1

COUNTRY REPORT: HUNGARY

INTRODUCTION
Europe is one of the most important continents in the globe which influence the
political and economic scenario of the entire world. Even though the continent is regarded
relatively small, it managed to grip the whole world. However, recent development shows
that the entire European countries are now facing crucial economic crisis which forced them
to reconsider the political and economic model that they have practiced and find a new
model to survive. Hungary, one of Eastern Europes star economic performers, is now facing
the same problems.
This paper is basically dealing with the basic facts, history, and recent developments
that happened in Hungary. Comprises of four subtopics, the paper starts with Hungary basic
facts, and then followed by a discussion on Hungarian political history, government and
economic conditions. System of education with emphasize given to the higher educational
development then is being discussed. An elaborative argument on the recent challenges of
Hungary will then being discussed which comprises of three main issues: amendment of
constitution and problem of democracy; anti-Semitism and minority issues; and economic
difficulties and monetary crisis in Europe.

HUNGARIAN: BASIC FACTS
Hungary is a unique European country with a unique and interesting historical
background. It is a landlocked country, surrounded by some other European countries:
Slovakia to the north; Serbia and Croatia to the south; Ukraine and Romania to the east; and
Slovenia and Austria to west. For that reason some people may called Hungary as the centre
or the heart of Europe. Hungary is the home for the Magyars. Interestingly, the Magyar
which is the biggest ethnic group in Hungary, better known as the Hungarian, has no relation
with its neighbors neither in its genealogy nor language. According to Hoensch (1988),
people may refer Hungary as the Habsburg Empire. Previously, Hungary was in solid
relationship with Austria and that relationship was proven by the term called as Austria-
Hungary Empire which later collapsed during the World War I.
1

There is much similarity about the flag among European country. It is because most
of the European country flag has three different colours in a horizontal line formation. The

1
K. Jorg. Hoensch, A History of Modern Hungary 1867-1994. (New York: Longman Publishing, 1996), 1
2

colours of Hungary flag are red, white and green respectively. Each of the colours brings
each meaning based on Hungarian interpretation. Hungary flag emerged from the
revolutionary tri-colour of the French flag. Red colour represents the strength, the blood of
the Hungarian people that spilled in order to defence their homeland from the enemy; white
is for faithfulness and the idea of freedom and green is for the hope of the Hungarian people
and also represent the fertile land of Hungary. The flag of Hungary is also much related to
the crest that represent the nation itself. The crest is also known as the Coat of Arms.







Figure 1: Hungary official flag and the Coat of Arms

The official name of Hungary is the Republic of Hungary. The official language of
Hungary is Hungarian or also known as Magyar. The biggest ethnic group in Hungary is
Magyars or Hungarians which more than 90% of its total populations. The remaining
populations are Roma and others. The currency used in Hungary is called Forint (Ft). Figure
2 show the picture of the banknotes and coins of the Hungarian Forint. One Hungarian
Forint is equivalent to 0.01 Malaysian Ringgit. Hungary does not have an official religion,
but the majority of the population (around 75%) is Christian in some form, the majority of
those being Roman Catholics.








Figure 2: Banknotes and coins of Hungary

3

The estimated area of Hungary is 93,030 square kilometers. As a comparison,
Hungary is a bit smaller than the U.S state of Indiana. The population of Hungary is almost
up to 10 million people. It is estimated that around 9, 958, 000 in 2012 populated in
Hungary. Life expectancy among the Hungarians is estimated to be around 75.02 years in
2011 with the birth rate and the death rates are 9.49 births and 12.7 deaths per 1, 000
populations respectively.
Hungary is also possessed several rivers that marked Hungary in the map of tourism
in the world. The main rivers in Hungary are Danube and Tisza. Danube is the Europe
second longest river after Volga. The river passing through four Central European capitals
like Budapest in Hungary before reaching the Black Sea via Danube Delta in Romania and
Ukraine. Hungary has the continental weather which hot in summer and cold humid in
winter. The heart of Hungary is Budapest. Budapest is one of the most beautiful cities in the
European continent and the world. Historically, Budapest is a combination of two great
cities in Hungary. Those great cities are Buda and Pest and as they combined Budapest
become the largest city in Hungary. Table 1 below shows type of territories and the name of
territories existed in Hungary.

Type of Territories Territories

19 counties (megyek) Bacs-Kiskun, Baranya, Bekes, Borsod-Abauj-Zemplen, Csongrad,
Fejer, Gyor-Moson-Sopron, Hajdu-Bihar, Heves, Jasz-Nagykun-
Szolnok, Komarom-Esztergom, Nograd, Pest, Somogy, Szabolcs-
Szatmar-Bereg, Tolna, Vas, Veszprem, Zala.

23 urban counties
(megyei varos)
Bekescsaba, Debrecen, Dunaujvaros, Eger, Erd, Gyor,
Hodmezovasarhely, Kaposvar, Kecskemet, Miskolc,
Nagykanizsa, Nyiregyhaza, Pecs, Salgotarjan, Sopron, Szeged,
Szekesfehervar, Szekszard, Szolnok, Szombathely, Tatabanya,
Veszprem, Zalaegerszeg.

1 capital city (fovaros) Budapest
Table 1: Type of Territories

Some Hungarians are among most talented and great men. For example, one of the
football legends of all time, Ferenc Puskas, was recognized as a great footballer and a good
manager. He played for Real Madrid for almost seven years and managed to score 156 goals
in 180 appearances. Some of the great inventions like the Rubiks cube were invented by the
Hungarian name Erno Rubik who is a Hungarian inventor, architect and professor of
architecture. As an addition to that, there were a lot of Hungarians scientists who moved to
USA during the wartime in Europe particularly during the reign of Communist regime.
4


HISTORICAL, POLITICAL & ECONOMIC BACKGROUND
Since over 1000 years ago, the Magyars or Hungarians engaged in a cruel struggle
with great powers and foreign rulers. The fallen of the monarch and proclamation of
Hungarian Republic in 1918 marked a new era for the Magyars. However, the struggle for
power between political parties in modern Hungary did not put the country in stability. Here,
three aspects will be discussed: a) History of Hungary until the Collapse of Monarchism; b)
Political History from the Proclamation of the Republic 1918 until EU Membership; c)
System of Government & Government of the Day; and d) Economic growth and prospect.

a) History of Hungary until the Collapse of Monarchism
The ancestors of the Hungarians, the Magyar tribe moved from southern Ural region
(Bashkiria) into the Carpathian Basin in 896. Hungary became a Christian kingdom under
St. Stephen (Istvan I) in the year 1000. The kingdom then expanded to the Balkans and
Dalmatia. In 1222, The Golden Bull, a charter of equal rights for the nobility was
promulgated by Adrew II (Andras II).
2
The coming of the Mongols-Tartars in 1241 was a
catastrophe for the Magyars. The reconstruction of the kingdom, especially under the reign
of the Angevin Kings eventually made it an influential European kingdom as well as
Christendom. Since 1416, the Muslims Ottoman Empire threatens Hungary. Sultan
Suleiman the Magnificent of the Ottoman Empire annihilated the Hungarian army in 1526
(Battle of Mohacs) which resulted to the division of the country between the two rival kings,
John (Janos) Szapolyai and the Habsburg Ferdinand I.
3
In 1541, as the result of Ottoman
occupation over Buda, Hungary was divided into three parts: under the Ottoman dominion,
the Transylvanian and the western part under Habsburg rule.
4

In early 17
th
century CE, the Magyars started their uprising against the Habsburg and
declared war campaign against it until 1629. Buda was liberated from the Ottoman in 1686
and in 1699, a peace treaty between the Magyars and the Ottoman signified the end of 158
years of occupation by the Turks. From 1703 to 1711, Francis (Ferenc) Rakoczi II led the
War of Liberation against the Habsburg domination. Still under the influence of the
Habsburg, the Hungarian Diet (parliament) sanctioned the succession to the throne of the
female line of the House of Habsburg and at the same time, the nobility retained their
privileges. The intellectual reforms started to happen and Hungarian literature flourished.

2
Miklos Molnar, A Concise History of Hungary. (Cambridge: Cambridge University Press, 2001), 3-40.
3
Ibid., 41-86.
4
Ibid., 86-138.
5

1832 to 1848 marked the period of reformation. The Diet committees supported national
demand for the opening of National Theatre at Pest, the building of suspension bridge to link
Buda and Pest and the first railway line from Pest to Vac.
5

In 1848, a revolution happened at Pest which led to the war of Independence against
the Austrian Habsburg ruler. The National Assembly proclaimed Hungarys independence
and the dethronement of the Habsburg in April 1849, and Hungary was led by the reformer
Louis (Lajos) Kossuth as the president-governor. However, in a short time, just a few
months after the proclamation of independence, the army of Tsar Nicholas I of Russia
invaded Hungary. A new absolutist regime suppressed the Magyars. In 1867, the Dual-
Monarchy of Austro-Hungary established as a result of the compromise. The Dual-
Monarchy consists of two main territories, Cisleithania (the Kingdom and territories under
Austrian Empire) and Transleithania (the lands of the Holy Hungarian crown). The only
areas of common responsibility within the Dual-Monarchy were foreign affairs, defense
policy and a common finance ministry. Apart from these three, both halves of the empire
had their own bicameral parliaments and separate domestic governments with their own
Prime Ministers and cabinets.
6

In 1873, three main cities, Pest, Buda and Obuda were united and Budapest was
born. From 1875 to 1890, the government was led by Count Kalman Tisza. During this
period, some alliances were signed: Dual-Alliances with German Empire (1879) and Triple-
Alliance with Germany and Italy (1882). From 1890 to 1913, the leadership of the
government change several times. In 1914, the First World War (WWI) broke out and the
Austro-Hungary Empire involved. The empire was defeated in 1918 and disintegration
happened. Uprisings and revolutions led to proclamation of Hungarian Republic. King
Charles IV was abdicated and Michael (Mihaly) Karolyi was the President of the Republic.
7


b) Political History from the Proclamation of the Republic 1918 until EU Membership
The President of the republic, Michael Karolyi had tried his best to democratize the
country. However, as a result of the defeat of Austro-Hungarian Empire, Hungary has to
face the consequences. Karolyi faced the internal threat from his political rivalry, the elites
and the socialists-communists while the external threat of the Entente Allies. In March 1919,
Karolyi, the Prime Minister Denes Berinkey and the government resigned. Karolyi then
announced his intention to designate a Social Democrat government by signing the

5
Ibid., 139-200.
6
Ibid., 208.
7
Ibid., 242-249.
6

declaration of passing over power to the proletariat.
8
Hence, Hungary was proclaimed a
Soviet Republic in March 21. The Republic of Council led Hungary after it came under
attacked by Czechoslovakian army. Nevertheless, dictatorship of proletariat (Red Terror) did
not last long when the regime, led by Bella Kun collapse as a result of Romanian occupation
over Hungary. Hungary then controlled by Miklos Horthy, the commander of national army
after Romanian army retreated. During his short-time control, the national army did not only
suppress the communists, but also the Jews. Hence, an unprecedentedly large wave of anti-
Semitism swept over the country (White Terror). Miklos Horthy then elected as regent of the
kingdom by the national assembly in 1920. In the same year, Hungary lost much of its
territories in Treaty of Trianon.
9

Prior to the Second World War (WWII), Hungary faced economic difficulties due to
world repression. In 1930s Hungary allied with the Nazi Germany. However, they broke the
ally in 1944, and consequently, the Nazis forces occupied Hungary. A few months later,
Soviet troops launched their attacks and invaded Hungary. The armistice then signed. In
1946, Hungary was again declared as a republic and general election was done. The
Communist Party merged with social Democrats Party to formed Hungarian Workers Party
in 1948 and Peoples Republic was established in 1949. The country remained under the
control of the communists, even became worse when Matyar Rakosi, the first secretary of
Workers Party, elected as Prime Minister in 1952. He removed the oppositions by means of
purges and political trials. However, after the death of Joseph Stalin, the Prime Minister was
replaced by Imre Nagy, who brought the period of liberalization even though only for a short
period as in 1955, Matyar Rakosi, the previous Prime Minister, forced Nagy to resign and he
once again became the Prime Minister. Dissension between the two camps increased and
Rakosi was forced to resign but replaced by a close friend, Erno Gero.
10

A wave of revolution against communists domination swept the country in 1956. In
October 1956, fighting broke out and consequently, Imre Nagy was re-instated as Prime
Minister. He then renounced Warsaw Pact and promised some other controversial reforms.
The fruit of success of the revolution did not last long. A month later, Soviet troop stationed
in Hungary and suppressed the uprising. The new soviet-supported government then formed
and Janos Kadar was the new Prime Minister. 20,000 participants of the uprisings were
arrested and 2000 of them, including Imre Nagy were executed. The revolt was defeated and
approximately 200,000 Hungarians, mostly young people, skilled workers, white-collar

8
Paul Kelly (ed.). The Europa World Year Book 53rd Edition vol.1. (New York: Routledge, 2012), 2155
9
K. Jorg Hoensch. A History of Modern Hungary, Op. cit., 57
10
Paul Kelly (ed.). The Europa. Op. cit., 2155
7

workers, professionals, and intellectuals, escaped to the West. Kadar, who was also the
President of Hungarian Socialist Workers Party (HSWP) declared his commitment to
commit radical economic and political changes, however refused for immediate possibility
of multi-party political system. However, after the election of Dr. Bruno Ferenc Straub as
the President of the Presidential Council, several liberal reforms started to be done. In 1989,
100,000 people came out for peaceful anti-government demonstration in Budapest. During
the same year, HSWP was suffered from internal crises between the conservatives and the
reformists. Thus, in May 1989, the Council of Ministers declared independent from HSWP
and Kadar was removed from presidential office with health reason. The election was done
and the oppositions consist of three main parties, Hungarian Democratic Forum (HDF),
Liberal Alliance of Free Democrats (AFD), and Federation of Young Democrats (FYD) won
representation in legislative.
11

On 23
rd
October 1989, during the anniversary of 1956 Uprising, the Republic of
Hungary proclaimed. The constitution was amended to be more democratic in nature. The
speaker of the national assembly (Orszzaggyules) was elected as the President. In 1990, the
first multi-party election was conducted. HDF won many seats and formed a coalition
government with other parties. Jozsef Antall, the President of HDF, was elected to chair the
council of Ministers. The new government aimed to get the membership of European
Community (now European Union) and strive for full transition to a market economy.
Following the collapse of the Soviet Union in 1991, Hungary developed closer ties with
Western Europe as well as with other Central European countries. It became a member of
the Visegrad Group in 1991, joined NATO in 1999, and became a member of the European
Union on May 1, 2004.
12


c) System of Government & Government of the Day
The Republic of Hungary is an independent, democratic and constitutional state.
Since the constitutional amendment of 23
rd
October 1989, Hungary is a parliamentary
republic. Legislative power is exercised by the unicameral National Assembly
(Orszzaggyules) that consists of 386 members. Members of the National Assembly are
elected for four years. Executive power is exercised by the Council of Ministers. Legislative
power is vested in both the government and the parliament. The party system since the last
elections is dominated by the conservative Hungarian Civic Union Party (Fidesz).

11
Ibid.,
12
Hungary. Encyclopdia Britannica Online. http://www.britannica.com/EBchecked/topic/276730/Hungary
(accessed Feb. 6, 2013).
8

The two larger oppositions are Hungarian Socialist Party (MSZP) and Movement for
a Better Hungary Party (Jobbik). The Judiciary is independent of the executive and the
legislature. Judges are elected by the National Assembly for nine-year terms. Curia is the
highest court and head of Curia is elected by National Assembly, while the other judges
elected by the president on recommendation of the head of the National Office of the Courts
which is a separate administrative body, and the judges of Regional Courts of Appeal are
appointed by the president
13
.

Table 2.0: Current Government



13
Hungary. CIA World Factbook. https://www.cia.gov/library/publications/the-world-
factbook/geos/hu.html (accessed Feb. 6, 2013).
Hungarian Current Government
Chief of State
Chief of State is the President.
President is elected by the National Assembly for a five-year term.

President Janos Ader (since 10 May 2012)
Head of Government
Head of Government is the Prime Minister.
Prime Minister is elected by the National Assembly on the recommendation of the
president.

Prime Minister Viktor Orban (since 29 May 2010)

Ministries of Hungary
Cabinet of Ministers is proposed by the Prime Minister and appointed and relieved of their
duties by the president.
Ministry Minister
Ministry of Home Affairs Sandor Pinter
Ministry of Rural Development Sandor Fazekas
Ministry of Defence Csaba Hende
Ministry of National Development Zsuzsanna Nemeth
Ministry of Human Resources Zoltan Balog
Ministry of Foreign Affairs Janos Martonyi
Ministry of Administration and Justice Tibor Navracsics
Ministry of National Economic Affairs Gyorgy Matolcsy
Ministers without portfolio Zsolt Semjen,
Tamas Fellegi

9

d) Economic growth and prospect
After the collapse of the Communist regime, Hungary has made the transition both in
politic and economic; from autocracy to democracy; from a centrally planned to a market
economy. From 1989 to 1998, Hungarian economic started to develop tremendously. Many
countrys economic enterprises had been transferred to private sectors. As a country that
posses a bright prospect, with its environmental potentialities; crops: wheat, corn, sunflower
seeds, wine grapes, potatoes, sugar beets; and natural resources: bauxite, coal ore, and
natural gasses, Hungarian managed to attract many foreign companies to invest directly
inside Hungary. Based on the list made by British Geological Survey in 2010, Hungary is
ranked at 19 over 27 main country producing bauxite in the world based on the production
in 2007. Among its main industries are machinery and equipment, livestock, textiles,
pharmaceutical, food processing, motor vehicles, food products, raw materials, fuels and
electricity.
14
However, global financial crisis forced the country to depend on International
Monitory Fund (IMF) in 2008. Since that, the economy grows slowly. The inflation rate is
still high, about 4.3% and the annual GDP growth is under 1% which is very low.
Education

HIGHER EDUCATION
Education is very important sector that every country should emphasize on. To give
good education to the people, the government should invest more to upgrade the
accommodations as well as to fund the institutions and the systems. Starting from the
children early education to the higher education, the educational system should be well
organized. For example, the Ministry of National Resources of Hungary in cooperation with
the Hungarian Eurydice Unit had published a guideline of the education in Hungary entitled
The System of Education in Hungary. The responsible leader for this publication is Konczey
Aron. The educational system of Hungary at the early time was closely related to the Church
and some text founded as the evidence that teaching is part of monastic life.
15

In general, educational system in Hungary can be divided into public education and
higher education. Public education is for all Hungarians and it is compulsory. Public
education in Hungary has several levels such as the kindergarten, primary and lower
secondary education, and upper secondary education. Public education started as early as 5

14
Ibid.
15
Ministry of Education and Culture, Education in Hungary, (Department for EU Relation, Ministry of
Education and Culture Hungary, 2008), 40.
10

years old up to 18 years old.
16
It is mentioned in The System of Education in Hungary that
In the school year of 2009/2010, 775 thousand students were involved in primary and
lower secondary education and 523 thousand in upper secondary education. Approximately,
328 thousand children attended kindergartens, the final year of which is compulsory.
17
The
educational system in Hungary is conveyed and educated in mother tongue, Hungarians.
However in some case other language is also used along with the Hungarians language. For
instance, in the areas of huge numbers of ethnic minorities like Croats, Serbs, and Roma,
dual-language education is present. By the way classes in higher education are often thought
in German or English to help students improving their languages skill as well as to attract
foreign students to further their studies in Hungary. Secondary education offering wide
variety of programmes which also in some cases help students to choose the programme that
they really like. Statistics has shown that the proportion of students studying in programmes
leading to a school-leaving certificate and offering transition to tertiary education is around
the international average.
The focus of this section is about the higher educational system that has been used in
Hungary. In many countries, the government intervention is very important in setting up the
good higher educational system for the local as well as the foreign students. The Act on
Higher Education enacted by the Parliament is important in order to set the way for the
improvement and development of the higher educational system in Hungary. The
government is responsible to establish scholarships for the students.
18

Higher educational institutions in Hungary received financial support from the
government and enjoy the high level of autonomy in professional matters. In Hungary the
higher education institutions is either funded by the state or by the church. In general there
are around 25 universities in Hungary, along with a number of colleges that offer full time
degree program to local and to foreign students. By the way, higher education institutions in
Hungary are not famous in the international university ranking like University of Cambridge
in United Kingdom and Massachusetts Institute of Technology (MIT) in United State of
America. For example, according to the QS World University Rankings, University of
Szeged placed into the top 550 in 2012. Meanwhile, two others university like Corvinus
University of Budapest and Eotvos Lorand University are in the rank of 550 600 last year.
Other top higher education institutions in Hungary are Budapest Business School, Budapest
University of Technology and Economics, University of West Hungary, Semmelweis

16
Konczey Aron, The System of Education in Hungary, (Budapest: Ministry of National Resources, 2011), 5.
17
Ibid.
18
Ibid.
11

University, Obuda University, University of Kaposvar, University of Pannonia, and
University of Debrecen. There are three normal level of higher education in Hungary. Like
any other country, the educational system in Hungary introduced three cycle degree
structure such as Bachelor, Master, and Doctorate.
Some research has been conducted regarding the numbers of local students involved
in higher educational system in Hungary. According to Ministry of Education and Culture,
the numbers of full time local and foreign students increased from one year to another. For
example, in the academic year of 2005/2006 the numbers of full time local students
administered for higher education is 231,482 students. For the academic year of 2006/2007
numbers of full time local students are 238,674 (Ministry of Education and Culture, 2008).
That showed the increasing of more than 3% compare to the previous academic year.
Numbers of foreign students further their study in Hungary also keeps increasing from time
to time. In the diagram below show the chronology of educational system in Hungary.


Figure 3: Hungarian education system (source: Education in Hungary, 2006)
12


MAJOR CHALLENGES
Here, we shall look at four recent challenges faced by the Hungarians. These challenges
shaped the future of the country. If they managed to handle it and solved the problems, the
future of Hungary will be bright. The challenges are a) Amendment of Constitution and
Problem of Democracy; b) Anti-Semitism and Minority Issues; and c) Economic difficulties
and monetary crisis in Europe.

a) Amendment of Constitution and Problem of Democracy
As the result of people angered over previous socialist governments track record,
Hungarian elected the centre-right Fidesz Party with a huge mandate of a two-thirds
majority in parliament election.
19
The Fidesz, led by Victor Orban got the right to amend the
constitution without having any significant opposition. On 1
st
January 2012, a new
constitution promulgated, which blocked any successor government from changing policies
enacted by Fidesz Party. A day after, a huge rally emerged, protesting the policies and the
new constitution.
The EU and other international organizations have expressed deep concern with
respect to these developments in Hungary. On 17 January 2012, the European Commission
launched legal action against Hungary over the new central-bank law and judicial reforms.
There have been tensions with the EU over legislative changes which regarded as
undermining democracy. The struggle for political stability in Hungary is now still in
progress.

b) Anti-Semitism and Minority Issues
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 Movement for
a Better Hungary (Jobbik), known for its anti-Semitic idea, and a move to the authoritarian
right by the Fidesz party, which won the 2010 election.
20

As the result of the political changes, the feeling of apprehensiveness was aroused
among the Jews and the minority ethnic groups such as the Roma. This act of suppress
against the Jews and minorities could be traced back to eve of 1920s, during the reign of
White Terror under the commandment of Miklos Horthy. As been mentioned before,

19
Hungary. BBC News Europe Website. http://www.bbc.co.uk/news/world-europe-17380792 (accessed
Feb. 6, 2013).
20
Hungary. BBC News Europe Website. Op. cit.
13

Hungarian or the Magyar is an ethnic group which has no relation with their neighbouring
countries. Because of that, the feeling of nationalism among the Hungarians is obvious. The
danger of extreme nationalism is it could influence Hungarians policies that would harm
other ethnic groups interests and rights. However, national integration is the key for
countrys harmony and prosperity.
21

Thus, the government continues to strive for good relation with surrounding
countries. Minorities are encouraged to set up their own self-governing councils, and their
cultural and educational institutions which supported by the government.
22


c) Economic difficulties and monetary crisis in Europe
In 2008, as the result of the global financial crisis, Hungary was forced to appeal to
the International Monetary Fund (IMF) and the European Central Bank for massive loans,
financial assistance package worth over $25 billion in order to stave off its economic
collapse.
23
The economic was not even better in 2009. Might be heavily depending on
direct foreign investment has caused a low domestic consumption and as a result of the
global economic downturn, many foreign companies retreated from Hungary. In 2010 the
new government implemented a number of changes including cutting business and
personal income taxes, but imposed crisis taxes on financial institutions, energy and
telecom companies as well as retailers.
The government was also managed increased revenues from exports, especially to
German and in 2011 achieved growth at about 1.7%.
24
Nevertheless, the European
economic crisis placed Hungary in dilemma and again, turned to IMF and European
Central Bank for financial assistant, in order to refinance foreign debt and some other
economic reviving programs. However, in late 2012, the rejection of IMF and EU
economic policy recommendations by the government led to a breakdown with the lenders.
A sharp economic slowdown, relatively weak public finances and rising public debt (as a
result of usury finance and banking system) caused the GDP to fall 1% in 2012. For the
people, as a consequence of that, are suffering from unemployment, which is still remained
high, at more than 11%.
25



21
Ibid,.
22
Baranyy, George. Stephen Szechenyi and the Awakening of Hungarian Nationalism. 1968.
23
Hungary. BBC News Europe Website. Op. cit.
24
The World in Figures 2013, in The Economist Websites, https:/www.theeconomist.com/
25
Hungary. CIA World Factbook. https://www.cia.gov/library/publications/the-world-
factbook/geos/hu.html (accessed Feb. 6, 2013).

14


CONCLUSION
The rivalry among parties in Hungarian politics indicates the battle of ideologies;
between the democrats and the conservatives, the capitalists and the socialists, the liberals
and the fundamentalists. Instability in politics affected socio-economic aspect of the
Hungarians. The Fidesz government has a strong mandate, and has used this to implement
a number of changes designed to strengthen its grip. However, its populism will be limited
by the need to sustain foreign financial support amid a sharp economic slowdown, weak
public finances and rising public debt. The countrys economic growth was developing
well once but then again declining. The economy remains highly exposed to the troubled
euro zone, but it will advance a bit in 2013.
26
However, by exploiting its environmental
potentialities and grooming its domestic consumption, a bright prospect for the future
could become a reality.





















26
The World in Figures 2013, Op. cit.
15

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