Hungary was among the former Communist countries that joined the European Union on 1 May 2004. It is a central European country which borders Slovenia, Slovakia, Czech Republic, Romania, Croatia, Serbia, Austria and Ukraine. Hungary was at the forefront of the move from communism to liberal democracy in central Europe and has since made a very successful transition to the market economy.
Recent History
Communist rule in Hungary ended in 1989 when the Hungarian Communist Party voluntarily gave up power under pressure for political reform. Under communist rule Hungary had been the first Eastern European country to gain some economic freedoms. The Third Hungarian Republic was declared on 23 October 1989 and free elections were held in 1990, marking the start of democratic government in the country. Hungary quickly developed a strong party system and has had an orderly transfer of power between the centre-right and centre-left. The key aims of the Hungarian government have been to develop a more open, liberal economy and to forge closer links with western Europe. A major step forward was achieved in 1999, when Hungary became a member of the North Atlantic Treaty Organisation (NATO). This was followed by EU membership in 2004. However, the introduction of a controversial new constitution in Hungary on 1 January 2012 sparked concerns about the curtailing of freedoms and was marked by protests.
Government Structure
Hungary is a representative parliamentary republic. The Prime Minster is the head of the executive and sponsors legislation. The current government is led by Viktor Orban of the conservative Fidesz-Hungarian Civic Union party, which was elected in April 2010 with the biggest victory at a Hungarian general election since the fall of communism twenty years ago. There was concern when the far-right party Jobbik, which has strong anti-semitic and anti-Roma policies, won a large part of the vote - almost beating the Socialist Party (MSZP), which had ruled the country since 2002. The MSZP had faced problems because it led a minority government, which made governing more difficult. The President is elected by the legislature for a term of five years and has a mainly ceremonial role. President Pal Schmitt resigned in April 2012 after it was revealed that the content of his PhD thesis had been heavily plagiarised and he was stripped of his doctoral title. In May 2012 the parliament elected MEP Janos Ader as President. Ader was a founding member of Orbán's Fidesz party, and the Hungarian socialist members of parliament boycotted his election due to their concerns that the right-wing party is becoming over-dominant. Ader had been instrumental in the drafting of the 2012 Hungarian constitution which was heavily criticised. Hungary has a single chamber Parliament (Országgyulés) with 386 members. It has the power to initiate legislation.
Relations with the EU
Membership of the EU was an important political goal of Hungary. Having moved away from the Communist system, it made a strong effort to distance itself from Eastern Europe and to become more integrated with the West. In particular, it made efforts to identify itself as central European country - alongside Austria and Germany - rather than as part of the Communist sphere of influence. 70 per cent of Hungary's trade is now with the EU. In December 2007 Hungary became part of the Schengen zone enabling free movement across national borders. Hungary took over the rotating EU Council Presidency on 1 January 2011.
When it joined the EU in 2004, Hungary did not immediately adopt the Euro; it
is currently trying to meet the convergence criteria, but the country was hit particularly badly by the global financial crisis and October 2008 saw the value of its currency, the forint, plummet. The International Monetary Fund (IMF), the EU and the World Bank granted Hungary a rescue package worth $25 billion in 2008.
In 2012, the introduction of the new Hungarian Constitution caused the European Commission to take legal action against Hungary for infringing EU law, and sparked an on-going war of words between Prime Minister Viktor Orbán and the EU. The new laws included ones which undermined the independence of the Hungarian judiciary and press, manipulated electoral rules in the government party's favour, and curtailed the independence of the Hungarian central bank. Under pressure from the Commission, the latter law was amended and negotiations over a new €15-20 billion bailout package, requested by Hungary in November 2011, were able to recommence. In addition, the EU has suspended €495 million of funds due to Hungary in 2013 over concern about the government's excessive budget deficit which continues to rise. This represented the EU's first action against a country contravening its budget deficit rules.
Facts and Figures
- Hungary's economy shrunk by 6.8% in 2009, and it has grown only slightly since then - by 1.3% in 2010 and 1.7% in 2011.
- Hungary continues to have difficulties with employment: the unemployment rate in January 2012 was 11.3%, compared with the EU average of 10.8%.
- Hungary has a population of almost 10 million people.
- Hungary is home to the largest lake in central Europe, Lake Balaton.
Technical Terms
Convergence Criteria: the rules set down in the Maastricht Treaty that all countries have to meet in order to qualify for membership of the Euro.
