Morning after initially grates in German city (8)
I believe the answer is:
hangover
'morning after' is the definition.
(I've seen this before)
'initially grates in german city' is the wordplay.
'initially' suggests taking the first letters.
'in' means one lot of letters goes inside another.
'german city' becomes 'hanover' (city in Germany).
The initial letter of 'grates' is 'g'.
'g' put within 'hanover' is 'HANGOVER'.
(Other definitions for hangover that I've seen before include "Morning-after problem" , "effect of too much booze" , "result of overdoing it" , "After-affect of drinking bout" , "What one may have the morning after" .)