The decision required support from 21 deputies, but only 18 gave a yes-vote at Thursday's session of the city council. Members of the Socialist party's group rejected the proposal because they think the city's Fidesz-led management already increased the municipality's obligations by HUF 6 billion over the past six months, and, since mayor Zsolt Páva said their measures have resulted in major savings, the Socialists do not think it is necessary to raise the overdraft limit.

The agreement to raise the overdraft limit was signed by Zsolt Páva and OTP deputy CEO László Wolf on Monday, Econews reported.

Raising the limit was necessary to ensure the operation of the local council and strengthen its economic position, they said at the signing. Property owned by the local council was put up as collateral.

Mayor Zsolt Páva said on Monday the city would avail of the new overdraft limit only if liquidity dried up. The agreement was designed to ensure that financing and organizing programs for 2010, when the city takes the European Capital of Culture title will not be a problem, he said.

The local council takes in about HUF 40 billion a year, not including support for European Capital of Culture projects, and it has about the same amount of debt, Páva said. It has become more difficult to get credit in recent years, he added. (MTI-ECONEWS)