Understanding Germany's federal structure is crucial to understanding contemporary Germany. The federal system shaped the way German unification was carried out, it shapes the way in which policies are made, and it plays a role in determining the way in which Germany presents its priorities in the EU. The first part of the book analyzes the nature of pre-unification West German federalism and the unique challenge posed for the federal system by unification. Part 2 takes stock of key issues in the operation of post-unification federalism, including the policy process, the role of parties in federalism, conflicts of interest over financial allocations, and the impact of deepening European integration. The final part offers a series of critical perspectives which address the long-term legacies of unification and increasing pressures for reform.