...Stability of Solidarity System: The ratings of the German Laender reflect the stability and sustainability of the solidarity system for German Laender. Under the German constitution, member states are jointly responsible for supporting a Land in financial distress. The Laender share equal responsibilities and must be able financially to fulfil their constitutional duties while exercising their right of autonomy. The federal government (the Bund) and all other federal members have to support a Land if it experiences extreme budgetary hardship. Liquidity, Good Cash Management: Liquidity risk is mitigated through bilateral and mutual agreements linking all the federated states and the Bund, ensuring their ability to assist one another. Cash would only not be forthcoming for a Land if there was a complete federation- wide breakdown, in which neither the other Laender nor the Bund could provide cash. Active liquidity management and proper treasury facilities prevent any delays in providing support....
