Hungary
Hungary was part of the polyglot Austro-Hungarian Empire, which collapsed in World War I. It fell under communist rule following World War II. A revolt in 1956 and an announced withdrawal from the Warsaw Pact was met with massive military intervention by Moscow. In the more open Gorbachev years, Hungary led the movement to dissolve the Warsaw Pact and steadily shifted toward multiparty democracy and a market-oriented economy. Hungary played an important part in accelerating the collapse of communism across Eastern Europe when in 1989 it opened its border with Austria, allowing thousands of East Germans to escape to the West. Just a few months later the Berlin Wall was history.
Following the collapse of the USSR in 1991, Hungary developed close political and economic ties to Western Europe. 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 its region. Hungary was admitted to Nato in 1999 and joined the EU in May 2004.
The redrawing of European borders that took place after World War I left about five million ethnic Hungarians living in neighboring countries. Their status remains a sensitive issue. Low turnout invalidated a December 2004 referendum on whether or not to offer them citizenship.
Ferenc Gyurcsany's Socialist-led coalition won a decisive victory in parliamentary elections in April 2006, becoming the first government to win consecutive terms since the restoration of democracy in 1990. After his re-election, the prime minister unveiled plans to reduce the budget deficit, cut public sector jobs and raise taxes in a bid to boost growth and steer Hungary toward eurozone membership in 2010. He came under intense opposition pressure, however, in September 2006 with the publication of a tape of him admitting at a party meeting that the government had lied about the state of the economy during the election.
The comments sparked the first violent protests in the capital since the fall of communism. The prime minister said he had been trying to convince his party about the urgent need for reform. (See "Recent Incidents" below for reports of subsequent protests and developments.)
There are currently no known threats to visitors or expatriates in Hungary, which has developed a stable political system and economy over the last decade.
Disagreements with labor unions pose problems from time to time with the transport sector, in particular, subject to disruption through industrial action. However, industrial unrest remains a political irritant rather than a potential source of instability. Prior police approval is required for public demonstrations in Hungary and police oversight is routinely provided to ensure adequate security for participants and passers-by.
