Hungarian local governments in big trouble, Budapest may also have a freeze break

Municipalities are unable to cope with soaring energy prices, and without state support, a “freeze break” may come. At the end of the year, the municipality of the capital will certainly have unpaid bills. According to Mayor Gergely Karácsony, other municipalities will face a similar situation.

Jánoshida is in big trouble

Béla Eszes, the mayor of Jánoshida (Jász-Nagykun-Szolnok county), said the following at a discussion of the Association of Hungarian Municipalities on Friday:

“There are not enough trees in Hungary to allow all municipalities and families that have been using gas heating to switch to wood. But even if there were, gas-fired systems have been installed in recent years in modernisation projects funded by tenders. But they cannot afford the market price of gas and electricity,” Népszava.hu writes.

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No electricity contract

Two years ago, the village of 2,500 inhabitants replaced its old wood-burning boiler with a modern gas heating system in the kindergarten and the day-care centre for the elderly. Now, however, it turns out that they cannot pay the gas bill, the article says. The 100-person kindergarten cannot be vacated, but the elderly are being moved to the village hall.

But they cannot sign the electricity contract either, because the price of HUF 65 (EUR 0.16) per kilowatt hour has now jumped to HUF 380 (EUR 0.95), so the cost of street lighting, so far at HUF 3.5 million (EUR 8,720), would be HUF 20 million (EUR 49,800) for a year, while their income from business tax is no more than HUF 40 million (EUR 100,000).

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People resort to social assistance

But there is also a big problem with public catering: the state subsidy for this had to be supplemented by HUF 10 million (EUR 24,920) a year, now, that sum has to be increased to HUF 20 million (EUR 49,800), even though prices have already been raised four times. The burden on families can no longer be borne, and they can no longer afford inflation and rising heating costs. People who have never applied for social assistance before are now applying for it.

Until now, an average of 200 families out of the 1,000 households in Jánoshida have registered for the 200 cubic metres of social firewood, and this year, that number has grown to 400.

Coercive measures – there is no Plan B

“Municipalities are trying to get ahead by various coercive measures, such as closing swimming pools, reducing decorative lighting, and dropping non-mandatory services,” said György Gémesi, Mayor of Gödöllő, President of the Association of Hungarian Municipalities at the meeting. “Municipalities are unable to afford the escalating energy prices, and if there is no public aid, there will be a freeze break. There is no Plan B,” said Gémesi.

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