Coronavirus – Budapest mayor announces cost-cutting measures

Budapest Mayor Gergely Karácsony on Friday announced a series of measures aimed at reducing the municipal council’s expenditures.

The measures include the merger of five city council-run companies and reducing the number of city council committees, Karacsony said on Facebook. Also, following the resignation of Dávid Dorosz, the deputy mayor for climate protection and development, the capital will from here on have only four deputy mayors, he said.

Municipal parks manager Fokert, the Budapest Funeral Institute, metropolitan chimney sweeping company FOKETUSZ, Budapest’s public works company FKF, district heating company Fotav and the Budapest City Administration Holding Company (BVH) will be merged into a single public works company, the mayor said. The company’s CEO will be Imre Martha effective January 1, 2021, he added.

Karácsony also said that

Katalin Walter will be appointed CEO of Budapest transport authority BKK effective Jan. 1.

Karácsony said Budapest and Hungary were dealing with both an epidemic and an economic slowdown that has resulted from it. “And unfortunately we’re also dealing with the increased burdens the government is putting on Budapest,” he said.

“We responsible city leaders have a duty to defend our city against this crisis,” the mayor said. Karácsony speculated that Hungary’s ruling Fidesz had a clear vision for what it wanted to happen in Budapest. “This script is simple,” he said.

“First, they’ll deprive the city of money and then force the leadership to announce austerity measures which they can then criticise.”

Karácsony said

the Budapest leadership would not “dance to Fidesz’s tune”.

“We’ll defend our city without passing austerity measures because austerity just leads to more austerity which deepens the crisis,” Karacsony said.

The mayor said the city leadership had decided to save money by cutting its own expenditures. “We’re not going to impose austerity measures but instead actually save money,” he said. “We’re not going to cut costs on the backs of the city’s workers but instead eliminate executive positions, oversight committees and disbursement offices.”

He said

Budapest would “break political taboos that no one has dared break for 30 years”.

The first step in cutting the municipal council’s expenditures will be the elimination of the 200 million forint (EUR 555,000) mayoral budget. Half of that budget was saved this year but will be eliminated completely next year, Karacsony said.

Costs pertaining to the city’s leadership will be cut by one-third, he said. The budgets of the city assembly groups will also be cut and the number of municipal council committees will be reduced from eight to five, he added.

As regards the decision to merge the five city-owned companies, Karácsony said the move, which was based on the “well-functioning” Stadtwerke model in place in Vienna and in big cities in Germany, had originally been planned for 2023.

The restructuring will affect management but not professional staff, he added.

Ruling Fidesz’s Budapest group in response said that “it would be high time” for Karácsony “to stop blaming and attacking the government all the time”.

They welcomed reducing the number of deputy mayors and merging the five city-council run companies and their boards. The Fidesz group however said it wanted to see concrete calculations on how much money the municipal council hoped to save annually on the structural changes. The group said it also wanted to know why the Budapest Thermal Baths company had not been integrated along with the other five into the new public works company.

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