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Country Profile : Hungary

Country profile: Hungary

Map of Hungary

Hungary traces its history back to the Magyars, an alliance of semi-nomadic tribes from southern Russia and the Black Sea coast that arrived in the region in the ninth century. After centuries as a powerful medieval kingdom, Hungary was part of the Ottoman and then Habsburg empires from the 16th century onwards, emerging as an independent country again after World War I.

The Hungarian language belongs to the Finno-Ugric family and is one of the handful of languages spoken within the European Union that are not of Indo-European origin.

A landlocked country, Hungary is home to Lake Balaton, the largest in central Europe, and to a large number of spa towns and hot springs.

It has especially rich traditions in folk and classical music and was the birthplace of numerous outstanding performers and composers, including Franz Liszt, Bela Bartok and Zoltan Kodaly.

Vinyard in Hungary's Tokaj area Hungary's most prized wine comes from the Tokaj region

Hungary became co-equal partner with Austria in a dual monarchy in the mid-19th century after an unsuccessful revolt against the Habsburgs in 1848. After a period of turmoil following World War I, an independent kingdom of Hungary was established under the authoritarian regency of Admiral Miklos Horthy.

The redrawing of European borders that took place after World War I left about five million ethnic Hungarians living in neighbouring countries. Their status remains a sensitive issue and has complicated Hungary's relations with its neighbours.

Following World War II, in which Admiral Horthy had allied himself with Germany, Hungary fell under communist rule. An uprising in 1956 was crushed by Red Army forces, but Hungary did later become the first Eastern European country to gain some economic freedom.

Hungary played an important part in accelerating the collapse of communism across Eastern Europe when it opened its border with Austria in 1989, allowing thousands of East Germans to escape to the West. Just a few months later the Berlin Wall was history.

Hungary's post-communist economic transition was achieved relatively smoothly. Within four years of the collapse of communism nearly half of the country's economic enterprises had been transferred to the private sector, and by 1998 Hungary was attracting nearly half of all foreign direct investment in Central Europe.

Ten years later, the picture looked rather less rosy. A high level of both private and state borrowing left the country particularly vulnerable to the credit crunch of 2008, and in October of that year the government was forced to appeal to the International Monetary Fund and the European Central Bank for massive loans in a bid to stave off economic collapse.

Dissatisfaction with the centre-left coalition government's handling of the economy from 2002 to 2010 coincided with the rise of the right-wing nationalist party Jobbik, known for its anti-Semitic and anti-Gypsy rhetoric, and a move to the authoritarian right by the Fidesz party, which won the 2010 election.

Hungary's parliament is in the capital Budapest on the banks of the Danube River

 

Hungary's parliament

 

 

 

 

 

 

 

 

 

 

Hot baths in Budapest Bathers enjoy thermal pools in one of Europe's biggest spa complexes, in Budapest
  • Full name: Hungary
  • Population: 10 million (UN, 2011)
  • Capital: Budapest
  • Area: 93,030 sq km (35,919 sq miles)
  • Major language: Hungarian
  • Major religion: Christianity
  • Life expectancy: 71 years (men), 78 years (women) (UN)
  • Monetary unit: Forint
  • Main exports: Machinery and transport equipment, foodstuffs, chemicals
  • GNI per capita: US $12,850 (World Bank, 2010)
  • Internet domain: .hu
  • International dialling code: +36

 

 

 

President: Pal Schmitt (resigned April 2012)

Hungarian President Schmitt President Schmitt had a successful sporting career

Pal Schmitt became president of Hungary in August 2010, a few months after the centre-right party Fidesz - of which he was the vice-president - won a resounding victory in parliamentary elections.

After enjoying a successful fencing career - he won gold medals at the 1968 and 1972 Summer Olympics - he was a member of the International Olympic Committee and served as Hungary's under-secretary of sports.

Mr Schmitt was Hungary's ambassador to Spain and Switzerland between 1993 and 2002, and became the deputy president of Fidesz in 2003.

After being chosen as president of the country by the Hungarian parliament, he declared that he wanted to be "a man of the people" and that he intended to work closely with the government.

Unlike his predecessor, Laszlo Solyom, who did not hesitate to criticise the government of the day and was known to refuse to sign bills into law, Mr Schmitt raised no objections to any government policies.

President Schmitt resigned in April 2012 after an Hungarian magazine revealed that his 1992 doctoral thesis was largely plagiarism.

Prime minister: Viktor Orban

Hungarian premier Viktor Orban Prime Minister Viktor Orban

Mr Orban, whose right-wing Fidesz party won a two-thirds majority in parliament in April 2010, had previously served as prime minister from 1998 to 2002.

Fidesz's landslide election victory allowed it to become the first party to govern alone since the fall of Communism.

On coming to power, Mr Orban promised firm but moderate government, and drew a clear line between Fidesz and the far-right, euro-sceptic Jobbik party, which entered parliament for the first time.

Public debt

Fidesz pledged to cut taxes, curb tax evasion, create jobs and reduce state bureaucracy. Mr Orban made an immediate start by pruning the number of ministries to eight - leaving him with the smallest cabinet in the post-communist era.

His biggest challenge was posed by Hungary's severe public debt problem, and he chose to tackle this with an unorthodox economic policy. In December 2010, the government introduced a law forcibly transferring most of the assets of private pension funds to the state to cut the high budget deficit.

In March 2011, it announced a series of fiscal reforms with the same aim, including cutting the eligibility period for unemployment benefiots, tightening disability pension rules and abolishing earlier retirement.

Mr Orban also ruled out renewing the IMF-led loan that rescued Hungary from financial collapse in 2008, to avoid giving the organisation too much say over Hungarian economic policy, potentially making it harder to meet the country's debt obligations.

Interior view of Hungary's parliament Hungary's parliament

Hungary reopened talks with the IMF in November 2011 with the aim of securing a credit lifeline in case of a deepening crisis in the eurozone, on which the country depends. However, the IMF cut short these talks after only a few weeks, citing concerns over the independence of Hungary's central bank.

Hungary agreed to make some changes to the central bank law in April 2012, and the European Commission said that this would allow negotiations over a 15 to 20bn-euro ($20-26bn) bailout package with the IMF to resume.

On the political front, media laws introduced in January 2011 were widely criticised at home and abroad for undermining media freedoms. The government responded by making some changes which the EU declared to have assuaged its concerns.

Mr Orban's government then went on to make other legislative changes - including the introduction of a new constitution and controversial new election law - that critics alleged undermined democracy by tilting the system in favour of Fidesz.

 

 

 

Newsstand in Hungary Some of Hungary's newspapers are foreign-owned

Hungary's private broadcasters compete with public radio and TV. The public broadcaster has faced financial struggles, dwindling audiences and allegations of political influence.

Some European governments and media organisations criticised a controversial new media law introduced on 1 January 2011 as tightening government control over the media.

The row over the law clouded the start of Hungary's six-month EU presidency, but the government subsequently introduced changes to the law, which the European Commission said met its concerns about the registration of media, rules on the provision of balanced information, and restrictions on foreign media.

National and local newspapers are privately-owned, some of them by foreign groups and investors.

There were 6.2 million internet users by June 2010 (Internetworldstats).

The press

Television

Radio

News agencies/internet

 

 

A chronology of key events:

9th century - Magyars under Prince Arpad settle Danube plain

 

Bela Bartok

Statue of Bela Bartok

Bartok was a major classical composer and collector of folk music

1000 - Stephen I, a descendant of Arpad, recognized by Pope as first Christian king of Hungary, expands Hungarian control over Carpathian basin.

1241-1242 - Mongol invasion devastates large parts of Hungary.

1342-1382 - Reign of Louis the Great, who annexes Dalmatia and founds Hungary's first university at Pecs.

1456 - Forces led by Hungarian nobleman Janos Hunyadi defeat Ottoman army at Siege of Belgrade.

Ottoman invasion

1526 - Ottoman Turks defeat forces of Hungarian king at Battle of Mohacs, establishing control over most of the country.

1699 - Austrian Habsburgs under Leopold I expel Turks.

1848-49 - Uprising against Habsburg rule under Lajos Kossuth suppressed by military force.

Paprika market Hungarians trade paprika - a key ingredient of the local diet - in this picture taken in around 1915

1867 - Hungary becomes equal partner in Austro-Hungarian Empire

1918 - Austro-Hungarian Empire is broken up at the end of World War I. Hungarian republic is proclaimed following a revolution.

1919 - Communists take over power under Bela Kun. Kun wages war on Czechoslovakia and Romania. Romanian forces occupy Budapest and hand power to Admiral Miklos Horthy.

1920 - Hungary loses large part of territory to Czechoslovakia, Romania, Russia and Yugoslavia. The National Assembly restores Kingdom of Hungary; Horthy becomes regent until 1944.

1938 - Hungary regains some of the territory lost to Czechoslovakia with the help of Nazi Germany.

World War II

1939 - Hungary joins Anti-Comintern Pact of Germany, Japan and Italy. At the outbreak of World War II Hungary remains neutral.

1941 - Germany invades the Soviet Union. Hungary allies itself with Germany, and loses a large part of its army on the Eastern Front.

1944 - Hungarian Nazis seize power after Horthy asks advancing Soviet troops for an armistice. Hungarian Jews and gypsies are deported to death camps.

1945 - Soviet forces drive the Germans out of Hungary by early April. New coalition government introduces land reform bill, redistributing land from large estate owners to peasants.

1947-48 - Communists consolidate power under Soviet occupation.

1949 - A new constitution makes Hungary a Communist state. Industry is nationalised, agriculture collectivised and a wave of terror launched.

1956 uprising
Stalin statue being toppled A statue of the Soviet leader Stalin is toppled during the 1956 national uprising

1956 - Uprising against Soviet domination suppressed by the Soviet Army. Janos Kadar becomes head of government.

1960s - Kadar gradually introduces limited liberalising reforms. Political prisoners and church leaders are freed, farmers and industrial workers given increased rights.

1968 - New Economic Mechanism brings elements of the market to Hungarian socialism.

Spearheading change

1988 - Kadar is replaced by Karoly Grosz. Opposition groups form the Hungarian Democratic Forum.

1989 - May - Border with Austria is opened, and thousands of East Germans escape to the West. Communist state in Hungary is dismantled and a transition to a multi-party democracy starts.

1990 - Stock exchange opens in Budapest. A centre-right coalition wins elections.

1990 June - Hungary withdraws from any participation in Warsaw Pact military exercises.

1991 - Soviet forces withdraw from Hungary. The Warsaw Pact is dissolved.

A new era

1994 - Former Communists and liberals form coalition following elections. Gyula Horn, the leader of the reform Communists, pledges to continue free-market policies.

1997 - Referendum endorses joining Nato. The European Union decides to open membership talks with Hungary, which begin in 1998.

1998 - Centre-right coalition under Fidesz leader Viktor Orban elected.

1999 - Hungary joins Nato.

2001 June - Parliament backs controversial Status Law entitling Hungarians living in Romania, Slovakia, Ukraine, Serbia, Croatia and Slovenia to a special identity document allowing them to work, study and claim health care in Hungary temporarily.

2002 May - Peter Medgyessy forms new centre-left coalition government in which the Socialist Party partners the liberal Free Democrats.

2002 June-July - PM Medgyessy admits to having worked as a counterintelligence officer for the secret service in the late 1970s and early 1980s. However, he denies ever having collaborated with the KGB and says he worked to steer Hungary toward IMF membership without Moscow's knowledge.

2002 December - EU summit in Copenhagen formally invites Hungary to join in 2004.

2003 April - Referendum overwhelmingly approves Hungary's membership of an enlarged EU. However, turnout is only 46%.

2003 June - Parliament amends controversial Status Law on work, health and travel benefits for ethnic Hungarians in neighbouring countries which criticised it as interfering with their sovereignty and discriminating against other ethnic groups.

Hungary in the EU

2004 May - Hungary is one of 10 new states to join the EU.

2004 September - Former sports minister Ferenc Gyurcsany becomes prime minister following resignation of Peter Medgyessy in row with coalition partner over reshuffle.

2004 December - Low turnout invalidates referendum on whether or not to offer citizenship to some five million ethnic Hungarians living outside Hungary.

2005 June - Parliament chooses opposition-backed Laszlo Solyom as president after Socialists' candidate is blocked by their Free Democrat coalition partners.

2006 April - General election returns Socialist-led coalition under Ferenc Gyurcsany to power.

2006 September-October - Violence erupts as thousands rally in Budapest demanding the resignation of Prime Minister Gyurcsany, after he admitted his government had lied during the election campaign.

2007 February - A commission of enquiry into the previous autumn's disturbances, in which 800 people were hurt, finds fault with the police, the government and the country's whole political elite.

Economic woes

2008 March - Government defeated in opposition-sponsored referendum calling for abolition of new fees for health care and higher education. The move is seen as a setback for government plans for economic reforms.

2008 April - Mr Gyurcsany reshuffles his cabinet after the Alliance of Free Democrats quits the two-party coalition.

2008 October - Hungary is badly hit by the global financial crisis and the value of the forint plummets.

The International Monetary Fund (IMF), the EU and the World Bank grant the country a rescue package worth $25bn (15.6bn).

2009 March - Hungary and Russia sign deal to build part of the South Stream pipeline across Hungarian territory. Budapest also agrees to jointly build underground gas storage facility in Hungary, a move which will turn the country into a major hub for Russian gas supplies.

2009 April - Economy Minister Gordon Bajnai takes over as PM; he announces a programme of public spending cuts, tax rises and public wage freezes.

2009 June - Far-right Jobbik party wins three seats in European Parliament elections, gaining almost 15% of the vote.

Centre-right landslide

2010 April - Conservative opposition party Fidesz wins landslide victory in parliamentary election, gaining two-thirds majority. Jobbik enters Hungarian parliament for first time, winning 47 seats.

2010 May - Parliament passes law allowing ethnic Hungarians living abroad to apply for Hungarian citizenship. Slovakia protests at move, accusing Hungary of revisionism, and threatens to strip any Slovak who applies for dual nationality of their Slovak citizenship.

2010 July - International lenders suspend review of Hungary's 2008 funding arrangement, saying the Fidesz government has failed to spell out its plans for bringing down the budget deficit clearly enough.

2010 October - A state of emergency is declared after a torrent of toxic red sludge escapes from a reservoir of chemical waste, killing seven people and injuring 150. Rivers in western Hungary are left seriously polluted by what is thought to be the country's worst-ever chemical accident.

2011 February - Government agrees to amend media law. European Commission says that the changes meet its concerns over media freedom.

New constitution

2011 April - Parliament approves a new constitution that opponents say threatens democracy by removing checks and balances. The EU expresses concern over the law and asks for it to be withdrawn.

2011 December - Parliament approves controversial new election law that halves the number of MPs and redraws constituency boundaries. Critics object it tilts the system in favour of the governing Fidesz party.

Parliament passes controversial law on central bank reform that gives the government greater control over monetary policy. EU and IMF officials cut short aid talks. The European Central Bank also expresses concern that the new law creates the potential for political control of the Hungarian central bank.

2012 January - Top rate of VAT is increased from 25% to 27% - the highest rate in the EU - as part of a series of austerity measures aimed at curbing the budget deficit.

Tens of thousands of people take part in protests in Budapest as controversial new constitution comes into force.

Credit ratings agency Fitch downgrades Hungary's credit rating to junk status. Two other main ratings agencies already reduced Hungary's rating to junk levels within the previous six weeks.

2012 February - Hungarian state-owned airline Malev goes bankrupt.

2012 April - Hungary makes small changes to the Central Bank law, and the European Commission agrees to resume talks with the IMF on a massive bailout.

Country Profile