Hungary is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine, and Romania to the east, Serbia, and Croatia to the south, Slovenia to the southwest and Austria to the west. The country's capital, and largest city, is Budapest. Hungary is a member of the European Union, NATO, the OECD, the Visegrad Group, and the Schengen Agreement. The official language is Hungarian, also known as Magyar, which is part of the Finno-Ugric group and is the most widely spoken non-Indo-European language in Europe.

Following periods of successive habitation by Celts, Romans, Huns, Slavs, Gepids, and Avars, the foundation of Hungary was laid in the late 9th century by the Hungarian grand prince Arpad, whose great-grandson Saint Stephen I ascended to the throne in 1000 AD. The Kingdom of Hungary existed for 946 years, and at various points was regarded as a major political power in Europe, as well as one of the cultural centres of the Western world. After about 150 years of partial Ottoman occupation (1541-1699), Hungary was integrated into the Habsburg Monarchy, and later constituted half of the Austro-Hungarian Empire (1867-1918).

A great power until the end of World War I, Kingdom of Hungary subsequently lost about 72 percent of its territory, 64 percent of its total population, one third of its ethnic Hungarian population, five of its ten largest cities, and all its sea ports under the Treaty of Trianon, the terms of which have been considered excessively harsh by many in Hungary. The kingdom was succeeded by an authoritarian regime, and then a communist one (1947-1989). Hungary gained widespread international attention during the Revolution of 1956 and the seminal opening of its border with Austria in 1989, which accelerated the collapse of the Eastern Bloc.

Since 1989, Hungary has been governed as a democratic parliamentary republic, and is today considered a developed country with a high-income economy. Hungary is one of the thirty most popular tourist destinations in the world, attracting 10.2 million tourists a year. The country is home to the largest thermal water cave system and the second largest thermal lake in the world (Lake Heviz), the largest lake in Central Europe (Lake Balaton), and the largest natural grasslands in Europe (Hortobagy).

The Roman Empire conquered the territory west of the Danube between 35 and 9 BC. From 9 BC to the end of the 4th century Pannonia was part of the Roman Empire, located within part of later Hungary's territory. A Roman legion of about 600 men in a.d. 41-54, settled down in the Pannonian region, this settlement was named Aquincum. In the neighborhood of the military settlement a civil city raised gradually and in a.d 106 Aquincum became the focal point of the commercial life of this area and the Capital city of the Pannonian Inferior region. This area nowadays corresponds to the Obuda district within Budapest. The Roman ruins are now turned into the Aquincum museum. Later came the Huns, who built a powerful empire. After Hunnish rule, the Germanic Ostrogoths, Lombards, and Gepids, and the polyethnic Avars, had a presence in the Carpathian Basin.

In the late 9th century the land was inhabited mainly by Slavic peoples and Avars. On the eve of the arrival of the Hungarians, East Francia, the First Bulgarian Empire and Great Moravia ruled the territory of the Carpathian Basin. Additionally, the Avars formed a significant part of the population of the Carpathian Basin at the end of the 9th century; both contemporary sources and a growing number of archaeological evidence suggest that groups of the Avars survived the disintegration of their empire.

The freshly unified Hungarians led by Arpad settled in the Carpathian Basin starting in 895. According to linguists, they originated from an ancient Uralic-speaking population that formerly inhabited the forested area between the Volga River and the Ural Mountains.

As a federation of united tribes, Hungary was established in 895, some 50 years after the division of the Carolingian Empire at the Treaty of Verdun in 843, before the unification of the Anglo-Saxon kingdoms. Initially, the rising Principality of Hungary ("Western Tourkia" in medieval Greek sources) was a state consisting of a semi-nomadic people. It accomplished an enormous transformation into a Christian realm during the 10th century.

This state was well-functioning and the nation's military power allowed the Hungarians to conduct successful fierce campaigns and raids from Constantinople to as far as today's Spain. The Hungarians defeated no fewer than three major East Frankish Imperial Armies between 907 and 910. A later defeat at the Battle of Lechfeld in 955 signaled a provisory end to most campaigns on foreign territories, at least towards the West.

The year 972 marked the date when the ruling prince (Hungarian: fejedelem) Geza of the Arpad dynasty officially started to integrate Hungary into the Christian Western Europe. His first-born son, Saint Stephen I became the first King of Hungary after defeating his pagan uncle Koppány, who also claimed the throne. Under Stephen, Hungary was recognized as a Catholic Apostolic Kingdom. Applying to Pope Sylvester II, Stephen received the insignia of royalty (including probably a part of the Holy Crown of Hungary, currently kept in the Hungarian Parliament) from the papacy.

By 1006, Stephen had consolidated his power, and started sweeping reforms to convert Hungary into a Western feudal state. The country switched to using the Latin language, and until as late as 1844, Latin remained the official language of Hungary. Hungary became a powerful kingdom. Ladislaus I extended Hungary's frontier in Transylvania and invaded Croatia in 1091. The Croatian campaign culminated in the Battle of Gvozd Mountain in 1097 and a personal union of Croatia and Hungary in 1102, ruled by Coloman.

The most powerful and wealthiest king of the Arpad dynasty was Bela III, who disposed of the equivalent of 23 tonnes of pure silver a year. This exceeded the income of the French king (estimated at 17 tonnes) and was double the receipts of the English Crown.

Andrew II issued the Diploma Andreanum which secured the special privileges of the Transylvanian Saxons and is considered the first Autonomy law in the world. He led the Fifth Crusade to the Holy Land in 1217, setting up the largest royal army in the history of Crusades. His Golden Bull of 1222 was the first constitution in Continental Europe. The lesser nobles also began to present Andrew with grievances, a practice that evolved into the institution of the parliament (parlamentum publicum).

In 1241-1242, the kingdom received a major blow with the Mongol (Tatar) Invasion. Up to half of Hungary's then population of 2,000,000 were victims of the invasion. King Bela IV let Cumans and Jassic people into the country, who were fleeing the Mongols. Over the centuries they were fully assimilated into the Hungarian population.

As a consequence, after the Mongols retreated, King Bela ordered the construction of hundreds of stone castles and fortifications, to defend against a possible second Mongol invasion. The Mongols returned to Hungary in 1285, but the newly built stone-castle systems and new tactics (using a higher proportion of heavily armed knights) stopped them. The invading Mongol force was defeated near Pest by the royal army of Ladislaus IV of Hungary. As with later invasions, it was repelled handily, the Mongols losing much of their invading force.

The Kingdom of Hungary reached one of its greatest extent during the Arpadian kings, yet royal power was weakened at the end of their rule in 1301. After a destructive period of interregnum (1301-1308), the first Angevin king, Charles I of Hungary - a bilineal descendant of the Arpad dynasty - successfully restored royal power, and defeated oligarch rivals, the so-called "little kings". The second Angevin Hungarian king, Louis the Great (1342-1382), led many successful military campaigns from Lithuania to Southern Italy (Kingdom of Naples), and was also King of Poland from 1370. After King Louis died without a male heir, the country was stabilized only when Sigismund of Luxembourg (1387-1437) succeeded to the throne, who in 1433 also became Holy Roman Emperor. Sigismund was also (in several ways) a bilineal descendant of the Arpad dynasty. The first Hungarian Bible translation was completed in 1439. For half a year in 1437, there was an antifeudal and anticlerical peasant revolt in Transylvania, the Budai Nagy Antal Revolt, which was strongly influenced by Hussite ideas.

From a small noble family in Transylvania, John Hunyadi grew to become one of the country's most powerful lords, thanks to his outstanding capabilities as a mercenary commander. He was elected governor then regent. He was a successful crusader against the Ottoman Turks, one of his greatest victories being the Siege of Belgrade in 1456. The last strong king of medieval Hungary was the Renaissance king Matthias Corvinus (1458-1490), son of John Hunyadi. His election was the first time that a member of the nobility mounted to the Hungarian royal throne without dynastic background. He was a successful military leader and an enlightened patron of the arts and learning. His library, the Bibliotheca Corviniana, was Europe's greatest collection of historical chronicles, philosophic and scientific works in the 15th century, and second only in size to the Vatican Library. The library is a UNESCO World Heritage Site.

The serfs and common people considered him a just ruler because he protected them from excessive demands from and other abuses by the magnates. Under his rule, in 1479, the Hungarian army destroyed the Ottoman and Wallachian troops at the Battle of Breadfield. Abroad he defeated the Polish and German imperial armies of Frederick at Breslau (Wroclaw). Matthias' mercenary standing army, the Black Army of Hungary, was an unusually large army for its time, and it conquered parts of Austria, Vienna (1485) and parts of Bohemia.

King Matthias died without lawful sons, and the Hungarian magnates procured the accession of the Pole Vladislaus II (1490-1516), supposedly because of his weak influence on Hungarian aristocracy. Hungary's international role declined, its political stability shaken, and social progress was deadlocked. In 1514, the weakened old King Vladislaus II faced a major peasant rebellion led by Gyoprgy Dozsa, which was ruthlessly crushed by the nobles, led by John Zapolya.

The resulting degradation of order paved the way for Ottoman pre-eminence. In 1521, the strongest Hungarian fortress in the South, Nandorfehervar (the Hungarian name of Belgrade, Serbia), fell to the Turks. The early appearance of Protestantism further worsened internal relations in the country.

After some 150 years of wars with the Hungarians and other states, the Ottomans gained a decisive victory over the Hungarian army at the Battle of Mohacs in 1526, where King Louis II died while fleeing. Amid political chaos, the divided Hungarian nobility elected two kings simultaneously, John Zapolya and Ferdinand I of the Habsburg dynasty. With the conquest of Buda by the Turks in 1541, Hungary was divided into three parts and remained so until the end of the 17th century. The north-western part, termed as Royal Hungary, was annexed by the Habsburgs who ruled as Kings of Hungary. The eastern part of the kingdom became independent as the Principality of Transylvania, under Ottoman (and later Habsburg) suzerainty. The remaining central area, including the capital Buda, was known as the Pashalik of Buda.

The vast majority of the seventeen and nineteen thousands Ottoman soldiers in service in the Ottoman fortresses in the territory of Hungary were Orthodox and Muslim Balkan Slavs instead of ethnic Turkish people. Southern Slavs were also acting as akinjis and other light troops intended for pillaging in the territory of present-day Hungary.

In 1686, the Holy League's army, containing over 74,000 men from various nations, reconquered Buda from the Turks. After some more crushing defeats of the Ottomans in the next few years, the entire Kingdom of Hungary was removed from Ottoman rule by 1718. The last raid into Hungary by the Ottoman vassals Tatars from Crimea took place in 1717. The constrained Habsburg Counter-Reformation efforts in the 17th century reconverted the majority of the kingdom to Catholicism.

The ethnic composition of Hungary was fundamentally changed as a consequence of the prolonged warfare with the Turks. A large part of the country became devastated, population growth was stunted, and many smaller settlements perished. The Austrian-Habsburg government settled large groups of Serbs and other Slavs in the depopulated south and settled Germans in various areas, but Hungarians were not allowed to settle or re-settle in the south of the Great Plain.

Between 1703 and 1711, there was a large-scale uprising led by Francis II Rakoczi, who after the dethronement of the Habsburgs in 1707 at the Diet of Onod, took power provisionally as the Ruling Prince of Hungary for the wartime period, but refused the Hungarian Crown and the title "King". The uprisings lasted for years. After 8 years of war with the Habsburg Empire, the Hungarian Kuruc army lost the last main battle at Trencsen (1708).

Count Istvan Szechenyi, the "greatest Hungarian"; he donated a year's income to establish the Hungarian Academy of Sciences

During the Napoleonic Wars and afterwards, the Hungarian Diet had not convened for decades. In the 1820s, the Emperor was forced to convene the Diet, which marked the beginning of a Reform Period (1825-1848, Hungarian: reformkor).

Count Istvan Szechenyi, one of the most prominent statesmen of the country, recognized the urgent need of modernization and his message got through. The Hungarian Parliament was reconvened in 1825 to handle financial needs. A liberal party emerged and focused on providing for the peasantry. Lajos Kossuth - a famous journalist at that time - emerged as leader of the lower gentry in the Parliament. A remarkable upswing started as the nation concentrated its forces on modernization even though the Habsburg monarchs obstructed all important liberal laws relating to civil and political rights and economic reforms. Many reformers (Lajos Kossuth, Mihaly Tancsics) were imprisoned by the authorities.

On 15 March 1848, mass demonstrations in Pest and Buda enabled Hungarian reformists to push through a list of 12 demands. Under governor and president Lajos Kossuth and the first Prime Minister, Lajos Batthyany, the House of Habsburg was dethroned.

The Habsburg Ruler and his advisors skillfully manipulated the Croatian, Serbian and Romanian peasantry, led by priests and officers firmly loyal to the Habsburgs, and induced them to rebel against the Hungarian government, though the Hungarians were supported by the vast majority of the Slovak, German and Rusyn nationalities and by all the Jews of the kingdom, as well as by a large number of Polish, Austrian and Italian volunteers. In July 1849 the Hungarian Parliament proclaimed and enacted the first laws of ethnic and minority rights in the world. Many members of the nationalities gained the coveted highest positions within the Hungarian Army, like General Janos Damjanich, an ethnic Serb who became a Hungarian national hero through his command of the 3rd Hungarian Army Corps.

Initially, the Hungarian forces (Honvedseg) defeated Austrian armies. To counter the successes of the Hungarian revolutionary army, Habsburg Emperor Franz Joseph I asked for help from the "Gendarme of Europe", Czar Nicholas I, whose Russian armies invaded Hungary. This made Artur Gorgey surrender in August 1849. The leader of the Austrian army, Julius Jacob von Haynau, became governor of Hungary for a few months, and ordered the execution of the 13 Martyrs of Arad, leaders of the Hungarian army, and Prime Minister Batthyany in October 1849. Lajos Kossuth escaped into exile. Following the war of 1848 - 1849, the whole country was in "passive resistance".

Because of external and internal problems, reforms seemed inevitable and major military defeats of Austria forced the Habsburgs to negotiate the Austro-Hungarian Compromise of 1867, by which the dual Monarchy of Austria-Hungary was formed. This Empire had the second largest area in Europe (after the Russian Empire), and it was the third most populous (after Russia and the German Empire). The two realms were governed separately by two parliaments from two capital cities, with a common monarch and common external and military policies. Economically, the empire was a customs union. The old Hungarian Constitution was restored, and Franz Joseph I was crowned as King of Hungary. The country was mixed with regard to both mother tongue and religion.

The era witnessed impressive economic development. The formerly backward Hungarian economy became relatively modern and industrialized by the turn of the 20th century, although agriculture remained dominant until 1890. In 1873, the old capital Buda and Obuda were officially united with Pest, thus creating the new metropolis of Budapest.

Technological change accelerated industrialization and urbanization. The GNP per capita grew roughly 1.45% per year from 1870 to 1913. The growth was even higher, by a substantial amount, in the Hungarian-language area of the country. That level of growth compared very favorably to that of other European nations such as Britain (1.00%), France (1.06%), and Germany (1.51%).[citation needed] Many of the state institutions and the modern administrative system of Hungary were established during this period.

After the Assassination in Sarajevo, the Hungarian prime minister Istvan Tisza and his cabinet tried to avoid the outbreak and escalating of a war in Europe, but their diplomatic efforts were unsuccessful.

Austria-Hungary drafted 9 million (fighting forces: 7.8 million) soldiers in World War I (over 4 million from the Kingdom of Hungary) on the side of Germany, Bulgaria and Turkey. The troops raised in the Kingdom of Hungary spent little time defending the actual territory of Hungary, with the exceptions of the Brusilov Offensive in June 1916, and a few months later, when the Romanian army made an attack into Transylvania, both of which were repelled. In comparison of the total army, Hungary's loss ratio was more than any other nations of Austria-Hungary. There could be a possible cause: the Hungarian soldiers were considered to be more trustworthy and disciplined than soldiers from other ethnic groups.

The Central Powers conquered Serbia. Romania declared war. The Central Powers conquered Southern Romania and the Romanian capital Bucharest. In 1916 Emperor Franz Joseph died, and the new monarch Charles IV sympathized with the pacifists. With great difficulty, the Central powers stopped and repelled the attacks of the Russian Empire.

The Eastern front of the Allied (Entente) Powers completely collapsed. The Austro-Hungarian Empire then withdrew from all defeated countries. On the Italian front, the Austro-Hungarian army made no progress against Italy after January 1918. Despite great Eastern successes, Germany suffered complete defeat on the more important Western front.

By 1918, the economic situation had deteriorated (strikes in factories were organized by leftist and pacifist movements) and uprisings in the army had become commonplace. In the capital cities, the Austrian and Hungarian leftist liberal movements (the maverick parties) and their leaders supported the separatism of ethnic minorities.

Austria-Hungary signed a general armistice in Padua on 3 November 1918. In October 1918, Hungary's union with Austria was dissolved.

With the Treaty of Trianon, Hungary lost 72% of its territory, its sea ports and 3,425,000 ethnic Hungarians.

The success of the 1918 Aster Revolution in Budapest brought Mihaly Karolyi to power as prime minister and later as president of the first republic of Hungary. Karolyi ordered the full disarmament of the Hungarian Army, leaving Hungary without any national defence.

Romania took control of Transylvania and other parts of eastern Hungary, Czechoslovakia took control of the northern parts (also known as Upper Hungary), and a joint Serbian and French army took control of the southern parts. These territories had majority populations of the respective occupying nations, but territories were occupied further than the ethnic boundaries, and so each had a significant Hungarian population as well. The post-War Entente backed the subsequent annexations of these territories.

In March 1919, the Communists took power in Hungary. In April, Bela Kun proclaimed the Hungarian Soviet Republic. Kun's government, like its immediate predecessor, proved to be short-lived. Despite some initial military successes against the Czechoslovakian Army, the Romanian Army defeated Kun's troops and took Budapest, ousting his regime. On 4 June 1920, the Treaty of Trianon was signed, which established new borders for Hungary. Hungary lost 71% of its territory and 66% of its population. About one-third of the ethnic Hungarian population (3.4 of 10 million Hungarians) became minorities in neighboring countries. The new borders separated Hungary's industrial base from its sources of raw materials, and Hungary also lost its only sea port at Fiume (today Rijeka). The revision of the Treaty of Trianon rose to the top of Hungary's political agenda. Some wanted to restore the full pre-Trianon area, others only the ethnic Hungarian majority territories.

Rightist Hungarian military forces, led by the former Austro-Hungarian Admiral Miklos Horthy, entered Budapest in the wake of the Romanian Army's departure and filled the vacuum of state power. In January 1920, elections were held for a unicameral assembly. Admiral Horthy was elected Regent, thereby formally restoring the monarchy to Hungary. However, there would be no more kings of Hungary despite attempts by the former Habsburg ruler Charles IV to return to his former seat of power. Horthy ruled as Regent until 16 October 1944. Hungary remained a parliamentary democracy, but after 1932, autocratic tendencies gradually returned as a result of Nazi influence and the Great Depression.

The Germans and Italians granted Hungary a part of southern Czechoslovakia and Subcarpathia in the First Vienna Award of 1938, and then northern Transylvania in the Second Vienna Award of 1940. In 1941, the Hungarian army took part in the invasion of Yugoslavia, regaining some more territories. On 22 June 1941, Germany invaded the Soviet Union under Operation Barbarossa; Hungary joined the German effort and declared war on the Soviet Union, and formally entered World War II on the side of the Axis Powers. In late 1941, the Hungarian troops on the Eastern Front experienced success at the Battle of Uman.

Iy 1943, after the Hungarian Second Army suffered extremely heavy losses at the River Don, the Hungarian government sought to negotiate a surrender with the Allies. In 1944, as a result of this duplicity, German troops occupied Hungary in what was known as Operation Margarethe. Miklós Horthy made a token effort to disengage Hungary from the war, but he was replaced by a puppet government under the pro-German Prime Minister Ferenc Szálasi of the Arrow Cross Party.

In late 1944, Hungarian troops on the Eastern Front again experienced success at the Battle of Debrecen, but this was followed immediately by the Soviet invasion of Hungary and the Battle of Budapest. During the German occupation in May-June 1944, the Arrow Cross Party and Hungarian police deported nearly 440,000 Jews, mostly to Auschwitz. The Swedish Diplomat Raoul Wallenberg managed to save a considerable number of Hungarian Jews by giving them Swedish passports, but when the Soviets arrived, he was arrested as a spy and disappeared. Rudolf Kastner (original spelling Kasztner), one of the leaders of the Hungarian Aid and Rescue Committee, negotiated with senior SS officers such as Adolf Eichmann to allow a number of Jews to escape in exchange for money, gold, and diamonds. Other diplomats also organized false papers and safe houses for Jews in Budapest and hundreds of Hungarian people were executed by the Arrow Cross Party for sheltering Jews.

The war left Hungary devastated, destroying over 60% of the economy and causing huge loss of life. Many Hungarian men, women, and children were raped, murdered and executed or deported for slave labour by Czechoslovaks, Soviet Red Army troops, and Yugoslavs (mostly Serbian partisans and regular units)— by the end of the war approximately 500,000-650,000 people.

On 13 February 1945, the Hungarian capital city surrendered unconditionally. By the agreement between the Czechoslovakian president Edvard Benesh and Joseph Stalin, expulsions of Hungarians from Czechoslovakia and Slovaks from Hungary started. 250,000 ethnic Germans were also transferred to Germany pursuant to article XIII of the Potsdam Protocol of 2 August 1945.

The territories regained with the Vienna Awards and during World War II were again lost by Hungary with the Paris Peace Treaty in 1947.

Following the fall of Nazi Germany, Soviet troops occupied all of the country, and Hungary gradually became a communist satellite state of the Soviet Union. In internal political conflict, an estimated 2,000 people were executed and over 100,000 were imprisoned. Approximately 350,000 officials and intellectuals were purged from 1948 to 1956. Many freethinkers and democrats were secretly arrested and taken to inland or foreign concentration camps without any judicial sentence. Some 600,000 Hungarians were deported to Soviet labour camps after the Second World War and at least 200,000 died in captivity.

Matyas Rakosi adhered to a militarist, industrialising, and war compensation economic policy, and the standard of living fell. The rule of the Rakosi government led to the Hungarian Revolution of 1956 and Hungary's temporary withdrawal from the Warsaw Pact. The multi-party system was restored by the Prime Minister Imre Nagy. Many people were shot and killed by Soviet and Hungarian political police (ÁVH) at peaceful demonstrations throughout the country, creating a nationwide uprising.

Spontaneous revolutionary militias fought against the Soviet Army and the AVH in Budapest. The roughly 3,000-strong Hungarian resistance fought Soviet tanks using Molotov cocktails and machine pistols. Though the preponderance of the Soviets was immense, they suffered heavy losses, and by 30 October, most Soviet troops had withdrawn from Budapest to garrisons in the Hungarian countryside.

On 4 November 1956, the Soviets retaliated, sending in more than 150,000 troops and 2,500 tanks. During the Hungarian uprising, an estimated 20,000 people were killed, nearly all during the Soviet intervention. Nearly a quarter of a million people left the country in 1956 during the brief time that the borders were open. To commemorate this sad event of the Hungarian history a striking memorial was erected at the edge of the City park in 2006 in occasion of the 50 years anniversary. The monument is a rusty iron shaped wedge that gradually becomes shiny symbolizing the hungarian forces joining against the Soviet Regime. This monument is known as the Monument of the Revolution or as the Monument to the uprising.

In the first days of November, the Soviet leadership was still undecided about the developments in Hungary, but soon the position prevailed that an intervention was necessary to prevent Hungary from breaking away from the Soviet bloc. Janos Kadar (Minister of State in the Imre Nagy cabinet) was chosen by the Soviet party leadership to act as the head of the new government intended to replace Imre Nagy's coalition cabinet. In the reprisals following the crushing of the uprising by the Soviet troops, 21,600 mavericks (democrats, liberals, and reformist communists) were imprisoned; 13,000 interned; and 230 brought to trial and executed. Imre Nagy, the legal Prime Minister of the country, was condemned to death and executed in 1958.

Following the invasion, Hungary was under Soviet military administration for a couple of months, but Kadar stabilized the political situation in a remarkably short time. In 1963, the government granted a general amnesty and released the majority of those imprisoned for their active participation in the uprising. Kadar proclaimed a new policy line, according to which the people were no longer compelled to profess loyalty to the party if they tacitly accepted the Socialist regime as a fact of life, in other words, "Those who are not against us are with us," as Kadar put it in one of his political speeches. Kadar introduced new planning priorities in the economy. Consumer goods and food were produced in greater volumes and military production was reduced to one-tenth of the pre-revolutionary level.

This was followed in 1968 by the New Economic Mechanism (NEM), which introduced free-market elements into Socialist command economy. From the 1960s through the late 1980s, Hungary was often referred to as "the happiest barrack" within the Eastern bloc. As a result of the relatively high standard of living, a more liberalised economy, a less oppressed press, and less restricted travel rights than elsewhere in the Eastern Bloc, Hungary was generally considered one of the more liberal countries in which to live in Eastern Europe during the Cold War.

In March 1989, for the first time in decades, the government declared the anniversary of the 1848 Revolution a national holiday. Opposition demonstrations filled the streets of Budapest with more than 75,000 marchers. Premier Karoly Grosz met Mikhail Gorbachev in Moscow, who accepted Hungary's moves toward a multi-party system and promised that the USSR would not interfere in Hungary's internal affairs. The Opposition Round Table Consultations with the representatives of the government, which was founded for the stated goal of introducing multi-party democracy, market economy and change of power, and defining its characteristics, started its sessions. In May, Hungary began taking down its barbed wire fence along the Austrian border – the first tear in the Iron Curtain.

June brought the reburial of former Prime Minister Imre Nagy, executed after the 1956 Revolution, drawing a crowd of 250,000 at the Heroes' Square. The last speaker, 26-year-old Viktor Orbán, publicly called for Soviet troops to leave Hungary. In September, Foreign Minister Gyula Horn announced that East German refugees in Hungary would not be repatriated but would instead be allowed to go to the West. The resulting exodus shook East Germany and hastened the fall of the Berlin Wall. On 23 October, Matyas Szuros declared Hungary a republic.

The majorities in the decisive bodies of the state party agreed to give up their monopoly on power, paving the way for free elections in March 1990. The party's name was changed from the Hungarian Socialist Workers' Party to simply the Hungarian Socialist Party (MSZP] and a new programme advocating social democracy and a free-market economy was adopted. This was not enough to shake off the stigma of four decades of autocratic rule, however, and the 1990 election was won by the centre-right Hungarian Democratic Forum (MDF), which advocated a gradual transition towards open markets.

The liberal Alliance of Free Democrats (SZDSZ), which had called for much faster change, came second and the Socialist Party trailed far behind. As Gorbachev looked on, Hungary changed political systems with scarcely a murmur and the last Soviet troops left Hungary in June 1991. In coalition with two smaller parties, the MDF provided Hungary with sound government during its hard transition to a full market economy.

The economic changes of the early 1990s resulted in declining living standards for most people in Hungary. In 1991 most state subsidies were removed, leading to a severe recession exacerbated by the fiscal austerity necessary to reduce inflation and stimulate investment. This made life difficult for many Hungarians, and in the May 1994 elections the Hungarian Socialist Party led by former Communists won an absolute majority in parliament.

All three main political parties advocated economic liberalisation and closer ties with the West. In 1998, the European Union began negotiations with Hungary on full membership. In a 2003 national referendum, 85% voted in favour of Hungary joining the European Union, which followed on 1 May 2004.