Are you sure?

Budapest financial official warns that drastic measures needed to avoid bankruptcy

The Budapest mayor's chief financial advisor János Atkári says that the city needs to take forceful and immediate measures to raise revenue and cut expenditures in order to avoid becoming insolvent by the end of 2012, or in 2013, Atkári told the business newspaper Világgazdaság in an interview published on Wednesday.

Atkári said that Budapest needs a greater array of taxes at its disposal such as a real-estate appreciation tax and possibly congestion charging of vehicles in order to generate sufficient revenue, noting that cities in Hungary currently have the right to impose only the local business tax. Mayor István Tarlós's chief financial advisor noted that parliament must invest cities with the authority to levy taxes.

Atkári asserted that the Budapest will require government funding in order to avert bankruptcy, particularly for the city's public-transport company BKV. Tarlós said on January 13 that the Budapest municipal council would like the government to assume control of a 50%c stake in BKV, providing the company with HUF 19 billion in order to ensure its further operations.

Atkári said that Budapest will need to halt some city investments, notably those involving transportation projects, starting after the expiration of current contracts next year. Atkári noted that the city currently has no money available to continue construction of the Budapest Metro's fourth line after the year 2013.

Atkáari remarked that the city aims to save HUF 80 billion through implementation of cost-saving measures over the next four years. (MTI-Econews)