In an extraordinary session held at the Kelenföld bus depot on Monday, the Budapest City Assembly passed a resolution calling for direct negotiations with the government.

The motion, which passed 12-0 (with Fidesz members abstaining and Tisza Party delegates boycotting the vote), explicitly demands that the government abide by the Fundamental Law of Hungary and secure the capital’s operations without forcing the city to concede to its terms.

The Insolvency Demand and Counter-Claim

The escalating crisis follows an earlier statement from Gergely Gulyás, head of the Prime Minister’s Office, who suggested the government would only step in to assist Budapest if the assembly formally declared insolvency.

The Assembly rejected this outright, with a majority supporting an amendment from the Podmaniczky Movement that specifically rules out the nationalisation of city-owned companies.

The Mayor stated the government’s demand amounted to an "unacceptable ultimatum," arguing that government fund withdrawals — in the form of "solidarity contributions" — have already been ruled unconstitutional by court decisions, and that the State Audit Office has confirmed the city cannot maintain mandatory services if forced to comply.

"We won't kneel and beg for money that's rightfully ours by law," Karácsony declared, warning that without a deal, the wages of 27,000 public service workers could be jeopardised in January.

The Core of the Financial Dispute

The disagreement centers on who is responsible for the capital’s financial woes:

The Government’s View (Fidesz/PMO): Fidesz City Assembly group leader Alexandra Szentkirályi and Csaba Latorcai (Parliamentary State Secretary for Public Administration) have accused the current city leadership of "political theatre" and mismanagement.

They point to a 214 billion forint reserve allegedly inherited from the previous administration in 2019, which they claim has been replaced by 170 billion in debt through "wasteful spending," including high-profile projects and bonuses.

Latorcai went further, calling on Karácsony to resign, stating the crisis is due to "incompetence, not lack of funds." Gulyás emphasised that the city thrives only when its leadership is "on the same page" with the government, criticising the Mayor for pursuing "ideological arguments" instead of focusing on problem-solving.

The City’s View (Karácsony/City Administration): City administration director Ambrus Kiss countered that the current administration has not incurred any debt, claiming the government blocked their ability to borrow funds. He warned that without an agreement, the capital faces a 33 billion forint deficit in 2026 and will be forced to breach fiscal laws. Karácsony vowed to "hold them to their word" after ministers pledged to prevent the capital's collapse, while rejecting the demand for insolvency.

Political Fallout

The political tension has also highlighted divisions among opposition parties. Representatives like Tibor Déri (Democratic Coalition, DK) criticised the Tisza Party for boycotting the crucial vote, labelling their absence as "cowardly" given the high stakes for the city’s 1.7 million residents.

Meanwhile, Gergely Gulyás assured the public that the government "will not let go of Budapest’s hand" and will guarantee the city remains operational in the coming months, but he reiterated that cooperation would benefit the city with major national investments.

As the financial deadline for public service salaries approaches, the expat community will be watching closely to see if the two sides can set aside political arguments to secure the capital's mandated services.

 

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 narratives within the local media.

XpatLoop believes in empowering readers to form their own views through complete and comprehensive coverage. To facilitate this XpatLoop has a balanced range of news partners, as you can see when you surf around XpatLoop.com

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