While every outsider in recent weeks has tended to solely focus on Germany’s next move in the euro crisis, the Merkel/Rösler government agreed last Sunday on an initiative that could transform the German university landscape. Education has always been seen as a political field allocated to the German states (Länder). With the reform of the German constitution in 2006, higher education institutions have remained strictly under the political control of the Länder. The federal government is only allowed to offer finance for temporary research projects. Temporary institutional grants are rare.

This division of power had severe effects on German universities. Even though it was in Germany where Wilhelm von Humboldt announced the unity of teaching and research in universities, excellent researchers left higher education to seek a better life in non-university research institutions or left the country for a job at a prestigious foreign university where the teaching load was more flexible and salaries negotiable. As a consequence, German universities were left in mediocrity for the second half of the 20th century.

With the so-called Excellence Initiative, Annette Schavan, the German federal minister for research and education, introduced a competition for funding institutional projects that were designed to allow some universities to rise above the rest and catch-up with their foreign competitors. However, since the federal government’s funding restrictions, it appeared that with the last round of the Excellence Initiative coming to an end, those universities that had started the catch-up process would fall back into the cushion of mediocrity.

Last Sunday, the coalition council, in which the leaders of the coalition parties meet, quietly decided to start an initiative to change the constitution once more. In the future, the federal government shall also be allowed to fund institutions within universities for an undefined period of time. Since changing the constitution requires a two-thirds majority in the Bundestag, support from the opposition will be needed in order to pass this initiative . This is a difficult step, in particular since the issue is not undisputed, neither within the CDU/CSU nor the FDP or any other party.

As minister for education and research in Baden-Württemberg, Annette Schavan herself once advocated strongly for leaving the federal government out of the universities. Some MPs from all political parties favor a strict separation of federal and state affairs in education and research.  They instead ask the federal government for a larger share of the value-added tax, which they promise to invest in universities. However, it seems that the large majority across party lines is convinced that, at least when it comes to university research, the federal government should have the possibility to invest some money in universities and not only into the non-university research institutions such as the Max-Planck Institute or HelmholtzInstitute. The example of the Karlsruhe Institute of Technology (KIT) − a joint project of the University of Karlsruhe and the Helmholtz Research Center Karlsruhe − has shown that merging a federally funded research institution and a university helps to bring researchers together and allows work across disciplinary and institutional borders. However, the KIT also shows that bringing a federal and a state institution together generates a lot of administrative transaction costs.

The political and public support for any attempt to bring the federal government into schools is quite different compared to higher education. In the latter, the argument is that research is a public good whose beneficiaries often are beyond state borders, while the former is local and attached to regional traditions and culture.

One can only hope that the new initiative by the Merkel/Rösler administration will ultimately lead to a successful reform of the German constitution. Such a move would pave the way for a few German universities to enter the top tier of universities worldwide, thus making them more attractive partners for U.S. university researchers and, thereby, strengthen German-American relations.