After years of debate, Germany's federal and state governments have agreed on plans to reform their individual responsibilities, thus paving the way for a more transparent and efficient means of government.
Thursday's agreement between state premiers, government ministers and the leaders of the two coalition partners is seen as something of a coup for Angela Merkel, who has given the federalism reform top priority on her grand coalition agenda.
At the heart of the reforms, the biggest constitutional change since 1949, is a redistribution of power aimed at preventing paralysis in the process of passing new legislation. As it stands, two thirds of all legislative bills have to be approved by both houses of parliament, and while that is not a problem for the grand coalition, it often led to law-making difficulties for the previous government of former Chancellor Gerhard Schröder.
The upper house of parliament, the Bundesrat, frequently adopted an obstructive role, which it had the power to do. Under the new reforms, more than 60 percent of new legislation will be eligible to be passed without endorsement from the upper house, greatly speeding up Germany's law-making procedures.
The reform will see the 16 federal states give up some of their voting rights in the Bundesrat. In return, they will be granted greater responsibility in other fields, such as environmental issues, educational policies and salaries for civil servants. But some politicians have already expressed a resistance to having big policy areas, such as education, taken out of federal hands.
The state premier for Bavaria, Edmund Stoiber, however, echoed the majority voice following Thursday's session. He said he was "very satisfied" with the outcome, which he said means Germany will be able to be quicker and more flexible in its decision-making.