PRAGUE — The mayors of four Central European capitals have a proposition for Brussels: Give us money to fight populism.
The leaders of Bratislava, Budapest, Prague and Warsaw have banded together as the “Pact of Free Cities” alliance — presenting themselves to the EU as alternative partners to their national governments, which have been branded populists of various stripes and run into trouble with EU institutions in recent years.
Now, as the battle over the EU’s seven-year budget heats up ahead of a special summit, the mayors are making clear they don’t just want to be seen as standard-bearers of EU values. During a visit to Brussels on Wednesday, they will lay out their pitch to receive cash from the EU to aid their cause.
The message they hope to deliver is that if Brussels agrees to channel money directly to big cities, it will be spent smartly to tackle many of the political problems fueling populist politics at home — and also means EU funding is less likely to go astray due to corruption.
Domestic opponents are portraying the move as politically motivated money grab, as the four cities join a growing chorus of asks for a share of the €1 trillion seven-year spending plan being negotiated in Brussels.
There is little Brussels can do to prevent a national government from overlooking the spending preferences of opposition mayors, and there are few opportunities for cities to directly ask the bloc for money.
The mayors want to build “resistance against populism through positive solutions,” said Prague Mayor Zdeněk Hřib, a 38-year-old member of the Pirate party. During an interview in his office at the Art Nouveau city hall, a room dominated by a map of Prague’s metropolitan area, Hřib said more direct EU funding for cities “would solve some problems” when it comes to accountability and transparency.
Discussing his plans without staffers present, Hřib referenced an EU audit into subsidies received by a company owned by Czech Prime Minister Andrej Babiš, as well as a now-closed investigation into a company formerly co-owned by a relative of Hungarian Prime Minister Viktor Orbán.
“You can see a pretty similar pattern,” he said. “It’s very obvious that there is a conflict of interest in [the] case of the Prime Minister Andrej Babiš and it’s really unbelievable how his people are trying to persuade everyone that it’s actually fine.”
Babiš, who has long maintained his innocence in the use of EU subsidies by his Agrofert conglomerate, told POLITICO in a text message that Hřib’s stance is nothing more than a political ploy.
“I see his public statements as part of a traditional ongoing political infighting,” Babiš said. “Such a stance is only natural seeing as he is the leader of the opposition in our capital.”
Cash for values
With up to €330 billion up for grabs in regional development cash known as cohesion funding in the next EU budget from 2021, the mayors have declared they would advocate for “EU urban programmes that would provide more direct funding for European cities.”
EU governments are required to involve urban and other public authorities in preparing so-called partnership agreements with the European Commission — documents that lay out how the country will invest its EU development funding.
But there is little Brussels can do to prevent a national government from overlooking the spending preferences of opposition mayors, and there are few opportunities for cities to directly ask the bloc for money.
Under the Pact of Free Cities deal signed by the four mayors in December, they vowed to work together to tackle urban challenges. “By the word ‘free,’ I mean independence from the rising tendency of populism,” said Matúš Vallo, the mayor of the Slovak capital Bratislava who won election as an independent promising to modernize the city and improve the quality of life for people living there.
Writing in an email that he regards the four capitals as “islands of democracy,” Vallo said, “All four capital cities maintain the highest concentration of diversity — social, religious, political and ethnic. Living in cities like this requires tolerance and openness. That is why we felt the urge to give a name to this status and claim responsibility for common values and principles.”
The initiative of the mayors, whose national governments work together through the Visegrad Group, has won acclaim from activists who want to see more accountability in the use of EU funds in the region.
But it has met with a frosty reception from Orbán’s government in Hungary.
Hungarian Prime Minister Viktor Orbán | Sean Gallup/Getty Images
Asked about the initiative, the Hungarian government’s international communications office said that “in the last couple of days it has become clear that there is no agreement [among EU governments] regarding even the basic priorities” of the next long-term EU budget.
Budget elitism
For Hřib, opening independent financial channels to address cities’ challenges — he listed climate change, housing, the aging population, inequality and social stratification — is the recipe to battle the populist politics engulfing the region.
“The point is that if we will not be able to solve these challenges cities are facing nowadays, there is a risk — or maybe it’s quite certain — that some populist will come sooner or later and offer a solution which will be very simple and of course wrong to these problems,” he said.
It’s a potential vote-winner, according to transparency campaigners. “I believe people care about misuse of funds,” said David Ondráčka, director of the Czech chapter of Transparency International. More direct funding for cities could help “diffuse the power game,” he said, adding that a tailor-made budget line for capital cities could bring “more public oversight” and would be “more controllable.”
“As a mayor of a city, I basically don’t have to care if I got Google headquarters here or not, because I get the money based on the headcount.” — Zdeněk Hřib
But it could also backfire politically if governments successfully paint a picture of liberal urban mayors channeling the country’s valuable EU funds to relatively wealthy areas.
With the cities set to lay out their plans during a press conference at the European Parliament on Wednesday, their economic status may well prove an obstacle to their request. Under current rules, the distribution of EU monies among regions is based on Gross Domestic Product per capita, and Central Europe’s capitals are significantly wealthier than other areas.
In Prague, GDP per inhabitant in 2017 was 189 percent of the EU average, while Budapest has reached 141 percent of the bloc’s average.
But Gergely Karácsony, the Hungarian capital’s mayor, said EU officials should take a broader view.
“Budapest is indeed the most developed city in Hungary, but EU-conducted research shows that economic progress in the country is directly linked to investments in the capital city,” he said in an email.f
Noting the city faces “serious problems,” including homelessness and a lack of social services for the elderly, Karácsony said, “If the economy and infrastructure of Budapest are not developed, the rest of the country will suffer the consequences too.”
Prague Mayor Hřib argued that the city does not fully benefit from the wealth it generates: Taxes are collected by the national government and redistributed in part to local authorities based on the number of registered inhabitants. “As a mayor of a city, I basically don’t have to care if I got Google headquarters here or not, because I get the money based on the headcount,” Hřib said.
This article is part of POLITICO’s coverage of the EU budget, tracking the development of the seven-year Multiannual Financial Framework. For a complimentary trial, email [email protected] mentioning Budget.