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Could a progressive Emperor (not sure who any suggestions for this?) Create a reformed Empire using the model of the American Federal system?

Basically my idea is each ethno linguistic region of the Empire gets it's own state and elected parliament these states would have rights similar to US states in setting policy including the allowance of an official"state language" and would be fairly democratic. All signage must be in the state and national language, so in Slovakia for example everything would need to be in Slovak and German. Education would be kept a responsibility of the National government with all students being required to achieve fluency in German to graduate, but most classes would be in the local language, additionally local language universities would be set up in all state capitals. The National government would have a national parliament but be less democratic with the Emperor basically taking the role of the US president and being able to veto legislation as well as issue decrees which carry the force of law. The bureaucracy would be run in German and during training soldiers and officer cadets would be paired with partners from other regions forcing them to use German to communicate. The universal public education would be instituted and federally controlled and standardized and emphasize national unity and local traditions, as well as students learning German to a fluent level. (for an example of what I mean see the Soviet education model in the republics.) The Federal constitution would strictly prohibit separatism and separatist parties would be banned.

So some questions, first would such a system actually work? Would it allow the countries to express their nationality while being contained? Switzerland has had great success with that kind of thing, and the Soviet Union for most of it's existence did a good job balancing local traditions while keeping the country unified. But it could just lead to the local parliaments being hyper nationalistic and the whole system collapsing shortly thereafter. So I am curious to hear your thoughts about this.

Also would making German the official language lead to ill feelings? Would it be politically possible to use a neutral language like Esperanto or Latin? I'm not sure if that would be possible logistically or politically?

Finally what would the POD be? Were there any people in line for the throne who would have been interested in something like this? And are there any events which could ahve pushed the Empire toward these kinds of reforms?
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