Most of the responsibility, and thus the largest financial burden, is borne by the Federation. According to the Basic Law, its sphere of competence embraces all matters that directly secure the existence of the state as a whole, namely social security, defense, foreign affairs, national security, the construction of auto-bahns and federal highways, telecommunications, major research and the promotion of science. The Federation also has competences in the areas of energy, promotion of industry, agriculture, housing and urban development, environmental protection and economic cooperation with developing countries.

There are various other tasks which the federal and the state governments plan, implement and finance jointly. These include university construction, the improvement of regional economic structures, agrarian structure and coastal preservation, as well as cooperation on educational planning and the promotion of science.

A fourth level of administration is also assuming increasing importance: the European Union.