The companies involved are public utility company Budapest Kozmuvek, transport company BKK and road and street lighting company Budapest Disz- es Kozvilagitasi, Karacsony said.

Karacsony noted that the municipality on Tuesday submitted a request for immediate judicial protection over a dispute concerning the solidarity contribution City Hall is required to pay into the central budget.

Immediate judicial protection should protect city funds until the court has made its decision, so the Treasury's step "is unlawful as well as immoral because it is putting the capital's operations at risk," Karacsony said.

The municipality's "most important aim in the coming months and weeks" will be to pay the net wages of 27,000 employees of city institutions, he said.

Botond Sara, the central government's Budapest official, said the capital's budget was "illegal and unsustainable" the moment the left-wing majority of the city assembly approved it.

In a post on social media, he also said the Budapest administration's decision to take responsibility for the Rakosrezdo area of the city was "so big" that it could "imperil the city's financial situation and operations".

Further, he said the state treasury's debt collection order had been legal as the courts had not ruled otherwise. He said Karacsony had turned to court but doing so in itself did not have the effect of suspending the payment into the treasury.

"Anyone can have an opinion on the legality of something but the court decides in the end; it has indeed ruled several times but not in favour of the metropolitan council. The Kuria's latest ruling is also clear: the capital's budget is illegal," he added.

He said "excessive government deductions" were behind the budget crisis. At the same time, the Kuria, Hungary's supreme court, has ruled that the main figures of the budget must be revised and the mayor failed to nominate a deputy, "which is why the City Hall is operating unlawfully".

After scandals around public transport company BKV, the company's chief executive resigned, he noted, "and today the chief executive of [Budapest transport authority] BKK has also quit", he added.

Vitezy noted the lack of boards of directors and supervisory boards in disarray, adding that the city assembly had rejected company reports submitted by various companies operating under the metropolitan council.

"A complete crisis at an operational and financial level has taken hold in the capital and a crisis of trust between the mayor and the city assembly," he added.

Marton Nagy, the national economy minister, responding to the mayor’s statement, said no one was above the law and everyone must pay the solidarity tax, adding that the state treasury had rightfully collected the tax.

In a post on social media, Nagy said the legal protection could not prevent the collection, which was "a method of tax collection" rather than an administrative procedure. The solidarity tax, he added, was budget revenue and the treasury was obliged to take all possible measures to collect it.

Szentkiralyi: "Tisza-Karacsony bankruptcy coalition" manage to make Hungary's richest city insolvent

The "Tisza-Karacsony bankruptcy coalition" needed less than a year to bring Hungary's richest city to insolvency, Alexandra Szentkiralyi, the Fidesz-Christian Democrat group leader in the city assembly said in a video post on Facebook on Thursday, referring to the opposition Tisza Party and the city's mayor, Gergely Karacsony.

She said there were more and more bankruptcy briefings and the heads of Budapest's key companies were quitting. "But all the mayor can do, instead of taking responsibility and seeking a solution, is point fingers," she said.

Szentkiralyi said Karacsony, Tisza and David Vitezy, leader of the Podmaninszky Movement, "voted for an illegal 50 billion forint [EUR 123.8m] hole" in the city's budget. And referring to the Rakosredezo area of the city which requires a clean-up before investments there can go ahead, she said they "splashed 50 billion on landfill" at the site.

She said Budapest had reserves of 214 billion forints when Karacsony was handed over the keys to City Hall, while "its industrial revenues doubled", "yet they have bankrupted the capital".

Budapest residents, she added, wanted answers and for stable operations resume.

MTI Stock Photo - for illustrative purposes only

Source: MTI – Hungary’s national news agency since 1881. While MTI articles are usually factual, some may contain political bias, and readers should be aware that such content does not reflect the position of XpatLoop, which is neutral and independent.

Since the goal of XpatLoop is to keep readers well briefed, right across the spectrum of opinions, MTI items are shared to ensure readers are aware of all the key narratives within the media landscape.

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