Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Budapest's Debt Crisis Deepens Amid New Loan Discussions

Budapest's Debt Crisis Deepens Amid New Loan Discussions

The mayor of Budapest seeks further financing from the European Investment Bank, even as the city faces substantial existing debts.
Budapest is once again at the center of financial scrutiny as Mayor Gergely Karácsony pursues additional loans from the European Investment Bank (EIB) to fund the Rákosrendező development project.

This initiative comes at a time when the city is set to begin repayment on two previous EIB loans starting May 2024, creating further financial strain on the capital.

Government spokesperson Gergely Gulyás indicated that the city's leadership had not consulted with the government regarding the new loan request.

He remarked, "We do not know what the city intends to achieve, but we hope they will fulfill their legal obligations at Rákosrendező."

In previous statements, Mayor Karácsony mentioned he was in Luxembourg negotiating for a favorable loan to facilitate the Rákosrendező project.

He stated, "I am currently in Luxembourg seeking a discounted loan to ensure the successful realization of Rákosrendező."

Imre Mártha, CEO of BKM Nonprofit Zrt., the city’s utility provider, noted banks are already showing interest in offering loans to the capital.

He explained the city may place a mortgage on properties, allowing them to repay the loan as property sales generate income.

Budapest has a history of taking on substantial debts, often leading to financial crises.

A 2011 audit report revealed that long-term development loans in Budapest exceeded 172 billion forints by the end of 2010. This debt accumulation was primarily attributed to discrepancies between budget projections and actual outcomes, which were managed through ongoing borrowing under the previous mayor, Gábor Demszky.

In 2013, Prime Minister Viktor Orbán announced that the state would assume a total of 612 billion forints in debt from 1,956 municipalities, including 200 billion forints from Budapest.

Subsequently, in 2015, the state settled the outstanding 52.29 billion forints in debt that had been accrued by the capital’s public transport system, BKV.

Despite inheriting a surplus of 214 billion forints in 2019, Mayor Karácsony has added approximately 50 billion forints in debt by 2023. Under the authority of the City Assembly, the Budapest Transport Center (BKK) entered factoring agreements worth 50 billion forints with OTP Bank and K&H Bank, illustrating the capital's ongoing reliance on financial instruments to address fiscal challenges.

The 2024 audit report highlighted that Budapest had drawn down two EIB loan facilities amounting to 65 billion forints in 2021, with repayments beginning in May 2025. As of late 2022, the city's debt to financial institutions rose from 112 billion forints at the beginning of 2020 to over 160 billion forints by year-end.

Gulyás’s government has reinforced the requirement for municipal debt management to receive prior government approval following the state’s assumption of significant debts in 2013. Fidesz officials, including Sára Botond, criticized Karácsony’s approach, suggesting it mirrors the fiscal mismanagement of previous administrations and poses risks for Budapest’s financial future.

The political landscape regarding debt management in Budapest continues to evolve as the city seeks additional funding avenues in an increasingly complex fiscal environment.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

Inquiry: Social Media Platforms Permitted Advertisements Featuring Anti-Semitic and Anti-Muslim Material in Germany
0:00
0:00
Open
Inquiry: Social Media Platforms Permitted Advertisements Featuring Anti-Semitic and Anti-Muslim Material in Germany
0:00
0:00
Close
Inquiry: Social Media Platforms Permitted Advertisements Featuring Anti-Semitic and Anti-Muslim Material in Germany
Thus, following countless Ukrainian fatalities, the devastation of the country, the collapse of the economy, and vast numbers of the population fleeing, NATO has "declared" that Ukraine's membership is no longer being contemplated.
Bosnia and Herzegovina Encounters Political Unrest Following Arrest Warrant for Serbian Leader
In Budapest, Hungary, there are no fake Islamic asylum seekers and it is a true paradise.
Putin Shows Interest in a 30-Day Ceasefire in Ukraine During Ongoing Conflict
Trump Discusses Possible Ceasefire in Ukraine as Tensions Continue
EU and Canada Unveil Retaliatory Tariffs in Response to U.S. Steel and Aluminum Duties
Romania Excludes Prominent Presidential Contender Călin Georgescu from Election Repetition
Russian Teacher Under Investigation After Explicit Content Incident in Classroom
Poland Plans Comprehensive Military Training for All Adult Males Amid Enhanced Defense Initiatives
Lithuania Withdraws from Cluster Munitions Convention Amid Security Concerns
Trump Discovers It Simpler to Negotiate with Russia Compared to Ukraine During Ongoing Conflict
Macron Cautions Against Growing Russian Aggression as U.S. Support for Ukraine Changes
EU Member States Endorse Gradual Rollout of Entry/Exit System
President Trump Indicates Willingness to Reestablish Relations with Ukraine in Light of Recent Tensions
Europe Investigates the Use of Frozen Russian Assets to Aid Ukraine
Macron Calls on Europe to Bolster Defense in Light of Russian Threats and Possible U.S. Withdrawal
Germany Supports Looser EU Fiscal Policies to Boost Defense Expenditures
Pope Francis's Health Update: Vatican Reports Stable Condition
MPs from Various Parties Express Worry About Proposed Reductions to the UK Aid Budget
U.S. Creates Strategic Cryptocurrency Reserve, Leading to Market Upsurge
Zelenskyy Convenes with UK Prime Minister Starmer in Light of Strains with the US
Here, unelected President Zelensky meets with two top American democratically elected officials who are neither stupid, nor bribed, nor blind
Pope Francis Admitted to Hospital for Pneumonia Faces Breathing Emergency
Andrew and Tristan Tate Leave Romania During Ongoing Legal Matters
Katy Perry to Participate in All-Female Space Mission with Blue Origin
US President Asserts NATO Membership for Ukraine Is Off the Table
Bosnian Serb Leader Sentenced to One Year in Jail for Defying International Envoy
Apple Resolves iPhone Dictation Bug That Linked 'Racist' to 'Trump'
Trump Confirms Zelensky’s Visit Amid U.S.-Ukraine Mineral Deal Talks
Proposal Introduced for $250 Bill Featuring Donald Trump
Trump Announces 25% Tariffs on European Imports, Citing Unfair Trade Practices
Germany's Election Outcomes: Migrants Confront Insecurity as Far-Right Support Grows
Macron Stresses Ukraine's Independence During US-Russia Peace Discussions
Putin Describes Zelensky as a 'Toxic Figure' in Ukraine's Political Landscape
The US aligns with Russia in opposing a UN resolution that condemns the invasion of Ukraine.
Unelected President Zelenskiy suggests he would resign solely in the event of the improbable: Ukraine's accession to NATO.
German Election Polls Indicate Change as Conservatives Take the Lead and Far Right Increases Support
The Enigma of QR Codes on Gravestones in Munich Unraveled
Research Explores Possible Connection Between COVID-19 Vaccines and Post-Vaccination Syndrome
German Conservatives Achieve Electoral Success in the Wake of Significant Advances by the Far-Right AfD
German Chancellor Concedes Party Loss in National Elections
Trump Commends German Election Results as a 'Wonderful Day for Germany'
German Political Figures Respond to Election Outcomes
Initial Exit Polls Show Conservatives in the Lead in German Elections
Ukrainian President Zelensky Shows Reluctance Regarding US Minerals Deal
Germany Gears Up for Crucial Election Amidst Political Uncertainty
Vatican Declares Pope Francis' Health Status as 'Critical'
U.S. and Hungarian Officials Talk About Economic Collaboration and Sanctions Strategy
Technology Giants Activate Lobbying Campaigns Against Strict EU Regulations
×