The City of Zagreb ran a budget deficit of about 400 million kuna (€54 million) in 2019, in addition to the deficit carried over from previous years of 629 million kuna (€84.6 million), the city's authorities said on Monday, noting the negative impact of recent tax reforms on the city's revenues.

The statement came after Jutarnji List newspaper had published on Monday a stetement by the head of the city’s finance bureau, Danijela Juros-Pecnik, who had warned the city government in a letter last week that the city’s budget deficit currently exceeds 1 billion kuna (€134 million).

The finance bureau later said that what surfaced in the media was an internal document, normally sent to the heads of municipal bodies in order to “achieve better budget discipline.”

The annual financial report for 2019 has not been finalised yet, and the deficit is estimated at around 400 million kuna, the latest statement said, while the deficit carried over from the previous period is 629 million kuna.

“In accordance with rules governing budget accounting, a deficit can be covered successively over a longer period of time. The deficit of 628.9 million kuna carried over from the previous period is envisaged to be covered from the projected budgets for 2021 (253 million kuna) and 2022 (375.9 million kuna),” the statement said.

The latest deficit data comes amid growing calls for Zagreb’s long-time mayor, Milan Bandic, to step down, on account of his alleged involvement in a series of corruption scandals.

Several non-governmental organisations hold regular protests against Bandic, the latest of which attracted several thousand people on Saturday. Originally a member of the Social Democrats, Bandic has been in power continuously since 2005.  

(€1 = 7.43 kuna)