The concept of a 'city-state' for the average person belongs rather to the realm of history: warring ancient Greek poleis or the trading Hanseatic cities of medieval Germany. However, on the map of modern Germany, according to the principle of the country's federal structure, there are also officially three city-states with the status of federal states: Hamburg, Bremen and Berlin. All of them are bankrupt. Hamburg owes various creditors €35 billion, each resident of Bremen is born with a debt of €20,000, but the leader in this sad race is the German capital.
The Federal Constitutional Court at the end of last week rejected Berlin's lawsuit against the federal government for financial aid in the amount of half of this debt: according to the judges, the bankruptcy of the capital does not contradict the Basic Law. In a free, democratic German state, everyone is free to go bankrupt: whether an individual citizen or an entire country. However, even if the federal treasury had taken over €30 billion of Berlin's debts, it would only have given the capital the opportunity not to pay €1.5 billion per year in interest.
There is simply nothing to repay the debt itself. Berlin mayor Klaus Wowereit rightly points out that such a huge debt is partly due to the need to maintain the status of the German capital, as well as directly to the reunification of Germany: 15 years ago, Berlin's debt was 'only' €10 billion.
It cannot be said that the German government was so happy about its victory: for modern Germany, a bankrupt city is a common thing. Moreover: at the moment, seven of the sixteen federal states are taking more loans than they are giving investments. This problem needs to be solved somehow, but experience has shown that it is pointless for the state to take on the debts of cities – it does not help. Several years ago, Bremen also went to court with a claim for financial aid and won the case, but the money paid by the state literally dissolved, trickling down in small streams into current expenses, so that the city's debt ultimately grew even more. A different path was chosen in Hamburg: the mayor there adopted a program of strict budget sanitation, and this bore fruit: the city's debt is shrinking and Hamburg expects to reduce it to zero by 2012.
One of the possible ways to solve the financial problems of German cities, including Berlin, is the upcoming federal reform: some small federal states of the country may be merged with their larger and richer neighbors. However, Berlin in this case insists on its special status as the capital of the country. After all, Berliners say, there exists and thrives at least one other similar city-state: Washington D.C. They know much less about Moscow and St. Petersburg, otherwise they would have cited them as examples too.