Hungary’s capital Budapest adopted a “survival package” of cuts to avoid bankruptcy as the opposition-led city’s mayor blamed Prime Minister Viktor Orban’s government for squeezing revenue for political gain.
(Bloomberg) — Hungary’s capital Budapest adopted a “survival package” of cuts to avoid bankruptcy as the opposition-led city’s mayor blamed Prime Minister Viktor Orban’s government for squeezing revenue for political gain.
In the latest clash between Orban’s nationalist government and cities led by Hungary’s fractured opposition, Budapest Mayor Gergely Karacsony said his office would stop paying taxes to the country’s Finance Ministry in an effort to keep providing services including public transport and paychecks for the city’s 27,000 employees.
The decision followed Orban’s policies including restricting Budapest’s borrowing ability and ratcheting up its contribution to the national budget to 58 billion forint ($168 million) this year. He also deprived municipalities of crucial income from sources such as levies on local businesses.
“We have successfully overcome crises that were not caused by internal politics,” the mayor of the metropolis of 1.8 million said, citing hardships caused by the pandemic and the energy price crunch. “The Hungarian government has visibly dedicated itself to a hostile-Budapest policy.”
Orban’s ruling Fidesz party made major gains in last year’s parliamentary elections, which his critics say was helped by bleeding opposition-led cities of revenue. The premier has since directed state support — often financed by European Union developmental aid funds — into centers his party controls while not doing the same for Budapest and a few other large cities.
Karacsony said Orban’s government had missed deadlines to deliver funds to Budapest. The city will apply for a bank loan to maintain liquidity, although such a move would require approval by Orban’s cabinet.
The mayor said he expects municipal budget deficit to rise to 76.1 billion forints in August from 32.1 billion that was projected in June.
Fidesz pushed back, saying “wasteful, bad urban management” was behind Budapest’s financial hardships. In a statement on the ruling party’s Facebook page, it cited a failed advertising tender and public procurements for lost income, as well as rising costs at some investments due to execution delays.
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