The extension of the deadline by three months came after the government agreed to provide guarantees for the Ft 63 billion debt provided that the city guaranteed the repayment of the debt.

The agreement with the banks means the BKV will have to pay only the interest in the coming months, Nepszabadsag writes.

Tarlos earlier told Napi Gazdasag that the BKV was seeking a three-year extension of loans due to mature this year.

City council also announced that Tarlos has reached agreement on the long-term financing of the BKV in talks with Prime Minister’s Office state secretary Mihaly Varga and public finances state secretary Gyorgy Naszvadi. No details were released.

According to earlier reports, the government's condition for unfreezing the Ft 32 billion subsidy granted for this year and expanding it by an additional Ft 21 billion was that city council came up Ft 20 billion of financing.

City council has frozen 10% of funding for its institutions to meet this goal, taking Budapest to the limit of its financing capacity, Nepszabadsag writes."

Source: Hungary Around the Clock

This news item is one of many published daily by HATC, a premier subscription news service which distributes English-language info about Hungary via email or fax. For a free trial of HATC follow this link and click on 'Free Trial Subscription'.