It is not surprising that subsidiarity is very often discussed with autonomy and federation (equally multidimensional concepts, similarly discussed in science). It is clearly evident taking into account, for example, results of analysis of the key words (tags) in scientific publications. The European Union has significantly contributed in popularizing of the concept so it is no surprise that strongly linked with EU's problems has become a central point of the discussion of its organizational structure and internal relationships between forming elements. It is difficult to imagine analysis of the conditions for implementing of subsidiarity in Germany without prior presentation of the state political system's solutions. Studying the structure and functioning of public administration enables to identify the place and role of the local government, to measure degree of independence of the local authority as a central point of discussion in relation to the subsidiarity.

The Influence of the Constitutional Principle of Subsidiarity on the Shape and Functioning of Local Government

In the contemporary literature on the subject, there is no doubt that local government performs tasks of a public nature. It is also acceptable for the local government to use legal instruments typical of the state authority. However, the issue of the principle of division of powers between the state and local government is disputed. If the existence of a local government equipped with its own, independently performed scope of tasks and responsibilities has been recognized as a legal principle of constitutional rank, then the division of tasks cannot be made in an optimal way only between separate state authorities (this is the so-called horizontal separation of powers). This division should be “vertical”, i.e. by allowing other non-state entities, mainly local governments, to perform state functions. Both the doctrine and the European community use the principle of subsidiarity when resolving the problem of separation of powers.

Constitutional Basis for Conducting Business by Local Government Units

The subject of the study concerns the constitutional and statutory basis for the economic activity of local government units. According to the Constitution, they are not entitled to the attribute of economic freedom, and therefore they should focus their economic activity on satisfying, in accordance with the laws, the needs of a given community of residents, avoiding economic risk and going beyond their own tasks. The insufficient level of local government’s own revenues was criticized, especially after 2015, which is inconsistent with the constitutional assumptions and causes financial crises, drastically limits expenses in many local governments, making it difficult to adequately meet the needs of residents.