No governmental support, Budapest strives to survive

The Budapest municipal assembly voted to amend the city council’s 2023 budget on Wednesday.

The proposal submitted by Mayor Gergely Karácsony was passed with 18 votes in favour and 12 against.

The amendment is aimed at “updating” the budget regulation to ensure that funds that have been allocated are available and amended revenues can cover expenditures.

The draft amendment notes that the risk posed by the uneven flow of budget revenues was known when the budget was passed given the city council’s “minimal reserves” and “limited room for manoeuvre” when it comes to its borrowing limit.

It became clear that if the planned funds do not arrive “due to actions beyond the city council’s control”, there is a significant risk of liquidity problems, the proposal said.

It said that though the capital’s “survival programme” had been successful, it did not mean that the current fiscal year would be closed according to the originally approved budget decree.

Receipt of some HUF 55 billion (EUR 140.9 million) in support promised by the government is “still in question”, the proposal said.

After reviewing the city budget’s projected revenues and expenditures based on the first half of the year, the city administration cut HUF 13.8 billion (EUR 35 million) of expenditures, part of which will be deferred until next year.

If government support for Budapest is not approved, the city in the fourth quarter will have to make use of financial instruments that enable the restructuring of the needed funds within the framework of the economic stability law, they said.

In the debate on the amendment proposal, Karácsony said the city council would expand its room for manoeuvre “using every possible political, legal and financial tool”, because they did not want Budapest “to go bankrupt over the government’s austerity measures”.

Zsolt Wintermantel, group leader of ruling Fidesz, said it was “cynical” on city council’s part to call “pushing Budapest into debt” a survival programme.

Read also:

• Budapest citizens, attention: free access to Hungary’s most expensive spas!
• Warning: Major changes in Budapest transport