Budapest implements hiring freeze and spending limits amid 65 billion forint deficit

Budapest Mayor Gergely Karácsony has implemented a hiring freeze and strict spending controls due to a severe financial crisis. The city’s bank account currently shows a deficit of 65 billion forints, with additional significant debts due to BKK and BKV by the end of the month.

Effective September 1, all new financial commitments require prior approval from the Mayor. This measure, which also applies to municipal factions and committees, aims to ensure that monthly payroll costs—exceeding 3 billion forints—can be met while the city negotiates its financial situation with the national government. Exceptions are made only for projects funded by grants where advances have already been received.

The city attributes its distress to government policies, specifically the increase in the solidarity contribution. While the government maintains that Budapest’s revenues have grown since 2019, the municipality faces a deadline of October 15 to address an 86 billion forint solidarity payment.

Separately, the city administration has criticized MOHU’s proposal to phase out cash payments for bottle deposits. Officials argue that replacing cash with vouchers will not solve underlying social issues and may instead create a secondary market for vouchers, rather than addressing the waste management problems seen in various Budapest districts.