After last year’s HUF 5.4bn debt consolidation at Tatabánya, the county seat is to be relieved of its remaining debts of some HUF 2.9bn by the end of February 2014, Minister of National Development Zsuzsa Németh announced in Tatabánya on 12 December, 2013.

While local authorities had hardly any debts in 2002, their debt stocks quadrupled to over HUF 1200bn between 2005 and 2010, Zsuzsa Németh explained. At the same time, they were forced to take over an increasing range of tasks and their administrational workload grew concurrently, the minister explained.

In the first phase of the debt consolidation comprising several steps, the state took over from county authorities the task of the operation of public institutions as well as the debts of almost HUF 200bn accumulated by county authorities as of January 2012. In the second phase also implemented last year, the Government settled the debts of all settlements with a population of under 5000, in a total value of HUF 74bn at the national level. In the third phase this year, the state has taken over 40-70 percent of the debts of 227 settlements with a population of over 5000, relieving them of debts of HUF 610bn altogether.

By the end of February, the debts of Tatabánya of some HUF 2.9bn are to be settled, too, the minister announced. In the first months of 2014, the state is to settle the remaining debts of all settlements in Hungary, of a total amount of HUF 420bn. The Government does not only help local authorities by taking over their debts but also by taking back several tasks that are traditionally state responsibility, Zsuzsa Németh emphasised.

It is an expectation of settlements at the same time that they become more active in joining efforts for the stimulation of the local economy and draw up a future vision. The minister asked the bailed out local authorities to work out economic development and growth plans and specify what measures, instruments and funds were necessary for the settlement concerned to attain the best possible economic performance. The Government considers developing local economies as the engine of economic development at the national level and plans to spend 60 percent of the funds on this purpose in the next financing period of the EU.

(Ministry of National Development, Communications Department)