Detroit, Michigan files for bankruptcy, largest in US history | Americas| North and South American news impacting on Europe | DW | 18.07.2013
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Detroit, Michigan files for bankruptcy, largest in US history

Detroit has become the largest city in US history to file for bankruptcy protection. Once a booming automotive hub, the city is now plagued by massive debt, a dwindling population and high crime rates.

Detroit's emergency manager Kevyn Orr, who was appointed by the state of Michigan, asked a federal judge permission to place the city into bankruptcy on Thursday, making Detroit the largest city in US history to file for bankruptcy.

In a letter accompanying the filing, Michigan's Governor Rick Snyder said he had approved the request to file for bankruptcy protection saying: "It is clear that the financial emergency in Detroit cannot be successfully addressed outside of such a filing, and it is the only reasonable alternative that is available."

Snyder appointed Orr in March to tackle the city's spiraling long-term debt, which is estimated at $18.5 billion (13.7 billion euros). Last month, the city stopped making payments on some of its debt and obligations.

Detroit was once the cradle of the US automotive industry, which earned it the name of the Motor City. Detroit gave birth to General Motors, Ford and Chrysler but when much of the auto industry left, so did Detroit's residents. Once the fourth largest city in the US, the city's population has shrunk by more than half, from 1.8 million in 1950 to 685,000 today. As a result, 78,000 buildings stand abandoned across the city.

The city also suffers from high crime, with its homicide rate the highest in nearly 40 years. For more than two decades, Detroit has been on the list of the most dangerous cities in the US.

hc/rc (Reuters, AFP)

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