The Confederacy of Free Worlds is a very poorly and divided state that was founded in Sommerwelt by unwanted colonists and, later on, prisoners. The Confederacy is widely the laughing stock of all the Coalition’s allies and mocked by comedians as neither being a confederacy or free.
The origin of the Confederacy is equally humiliating, as Sommerwelt was a dumping ground for unwanted colonists and, later on, prisoners. Naturally, this diverse environment bred conflict, which began even before the Endless War. The Confederacy was founded as a provisional government by a loose confederacy to somewhat prevent the conflicts between the many states in Sommerwelt. Naturally, this organization failed time and again to prevent war. During the Endless War, Sommerwelt was so war-torn that many groups didn't even bother with it. This was certainly true of the National Conservatives, who explicitly ordered their troops to avoid Sommerwelt at all costs. After the Endless War, this policy of staying away from the system continued and Sommerwelt was not integrated into the Coalition. The Coalition only opened up diplomatic relations with the Confederacy when a central “Anglo-Saxon nationalist” government was established and managed to somewhat stabilize the situation. This stabilization was aided by Coalition corporations, which helped create a monarchy by kidnapping and assassinating political opponents. The monarchy was kept intentionally weak and incompetent, with brave and strong-minded heirs disappearing without a trace.
Desperate for jobs and recognition, the Confederacy’s government signed an agreement with the Coalition declaring that Coalition corporations would not be taxed within the Confederacy if those corporations would promise to employ a hundred thousand Confederate residents. Many corporations agreed, but through a loophole they themselves designed the Coalition government and corporations gave many of their existing employees “residency.” This, combined with the inability of local business to compete with Coalition businesses, plunged the Confederacy into extreme poverty which it has yet to recover from.