Budapest Mayor Condemns Government Decree Halting 'Solidarity Contribution' Legal Challenges

Government Decree Sparks Outcry in Hungary

Budapest Mayor Gergely Karácsony has accused the Hungarian government of undermining the rule of law following the issuance of a decree that bars the capital from continuing its legal battle over a disputed 'solidarity contribution.' The decree, published late on Tuesday, February 4, 2026, explicitly instructs courts to terminate any ongoing litigation related to the levy and prevents future legal challenges.

The 'solidarity contribution' is a levy imposed by the central government on wealthier municipalities, intended to redistribute funds to financially weaker areas. However, Budapest, led by the opposition mayor Karácsony, has consistently argued that the tax is unjust, unlawful, and severely cripples the city's financial autonomy.

A Long-Standing Legal Battle Cut Short

The city of Budapest has been engaged in a protracted legal dispute with the government over this contribution. In January 2024, the Budapest Metropolitan Court ruled that the government had unlawfully withdrawn HUF 28.3 billion (approximately EUR 72-73 million) plus interest from the capital's accounts. This ruling was subsequently upheld by Hungary's supreme court, the Kúria.

Further, in June 2025, a Budapest court granted immediate legal protection to the municipality, halting the state treasury's attempt to withdraw over 10 billion forints in solidarity contributions, citing the potential collapse of essential public services. The Constitutional Court also supported Budapest's position on several points in October 2024, indicating that the tax level should not impair municipal tasks.

The government's new decree, issued under emergency powers granted in 2022 following the war in Ukraine, declares that the 'determination, collection, and settlement' of the solidarity contribution cannot be subject to 'administrative litigation or immediate legal protection.' It also has retroactive effect, directly impacting existing cases.

Mayor Karácsony's Strong Condemnation and EU Appeal

Mayor Karácsony described the decree as an 'unprecedented low point in Hungary's democratic backsliding' and a 'direct attack on the rule of law.' He stated that the government's action is an admission that the municipality would have won these cases and that the funds taken from the people of Budapest should be returned.

In response, Karácsony announced he has asked the European Commission to examine possible steps to safeguard legal standards in Hungary, arguing that the decree 'clearly violates the Charter of Fundamental Rights of the European Union.' He also indicated that Budapest would temporarily withhold payment of supplier invoices until mid-March, urging local companies to pay their business tax early to mitigate the financial impact.

Widespread Criticism and Judicial Resistance

The government's move has drawn significant criticism from various quarters. A spokesperson for the European Commission, Markus Lammert, confirmed they are analyzing the decree and monitoring developments.

Domestically, the decree has been met with resistance. Judges in at least two separate cases on Thursday, February 5, 2026, reportedly postponed trials instead of terminating them. Some courts are challenging the decree, with one court stating it violates principles of legal certainty, rule of law, the right to legal remedy, judicial independence, and the prohibition of retroactive effect, and plans to initiate individual norm control.

Multiple rights organizations, including the Hungarian Helsinki Committee, have condemned the decree as a 'classic case of legal abuse.' The Hungarian Bar Association stated it 'violates the independence of the judiciary... as well as the fundamental principle of the separation of powers under the rule of law.' The opposition TISZA party has accused the government of following the 'Belarusian path,' suggesting a move towards autocracy.