BREAKING! Court grants urgent protection to Budapest against Orbán government
The public administration court of the Budapest Municipal Court has ruled in favour of the Budapest municipality’s request for immediate judicial protection, the press department of the Municipal Court said on Tuesday.
Urgent protection to Budapest
The ruling bans the Hungarian Treasury from collecting solidarity contributions from the municipality in May, June, July and August, the statement said.
It also instructed the respondent to pay back to the local authority some 10.2 billion forints (EUR 25.3m) with interest, calculated from May 29 when the Treasury collected it from City Hall’s account.
In its ruling, the court said that the Budapest municipality was in a special situation among local authorities as it is responsible for providing public services for millions of inhabitants. Collecting the solidarity contribution “would make [the municipality’s] liquidity situation impossible” and so would make it incapable of performing its duties, it said.
The municipality has fully proven that paying the solidarity contribution would directly cause an “irreparable burden” to its financial situation, the court said.
The Budapest municipality said in a statement that the ruling meant “Budapest could breathe again” but that a long-term solution required continued negotiations between the government and City Hall, and a decrease of the monies withdrawn from the latter.
Noting that an appeal would not lift the ban on collecting from the city, the authority said that the ruling was “the umpteenth proof that the government restrictions now threatening to cause funding issues in the city are unlawful.”
At the same time, the funding of public services in the city will cause another financial crisis in four months unless the government changes its approach, the statement said.
In a video attached to the statement, Mayor Gergely Karácsony said the ruling meant that public services and the wages of city employees were now safe.
The negotiations started last week between the government and the city, “and it got so far that we said that public services should not be put at risk.” The Budapest Assembly “will have to pull itself together and make the decisions ensuring that the city remains operational,” he said, adding that the proposals would be tabled next week.
Government comments on the case
Commenting on the ruling, Márton Nagy, the national economy minister, said on Facebook that the municipality was on the brink of bankruptcy “because of its irresponsible management of its finances, not the solidarity contribution”.
Nagy said that between 2019 and 2025, the city’s corporate tax revenues had nearly doubled, from 164 billion forints to 322 billion. Government funding for Budapest had grown to 43.5 billion forints from 26 billion; meanwhile, the solidarity contribution was raised from 10 billion to 89 billion, he said. “All in all, you have 93 billion more in your pocket now than in 2019,” Nagy said.
“You have misled the court with a flawed presentation of the significant growth in corporate taxes. The ruling says that the municipality would collect 20-30 billion in corporate taxes by mid-June. The factual data of the economy ministry says the city collected 135 billion by the end of May,” he said.
Further, the court failed to review the ways in which “paying for Rákosrendező contributed to the capital’s bankruptcy”, Nagy said, referring to the purchase of a brown-belt area which was subject to clashing development projects between the government and the city earlier this year.
The government is reviewing the ruling and will decide on further steps later, Nagy said.
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