Budapest public transportation to be halted for ten minutes on Friday as city fights to avoid bankruptcy

This Friday, for ten minutes, between 11:50 AM and noon, Budapest’s public transportation system will come to a halt. This will affect all vehicles belonging to BKV, the city’s public transportation company – mayor Gergely Karácsony announced earlier this week. He added that this was “not a strike, but a decision made by the company’s owner, the city”.

Commuters need not worry though, as there will be no delays, nor vehicles stopped in the middle of the road or in tunnels, Attila Gulyás, president of the City's Public Transportation Workers' Union (VTDSZSZ) has promised. He stressed that BKK will adjust the schedule so that all vehicles can arrive at a station by 11:50 a.m. on Friday, where they will wait for ten minutes before resuming operations.

The City Council made the decision to pause the operations of BKV as a last resort and a sort of warning in the long-running financial dispute between the leadership of the Hungarian capital and the government.

In this latest chapter of the conflict, the Hungarian State Treasury deducted HUF 10.2 billion (25,2 million euros) from the account of the Budapest Municipal Government last week, collecting part of what the government claims is the city’s debt towards paying a ‘solidarity contribution’ which the capital disputes and has therefore not paid yet.

The Solidarity Contribution Tax was introduced in Hungary in 2012, with the purpose of ensuring that wealthier municipalities with higher revenues contribute to supporting poorer municipalities facing more difficult financial situations. The amount of the contribution is based on the tax revenues and other income of local governments. The higher their revenues, the higher the amount they have to pay into the central budget.

However, ever since Karácsony, an opposition politician has been mayor of the city, the Hungarian government has introduced several measures which have significantly reduced the capital’s income. Additionally, some laws were modified at record speed, to redirect various taxes or funds that were previously paid to the city – into the state budget. At the same time, the amount of the solidarity contribution the city is supposed to pay has been gradually increased.

The capital’s mayor has previously pointed out that in recent years, the state's financing of local governments has been reduced on average by 20 percent, while in the case of Budapest, by 30 percent.

Commenting on the Treasury’s move, Karácsony said that it plunged Budapest into a financial crisis and has called into question the provision of basic services, including the operation of the city’s public transportation company – which is why they resorted to the upcoming brief break in its operations.

“We picked this time because it will cause less of a problem for the city than another time would. We want to show what it's like when the city isn't functioning, but we don't want to disrupt public services,” said the mayor.

."I believe we have nowhere left to retreat, we cannot and do not want to pay more tribute money, which is illegal and is destroying the city anyway, so we are taking up the gauntlet. The first step is to shut down the city for ten minutes, the next step could be a two-hour warning strike, and after that, anything could happen," Karácsony said. According to the mayor, if BKV were to shut down for a week, the economic consequences would be so severe that the government would have to revise its GDP forecasts. “If this city comes to a standstill, the Hungarian economy will come to a standstill, and that will be very painful for the Hungarian government,” he said, noting that if Budapest becomes insolvent, Hungary would immediately be severely downgraded by the major credit rating agencies.

This year, the government is set to withdraw HUF 360 billion from local governments in the form of solidarity contributions. The mayor of Budapest is not the only one who has spoken out against the contribution. He has been joined by Tamás Wittinghoff, the mayor of Budaörs, and even András Cser-Palkovics, the Fidesz-member mayor of Székesfehérvár has said that if they didn't have to pay the solidarity contribution, the city would be able to spend more on sports and culture.

While the mayor is putting the blame on the government, they see things differently, as the comment of Gergely Gulyás, Minister of the Prime Minister’s Office, made on Wednesday attests. He said that “the government has discussed the situation in Budapest, and would like to see the performance of the capital's municipal leadership match the city's greatness.” In his opinion, “this is currently not the case, and it is due to poor management that the capital has ended up in the current situation.” According to the minister, the responsibility lies solely with the capital's leaders, but the consequences will be born by everyone. We are ready to help – Gulyás offered. But he added that in order to do so, the city's operations must be reviewed first.