Many municipalities in Germany suffer from fiscal distress. The high level of communal debt seems problematic against the background of the European sovereign debt crisis. The regulation of bankruptcy and insolvency for German municipalities could be a solution, but such regulation would have to...

In spite of the healthy finances of German municipalities, the gap between rich and poor cities and counties continues to grow. Borrowing from banks or investors will remain an important source of funding for German municipalities, but the financial and sovereign debt crisis created significant...