Mayor Karácsony: Stop bleeding Budapest dry — City finances under strain, scrutiny

Reacting to comments about Budapest’s perilous situation made at a government press conference on Wednesday, the mayor of Budapest said the metropolitan council was ready to face fresh scrutiny of its operations and finances.

“They can check things as many times as they want, just stop bleeding Budapest dry,” Gergely Karácsony said in a post on Facebook. Noting that head of the Prime Minister’s office Gergely Gulyás said the central government wanted to scrutinise the capital’s finances, he said the state’s top auditor, the State Audit Office, had done so regularly, “and for some reason this isn’t enough for them”.

The Constitutional Court cited a recent audit office report stating that the financial position of Budapest had been poor due to external negative factors such as the pandemic, an economic downturn, energy crisis and inflation, as well as government measures such as a higher solidarity tax and a reduction of the local business tax rate for micro, small and medium-sized enterprises from 2 percent to 1 percent, he added.

The auditor also examined the financial management of the metropolitan council and stated eight days ago that absent of further measures the municipality would no longer be able to provide public services.

Budapest, the mayor added, had not made any substantial reductions in public services in recent years even though the city’s income had contracted by 25 percent in real terms compared with 2019, which he called “unprecedented in the public finance system” since the change in Hungary political system. He said “government withdrawals” made it “impossible to survive”.