GERMANY: Germany's impoverished capital faces untold years of belt-tightening after the country's highest court ruled that the city-state government alone is responsible for Berlin's €61.4 billion debt.
Berlin mayor Klaus Wowereit had hoped the constitutional court would order the federal government of Chancellor Angela Merkel to assume at least part of the debt that costs the city €2.4 billion in interest payments annually.
But the court threw out the city's case that Berlin faced a "budget emergency", tossing the mayor's favourite phrase back in his face.
"Berlin adorns itself with the slogan 'poor but sexy', but perhaps it is so sexy because it isn't so poor after all," said presiding judge Winfried Hassemer. "Berlin doesn't have a budget emergency. Significant indicators point only to a budget that is under stress but which Berlin can, in all probability, overcome on its own."
The court said that despite strict austerity measures in recent years, Berlin was still spending far more money than a city of similar size such as Hamburg and there was considerable room for further spending cuts.
Following the verdict, a tense Mr Wowereit announced that a "taboo-breaking" round of cuts was now unavoidable in the capital.
"The good news is that the court sees Berlin in a much better financial position than we do ourselves," he remarked wryly. He made an open request to the federal government to help the city cover the cost of its cultural budget, which will probably face the most drastic cutbacks.
"It makes no sense to reduce culture in Berlin to the level of a small town," said Mr Wowereit.
By late afternoon, speculation was rife in the capital that the mayor will ask the federal government to take over the financing of at least one of the city's three opera houses.
The court case was based on German constitutional provisions that oblige the state and federal governments to bail out states experiencing a "budgetary emergency".
The German capital's debt has ballooned since the fall of the Berlin Wall when the city was €10 billion in the red. Berlin politicians say federal funding that kept West Berlin alive for nearly three decades was reduced too quickly, from €7 billion to zero between 1990 and 1994.