RICHARD DEMARCO, art dealer and promoter of the arts in Edinburgh for two and half decades, is finally selling the gallery that bears his name and opening one in Budapest.The move is characteristically bold. But then Mr. Demarco has always been a highly active European, an internationalist in the widest sense. His love of his native city, for all its difficulty in accepting and financially supporting his often-unconventional ventures, seems undiminished. What has kept him in Edinburgh, he says, is the Edinburgh Festival. He has been to 45 of them. "Prior to it, Edinburgh was thoroughly cut off," he says. Some felt Demarco should at least have been on the short list for the job of festival director when Frank Dunlop resigned this year. But Demarco wasn't approached, even though he has introduced, particularly during the festival, all sorts of drama, performance art, painting, and sculpture that nobody else gave a thought to: German artist Joseph Beuys and Polish artist-director Tadeusz Kantor, for example. With regard to Edinburgh's relationship with Glasgow, Demarco says: "The physical nature of Glasgow doesn't have the advantages of Edinburgh. Edinburgh ... has been given an appearance which is almost second to none in Europe.... That's what gives Edinburgh the edge." He also questions "the power of Glasgow to go beyond the  year of culture." But he adds that he loves Glasgow, and feels that the cities are so close that they should be thought of as a joint "experience." If they had shared an airport between them (which their intense rivalry ruled out years ago), they could have been thought of as "an alternative entry into Europe, better than the overcrowding in London," he says. Cooperation, in his view, wouldn't make them "less different." They would remain as different as "Brooklyn is from Manhattan." In both cities, though, Demarco points to a "serious collapse of structures set up by the arts council." Two contemporary arts venues are in deep financial trouble: the Fruitmarket Gallery in Edinburgh and the Third Eye Centre in Glasgow. In Edinburgh, he sees a lack of contemporary buildings for art. A modern museum, the Burrell Collection, has in the last eight years put Glasgow firmly on the tourist map, he says.