Schwerin

Schwerin owns Germany's fairy-tale castle that actually governs: the Schloss, a golden-domed fantasy of towers and turrets on its own island between lakes, modelled on the Loire's Chambord, houses the state parliament of Mecklenburg-Vorpommern — legislature as legend, and the leading candidate whenever Germany nominates "residence ensembles" to UNESCO. The castle is merely the centrepiece of a city arranged on water: seven lakes lap at Schwerin's districts, the vast Schweriner See at their head, so that swans, sails and reflections belong to the daily commute.

The dukes of Mecklenburg, whose seat this was for centuries, endowed their small residence with metropolitan graces: the Staatliches Museum's superb collection — Flemish masters and the world's finest Duchamp holdings share the walls — the cathedral's brick-Gothic tower, oldest building of the city, and the Staatstheater, whose neo-Renaissance splendour beside the castle hosts opera, ballet and drama in ducal proportions. Each summer the Schlossfestspiele raise open-air opera on the castle square, the golden dome as scenery no designer could better.

The old town's restored gables, the Pfaffenteich pond crossed by little ferries, and the unhurried rhythm of a capital of under a hundred thousand complete the picture: Schwerin is the residence city as it survives nowhere else — small, watery, and altogether improbable, like the best fairy tales.