THE GEOGRAPHY (Foreign Office UK)
Area: 93,030 sq km (35,920sq mi)
Population: 10.005m (108 per km)
Capital City: Budapest (population:
1,995,700)
People: Magyar (ethnic Hungarian)
89.9%, Roma 4%, German 2.6%, Serb
2%, Slovak 0.8%, Romanian 0.7%
Languages: Hungarian 98.2%, other 1.8%
Religion(s): Roman Catholic 67.5%,
Calvinist 20%, Lutheran 5%, atheist and
other 7.5%
Currency: Forint
Major political parties: Hungarian
Socialist Party (MSzP), Alliance of
Free Democrats (SzDSz), Federation
of Young Democrats-Hungarian Civic
Party (FIDESZ), Hungarian Democratic
Forum (MDF), Hungarian Justice &
Life Party (MIEP) (not in Parliament)
Government: Unicameral Parliamentary
Democracy
GENERAL
Hungary is a democratic republic. It
played an important role in the fall of
Communism in 1989 by opening its
borders allowing East Germans to
enter Western Europe. It is now one of
the fastest growing economies in
Europe. On 13 December Hungary
completed negotiations to join the
European Union. It signed an Accession
Treaty on 16 April after a referendum
in which the Hungarian public voted in
favor of accession by a majority of
84%. Hungary will become a full
member of the European Union on 1
May 2004. It became a member of
NATO on 12 March 1999.
GEOGRAPHY
Hungary is a landlocked state in Central
Europe, bordering Austria, Croatia,
Romania, the Federal Republic of
Yugoslavia, Slovakia, Slovenia and
Ukraine. It is mostly flat, with low
mountains in the north and northeast
and to the north of Lake Balaton
(Western Hungary). Hungary has some
limited natural resources (bauxite,
coal, and natural gas), as well as fertile
soils and arable land.
THE HISTORY (Foreign Office UK)
Hungarians are proud of their nation,
but their strong sense of history is
never far away. Right in the centre of
Central Europe, Hungary has had a
chequered past, culminating in its
domination under a Communist system
during the Cold War.
Recent History
Hungary was on the losing side of both
World Wars. At the end of the first,
Hungary lost two-thirds of its
territory under the treaty of Trianon,
leaving several million ethnic
Hungarians outside the new borders.
After the Second World War, the
Communists had complete control by
1948, despite the low level of support
for Communism in Hungary. Stalin's
death and Khrushchev's denunciation of
him brought about a crisis in Hungary
and led to the 1956 Uprising, which was
suppressed by Soviet troops. After an
initial period of oppression, from 1961
the new Communist leader, Kadar,
instituted a platform of national
reconciliation and then in 1968
instituted new radical economic
reforms unparalleled in any other
communist country. These led to a
gradual improvement in living
standards, a relaxation of the domestic
atmosphere and improved relations
with the West.
Hungary's transition to parliamentary
democracy has run smoothly since
1989. The first democratic elections
after the collapse of communism were
held in March/April 1990. These
elections led to a centre-right
government with the Democratic
Forum as the main partner. After the
May 1994 election, a centre-left
coalition was formed between the
Hungarian Socialist Party (including
some former communists) and the
Alliance of Free Democrats. Both
governments served their full
four-year terms. The 1998 elections
brought the FIDESZ (Hungarian Civic
Party) to power in a coalition with the
right-of-centre Hungarian Democratic
Forum (MDF) and the Independent
Smallholders (FKGB).
Hungary is now moving forwards and
westwards, having joined NATO in
March 1999 and is one of ten candidate
countries also, according to the
December 2002 EU Summit in
Copenhagen, due to join the EU on 1
May 2004.
Recent Political Developments
The Government, elected in April 2002,
is a coalition of the Hungarian Socialist
Party (MSzP) and the Alliance of Free
Democrats, under Prime Minister
PTter Medgyessy. Despite some
members of the MSzP's Communist
past, the government is a centre left
coalition, similar in style to a Western
European Social Democratic
government. It holds a slender 10 seat
advantage over the opposition. The
opposition is composed of FIDESZ, lead
by former Prime Minister Viktor
Orbßn (1998-2002) and their allies the
Hungarian Democratic Forum (MDF).
THE ECONOMY (Foreign Office UK)
GDP: $53.12bn (2001)
GDP per head: $5,200 (2001)
Annual Growth: 3.8% (2001)
Unemployment: 7.2% (2002)
Inflation: 9.2% (2001)
Major Industries: Mining, metallurgy,
construction materials, processed
foods, textiles, chemicals (especially
pharmaceuticals), motor vehicles
Major trading partners: Germany
(33.3%), Austria (8.5%), Italy (7.1%),
Russia (5.3%), France (5.1%), USA
(4.7%), Netherlands (3.9%), UK (3.8%)
(2000 est.)
UK Exports: ú610m (2000)
UK Imports: ú703m (2000)
Aid & development: $122.7m (1995) Debt
û external: $36.32bn (net); $12.97bn
(gross) (2002)
Exchange rate: GBú1 = 376.03 HUF
Further information about Hungary's
economy can be found at Trade
Partners UK Country Profile: Hungary.
In March 1995 the then-Socialist
government was forced to implement
an austerity package (the Bokros
package) designed to address
structural problems. This was in
reaction to a huge rise in the
trade/government deficit and a surge
in inflation.
The Hungarian economy is now reaping
the benefits of these measures.
Despite global conditions, Hungary's
economy has continued to grow at
3.7%, helped by an export-led boom in
manufacturing. Unemployment is now
running at below 8%, and inflation fell
from 28% in 1995 to below 10% in 2001.
Nearly 90% of GDP is now generated
by the private sector compared with
just 10% in 1990. Hungary is
concentrating on structural
investment, and has a higher
skills-base than most of its neighbours
as well as the highest growth rate in
the region.
Hungary is the largest per-capita
recipient of foreign investment in the
region. It needs this investment,
because there is a persistent annual
trade deficit of between US$2-3bn.
FDI has totalled approximately US$22bn
since 1989, much from privatisation
and structural reform. Hungary's
exports have steadily risen since 1993,
and over 75% of trade is now with the
European Union. Hungary belongs to
the IMF, World Bank, WTO, EBRD,
OECD and CEFTA.
INTERNATIONAL RELATIONS
Hungary's Relations with Neighbours
Hungary's priorities include protecting
the interests of the Hungarian
minorities in neighbouring countries
and developing relations with its
neighbours. The Hungarian government
is seeking to improve its relations with
neighbouring countries. These have
historically been coloured by the
presence of large ethnic Hungarian
minorities in Romania (c.2 million),
Slovakia (c.556, 000), FRY (c.350,000)
and the Ukraine (c.163,000). Bilateral
treaties between Hungary and
Slovakia/Romania were completed in
1996. A æStatus Law' passed in early
2001, which aims to provide certain
benefits and privileges in Hungary for
ethnic Hungarians from neighbouring
countries, is causing tension with some
neighbours.
Hungary is an active member of the
OSCE and the Council of Europe. It
plays a role in regional groupings such
as the Visegrad Group (Hungary,
Poland, and the Czech and Slovak
Republics) and the Central European
Initiative. The Central European Free
Trade Agreement (CEFTA) between
the VisTgrad countries came into
force on 1 January 1994. It is a
participant in the Stability Pact, which
aims to bring stability to south-east
Europe through financial and other
assistance.
Hungary's Relations with the
International Community
With NATO membership achieved at the
Washington Summit in March 1999, EU
accession is now Hungary's overriding
foreign policy priority.
At NATO's Madrid summit (July 1997),
Hungary (together with Poland and the
Czech Republic) was invited to join the
Alliance. Hungary became a member of
NATO on 12 March 1999, in time for
the Alliance's 50th anniversary, and
fully supported the NATO campaign in
Kosovo.
In 1991 Hungary signed an Association
Agreement with the EU, which came
into force in February 1994. In April of
the same year a formal application for
membership of the EU was made. The
Luxembourg European Council
confirmed that Hungary should be
invited to apply for membership in 1997
and negotiations opened during the UK
presidency of the EU in March 1998.
Flags Of The World: Republic of Hungary
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