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Row over Budapest budget

June 13th, 2020

A pro-government commentator dismisses as groundless an allegation advanced by Budapest Mayor Gergely Karácsony, that the government intends to punish Budapest by cutting its budget. A liberal pundit wonders if Budapest could become insolvent.

In a Facebook post commenting on the government’s 2021 draft budget, Budapest Mayor Karácsony accused the government of punishing Budapest by raising the capital’s annual ‘solidarity tax’, paid to the central budget, from 10 to 22 billion Forints. The government said that higher solidarity taxes levied on cities are necessitated by the coronavirus emergency to help poorer municipalities. According to the government’s calculation, local business tax revenue in the capital will increase by 25 billion Forints, and therefore its net budget receipts will not shrink.

Magyar Nemzet’s Dávid Megyeri accuses Budapest Mayor Karácsony of trying to blackmail the government. The pro-government commentator believes that Karácsony is threatening to postpone the long overdue reconstruction of the Chain Bridge, an iconic landmark, in an attempt to prove that the government is bent on ruining Budapest. Megyeri, however, is convinced that the Mayor’s strategy will backfire, and Budapest voters who do not want to live in a run-down city will turn against him.

In Heti Világgazdaság, Judit Windisch suggests that the capital’s financial difficulties are mostly the result of the coronavirus economic slowdown. The liberal commentator acknowledges that the government does indeed intend to take funds away from Budapest, but lower tax revenues resulting from the lockdown and lower growth will have a more important impact on Budapest’s budget, she believes. Quoting experts, Windisch does not rule out the possibility that Budapest will go bankrupt.



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