On October 19, 2006, the Federal Constitutional Court did not recognize an extreme budget emergency of the state of Berlin. The consequences of the ruling extend far beyond Berlin, as perverse incentives for excessive debt in the federal system of the Federal Republic of Germany continue to exist.

Furthermore, the ruling raises many specific questions. What does it mean for the financial situations of Berlin, the federal government, and the other states? What consequences arise from it for the Federalism Commission II and for the future design of German federalism? How can German territorial authorities be released from liability entanglements?

What can be learned from other countries in dealing with extreme budget emergencies or even insolvencies of territorial authorities? What conclusions will the capital markets draw from the ruling? How will the credit risks of the federal government and the states be assessed in the future? How will their creditworthiness be determined?

This complex of questions is addressed by renowned federalism experts from the fields of financial science, law, and financial market analysis, who have been following Berlin's specific issues for years, as well as outstanding politicians from the federal and state levels.