Budapest mayor tells EP Budgetary Control Committee about government measures detrimental to capital

The European Parliament's Budgetary Control Committee is in Budapest for a three-day visit. Members of the delegation also met the Mayor of Budapest, Gergely Karácsony. The committee asked about the recovery plan submitted by the government and I also made some suggestions, Gergely Karácsony said at a press conference after the meeting.

The mayor said it was clear from the delegation's questions and the discussion that the MEPs who came to Hungary "know the situation in Hungary very well".

“We all agreed that it is unfortunate that Hungary currently doesn't have access to EU funds.”

- he said. The mayor told the delegation that Budapest's economic potential meant that it could develop on its own, without other sources, but the money generated ends up in the central budget, which is why Budapest is dependent on EU funds. He also stressed that in the current seven-year EU cycle, Budapest can expect HUF 200 billion from the EU, compared to the previous HUF 340 billion.

Karácsony also spoke to the delegation about the government's "discriminatory treatment" of the capital.

We have previously written about the financial struggles of Hungary's capital here. As an example, the mayor cited the government's decision made in 2015 to separate the development of the Central-Hungarian region and the capital, thus reducing the availability of EU funds.

He added that municipalities lead by the opposition have "significantly less" access to EU funds. He said this was evident in Budapest and several opposition-led rural cities, and suggested that the committee look at ways to override these government intentions.
Karácsony asked the committee to try to find a way to reach an agreement between the government and the European Commission.

He also asked committee members to include direct funding for cities among the solutions in their report.

Delegation members also asked for the detailed view of the mayor and his team on the recovery plan presented by the government. At the meeting, Gergely Karácsony pointed out that the decisions contained in the EU recovery plan had not been submitted to any form of public consultation by the Hungarian government, which "did not even cover the most basic aspects of partnership".

"The capital only found out from the press what the government wanted to spend the money on," the mayor said. He also drew attention to the centralisation of the spending of EU money, which Karácsony said carried risks.

The mayor cited an amendment currently on the table of the National Assembly, which would require the state to manage all EU investment projects.

He said that Budapest had already seen similar centralisation fail: 10 billion forints had been lost due to missed deadlines because the organisation working on behalf of the state was "slow".

The delegation asked what the municipality of Budapest is doing to ensure transparency: as an example, Karácsony cited a cooperation with Transparency International on the renovation of the Chain Bridge, in which they followed the public procurement process.

The mayor is confident that the delegation and the current discussions will help the country access EU funds as soon as possible. "Of course, not at the cost of the EU turning a blind eye to the rule of law problems in Hungary," he added.

They are coordinating with others as well

The delegation includes two EPP members, Germany's Monika Hohlmeier and Finland's Petri Sarvamaa, as well as a Socialist MEP, Lara Wolters of the Netherlands. Also on the committee is one of the Hungarian government's most vocal critics, Green Party MEP Daniel Freund, who got into a Twitter exchange with Fidesz MEP Tamás Deutsch right before the visit. Two Hungarian MEPs, Katalin Cseh of Momentum and Sándor Rónai of DK, also joined the delegation as observers. The EU Court of Auditors and the European Commission are also represented in the group.

The MEPs, who arrived in Hungary on Monday, are also examining the processes and controls in place for the operation of the Recovery and Resilience Fund in Hungary. The conditionality mechanism was launched last December by the Council of the European Union against the Hungarian government – the first and so far only such procedure to be launched against a member state. Twenty-five out of 27 member states voted in favour of the Commission's proposal, which said the state of the rule of law in Hungary posed a threat to the EU budget. The European Commission will not pay the government any money from the over-budget recovery fund until 27 "super-milestones" are met.

During their time in Hungary, members of the delegation are meeting, among others, members of the government and representatives of several organisations that have a role in protecting the EU budget: the State Audit Office, the National Tax and Customs Administration and the newly established Integrity Authority. We wrote about the visit and its significance in this article.

Not everyone is happy about the arrival of the EP delegation: On Monday, Fidelitas (Fidesz' youth wing) activists greeted the European Parliament's delegation investigating the use of EU funds with a bag full of bundles of euros. Their suitcase was a reference to former EP vice-president Eva Kaili, who resigned over a corruption scandal, after authorities found hundreds of thousands of euros of bribes hidden by her and her husband in bags and a suitcase.