Karacsony: Budapest must be ‘saved’ from impact of removed cap on energy costs

In response to remarks by Marton Nagy, minister of economic development, made in an interview broadcast earlier in the day, Karacsony said the government’s recent measures “are what they look like: brutal austerity”.

“The Orbán government has removed the cap on utility [costs for local councils] in its current form … without any prior consultation or the familiarisation of an impact study,” Karacsony said.

Contrary to the government’s claim, small companies and municipalities will not manage the impact of being removed from the programme, the mayor said. “Businesses hit by the pandemic, the economic crisis, the war and a labour shortage will only be able to handle this by raising prices, which will further enflame inflation; so the announced measures will affect everyone,” he said.

Karacsony noted that the Budapest council had asked the government to increase rather than reduce areas that benefit from central caps on utility costs. One such sector, he said, was public transport, which is contending with ballooning costs due to higher fuel, electricity, and gas prices. Extra related costs could total 20 billion forints (EUR 51m) in 2022, he added.

The mayor said he will visit Brussels from June 13 to meet European Commission officials in the hope of securing EU funds “for a sustainable energy policy in Hungary and in Budapest”. He also pledged to consult business leaders, experts, and civil groups before drafting a strategy for making the capital energy efficient and sustainable.

He said he hoped city leaders would have an opportunity to “make up for deferred talks with the government … because Budapest must not lose out when the government scraps the cap on energy costs.”