late Middle Ages when different territories gradually came under the same roof through family and patrimonial unions rather than by war. The growth of imperial power progressively reduced the autonomy of the Länder by centralizing the administration. In the last century of the Habsburg Empire, peripheral nationalism was mounting but also frustrated in its calls for a multinational federation. In the second half of the 19th century, constitutional changes alternated federalizing and centralizing moments, and in the end the multinational empire dissolved. When the Republic was proclaimed in 1918 in the remaining German-speaking territories, the Länder were formally asked to join. However, they had never left, and the accession (not even voted on by all Länder) did not have legal significance. The ‘minimalist’ federal design in the 1920 constitution was thus what a weak, small and unstable country could afford, and what was feasible, given that, in most of the territories, the unitarist culture had been dominant since imperial times. 

The 1920 Bundes-Verfassungsgesetz (B-VG) was, therefore, the first federal constitution in the world that was not clearly born out of a compact among sovereign entities but rather out of the dissolution of an existing state. The constitutional compromise consisted on the one hand in the guarantee of the existence of the Länder (as autonomous, not sovereign entities, art. 2.2) and of their residual powers (art. 15). On the other hand, the role of the Federation was overwhelming, and the Bundesrat, the Upper Chamber of the federal parliament, which should represent subnational interests, was given a minimal role, much weaker than any of the then existing federal Upper Chambers. The federal system only came into effect in 1925, when the division of powers entered into force introducing the so-called indirect federal administration (art. 102 ff.). The Länder were thus tasked both with the implementation of federal laws and acting as federal authorities. 

Since WWII, for over 50 years, the federal government has been in the hands of the two main parties, the Social-Democrats (SPÖ) and the Christian-Democrats (ÖVP), mostly in coalition with each other. They often had a sufficient majority to amend the constitution, introducing numerous changes over the years, particularly to the division of powers. No single one of these changes was extraordinary or groundbreaking, but the overall trend was a creep towards centralization. Furthermore, the few claims that there were for subnational autonomy were channelled politically rather than institutionally, as the same parties governed the Länder. Despite the overall centralizing trend, there were some decentralizing moments. For instance, in the 1970s, it became possible for the Federation and the Länder to conclude agreements regarding their respective areas of competence (art. 15a B-VG). Similarly, in the 1980s, several Länder adopted new constitutions and their treaty-making power was introduced (art. 16 B-VG), alongside the concept of Land citizenship (art. 6.2 B-VG). In the 1990s, Austria’s accession to the EU and developments in the financial sector led to the introduction of further changes. Again, these were merely small adjustments to a changing reality – a balancing and re-balancing of the system to keep its stability – but by no means structural transformations of the federal system. 

The Constitutional Court discretely aided this trend. In its case-law, it generally supported the centralizing trajectory of Austrian federalism. At the same time, the Court made clear that federalism is an essential constitutional principle, thus helping preserve its key elements, such as the constitutional autonomy of the Länder, the Bundesrat, the division of powers and the indirect administration. However, it also placed clear boundaries on Länder proactivity, going as far as striking down provisions in regional constitutions, such as somedirect democracy elements in the Vorarlberg Constitution. It also developed the principle of ‘mutual consideration’ as well as interpretative criteria for the division of powers. The Court had a stabilizing effect on the federal principle and limited the oscillations of the pendulum. 

New developments: unchanged approach 

With the new millennium, the political system entered a new phase. Several factors strained the consociational culture, including growing difficulties faced by main parties, the rise of other political forces and the rupture of the ‘grand coalition’. In 2000, the Austrian People’s Party (ÖVP) and the right-wing liberal-national party (FPÖ) formed a new federal government. Also, the political landscape underwent deep transformations in some Länder. While the SPÖ and ÖVP again established grand coalition governments during the period 2007 to 2017, the irreversible crisis of the traditional political model became even more acute in recent years, making constitutional amendments politically more difficult. 

These developments made the flaws of the Austrian federal system more evident, as politicians and legislatures could no longer easily adjust to challenges through political agreements or small constitutional adaptations. The first of these flaws is a structural deficiency within the federal system. There is a complex, even cumbersome, distribution of powers between the Federation and the Länder (art. 10-15 B-VG), with an overwhelming predominance of the Federation. The stumbling blocks created by this problematic division of powers can in part be circumvented with private law instruments (art. 17 B-VG). Thus far, the cooperative attitude in Austrian federalism has helped the different levels of government overcome some of these issues. A related problem is the minimal powers Länder have in key areas such as the judiciary (they have just administrative courts), law enforcement and the economy.  

A further structural problem is the weak, almost irrelevant role of the Bundesrat. In the upper Chamber representation is political more than territorial (art. 35 B-VG), and its primary function is participation in the legislative process. However, its participatory role is subordinate, as a simple majority in the lower Chamber can override its veto (art. 42.4 B-VG). In the very few cases in which its veto is absolute, it has used it sparingly. The Länder are thus largely dependent on the Federation, even financially, and have limited opportunities to influence legislative decisions. 

Some attempts have been made over the years to propose systemic constitutional changes in the federal system (especially in the first half of the 2000s, when a constitutional convention was set up). So far, however, only minor amendments have been introduced over the whole century of the federal constitution. This has in part been due to the balancing (or perhaps ‘resilience-friendly’) role of the Constitutional Court, which has accompanied the overall centralization while constantly preserving federalism from excessive centripetal trends. 

Outlook: a resilient federalism 

Despite a profoundly different political climate, it is improbable that significant changes will take place in the federal system in the coming years. More likely, the system will continue along the consolidated path of small rudder tuning to stay the course. After all, it has been a successful model, tailored to Austrian peculiarities, comparatively weak in terms of Länder powers and representation in the federal decision-making, but fit to guarantee efficient governance,  political stability,  social cohesion  and  economic development. 

The fundamental balance between (dominant) centripetal forces and the autonomy of the Länder was established in the 1920 federal Constitution and has effectively navigated the rough sea for one century. Its design is all but spectacular, its daily operation is humble, but it is stable. It looks soft, but it has a strong core that has resiliently remained unchanged for over one century: it has been rocked but never sunk. If it works, why fix it? 

Francesco Palermo is Professor of Comparative Constitutional Law in the University of Verona School of Law and Head of the Institute for Comparative Federalism of Eurac Research in Bolzano/Bozen, Italy. Together with Joseph Marko, he coordinates the IACL Research Group on “Constitutionalism and Societal Pluralism: Diversity Governance Compared”.  

Suggested citation: Francesco Palermo, ‘The Resilience of Austrian Federalism and How the Constitutional Court Supports It ’ IACL-AIDC Blog (8 October 2020) https://blog-iacl-aidc.org/100th-anniversary-of-the-austrian-constitutional-court/2020/10/8/quts03apxmajno427qwudax8eq4fmz