Berlin’s financial future was cast into doubt on Thursday after the German constitutional court unexpectedly dismissed a claim from the country’s debt-ridden capital for an emergency injection of federal money.

Germany’s largest city, which is also one of its 16 states and the seat of the federal government, now faces an unprecedented fiscal tightening as it grapples alone with a crushing €60bn ($75bn, £40.2bn) of debt, interest payments of €2.4bn a year, and tax revenues that barely cover half of its annual €20bn budget.