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Hungary received a downward trend arrow due to major riots, described as the most serious since the country’s invasion by the Soviet Union in 1956, following a leaked admission by Prime Minister Gyurcsany that the government had been lying about its economic performance and other issues.
In April 2006, Hungary’s ruling coalition government won reelection. However, later in the year, the country experienced major riots as a result of a leaked admission by Prime Minister Ferenc Gyurcsany that the government had been lying to the people about its economic performance and other issues. The unrest was described as the most serious since the 1956 invasion by the Soviet Union, but Gyurcsany, defying expectations, refused to resign and kept his job. In the wake of the unrest, he promised major fiscal austerity reforms.
King Stephen I, who ruled from 1001 to 1038, is credited with founding the Hungarian state. In the centuries that followed, Hungarian lands passed through Ottoman and Austrian hands. In the mid-nineteenth century, Hungary established a liberal constitutional monarchy under the Austrian Hapsburgs, but two world wars and a Communist dictatorship in the twentieth century forestalled true independence.
The Soviet Union crushed an uprising by Hungarians seeking to liberalize the political and economic system in 1956, an event that remains prominent in the country’s consciousness. Subsequent Communist policy was relatively liberal compared with the rest of the Soviet bloc, but in the late 1980s, the country’s economy was in sharp decline, and the ruling Hungarian Socialist Worker’s Party came under intense pressure to accept reforms. Ultimately, the party congress dissolved itself, and Hungary held its first free, multiparty parliamentary elections in 1990. Since that time, government control in Hungary has passed freely and fairly between left- and right-leaning parties. The country has followed an aggressive path of reform and pursued the popular cause of European integration.
In the 1998 legislative elections, Fidesz-Hungarian Civic Union captured the largest number of seats and ruled in coalition with the Hungarian Democratic Forum (MDF) and the Independent Smallholders’ Party. After two rounds of voting in the 2002 elections, the Hungarian Socialist Party (MSzP) won 42.8 percent (178 mandates), and the Alliance of Free Democrats (SzDSz) narrowly exceeded the 5 percent threshold (19 mandates) for representation in Parliament. Voters elected one candidate on a joint MSzP-SzDSz ticket. Following the election, the MSzP formed a majority government in partnership with the SzDSz. The new Socialist-liberal coalition chose Peter Medgyessy as prime minister.
Medgyessy sent Hungarian troops to join U.S.-led operations in Iraq, an unpopular move among many voters. After years of negotiation, and an 84 percent “yes” vote in a 2003 referendum, Hungary entered the European Union (EU) on May 1, 2004, along with nine other countries, most of them in formerly Communist Eastern Europe. However, shortly afterward, the MSzP, like most governing parties in the EU, did badly in elections to the European Parliament, winning just 9 of 24 seats.
In August that year, Medgyessy resigned as a result of a dispute with his coalition partner, the SzDSz. He was replaced by millionaire business magnate and sports minister Gyurcsany. Gyurcsany’s biggest challenge has been to bring Hungary’s finances under control while keeping the support of the left wing of the MSzP. Hungary’s budget deficit has become the highest in Europe as a percentage of gross domestic product (GDP).
In April 2006, the coalition won reelection after a nationalist and populist campaign by Viktor Orban, the head of Fidesz, failed to capture enough voters from the ruling party. The MSzP won 186 seats, SzDSz won 18, and joint candidates for the two parties won 6, giving the coalition a comfortable majority of 210 out of 386 seats. However, in September, comments Gyurcsany made in a May internal party meeting were leaked to the press. In the recorded remarks, Gyurcsany admitted that his government had repeatedly lied to the electorate about its budgetary and economic performance. The leak caused riots in September, the most extensive unrest since the abortive 1956 revolution. Gyurcsany refused to resign, however, saying that his comments were intended to galvanize his party for major fiscal reforms. Weeks after his taped comments were revealed, his government survived a no-confidence vote. However, the ruling coalition parties—the MSzP and the SzDSz—suffered badly in local elections held later that month, indicating a surviving but much weakened government.
Hungary must maintain a budget deficit of 3 percent of GDP or less to adopt the EU’s euro as its currency (replacing the Hungarian forint), and the government has conceded that it will miss its target date of 2010 for the switch. The 2006 deficit was expected to be 10 percent or more. Gyurcsany has proposed slashing public sector jobs by 20 percent, seriously reforming health care, and imposing other cost-cutting measures. However, the scandal over his leaked comments may have robbed him of the political clout needed to implement the austerity program.
Hungary is an electoral democracy. Voters elect representatives every four years to the 386-seat, unicameral National Assembly under a mixed system of proportional and direct representation. A proposal to move to pure proportional representation has been discussed but not yet adopted, as has a proposal to shrink Parliament to fewer than 300 members. The Hungarian Parliament elects both the president, whose duties are mainly ceremonial, and the prime minister.
Post-Communist elections in Hungary have been generally free and fair, although some problems persist. During the heated 2002 parliamentary elections, few parties respected campaign spending caps. The Organization for Security and Cooperation in Europe (OSCE) observed that state media coverage frequently favored the ruling Fidesz party, and that government-sponsored “voter education” advertisements appeared to mirror Fidesz-sponsored campaign ads. By the 2006 election, however, the OSCE no longer monitored Hungarian polls.
The main political parties are the MSzP and the conservative Fidesz, which has moved in an increasingly nationalist direction. The SzDSz, a free-market and limited-government party, is the third largest party but has considerably less support than the other two, narrowly clearing the minimum 5 percent threshold required to enter Parliament in 2002 and 2006.
Despite the large Roma population, only a small number have been elected to the National Assembly in recent elections. Toward the end of 2002, the European Commission reported that Hungary was not meeting its constitutional obligation to ensure direct parliamentary representation of minorities. Hungary’s constitution guarantees national and ethnic minorities the right to form self-governing bodies, and all 13 recognized minorities have exercised this right.
Previous and current governments have introduced stronger penalties for bribery and implemented a long-term anticorruption strategy. However, some corruption persists. In 2003–2004, a major corruption scandal involving Hungary’s second-largest bank touched then–prime minister Peter Medgyessy and Csaba Laszlo, the finance minister. Laszlo had previously been a director of K&H, the bank at the center of the scandal, and Medgyessy had been the chairman of Inter-Europa, another bank involved in the affair. There were allegations of questionable public tenders in 2004, and Deputy Speaker of Parliament Ferenc Wekler resigned that year after his personal vineyard received large state subsidies. Hungary was ranked 41 out of 163 countries surveyed in Transparency International’s 2006 Corruption Perceptions Index.
Freedom of speech is respected, and independent media operate freely in Hungary, although within a highly polarized atmosphere. Political controversy continues to trouble state television and radio. A 1996 media law requires ruling and opposition parties to share appointments to state media oversight boards. Left-leaning opposition parties had previously accused the Fidesz party of stacking the oversight boards with supporters. After losing power in the 2002 parliamentary elections, Fidesz leaders accused the new Socialist-liberal government of attempting to inappropriately influence state television and radio. A large number of libel suits, some resulting in suspended prison sentences for journalists, contribute to the tense media environment. Foreign ownership of Hungarian media is extensive, but the successful introduction of private Hungarian television stations, such as Hir TV (launched in 2002), has challenged the argument that state-supported media are necessary for balanced coverage. Internet access is unrestricted.
The constitution guarantees religious freedom and provides for the separation of church and state. While adherents of all religions are generally free to worship in their own manner, the state provides financial support and tax breaks to four traditional groups, or “historical churches”: the Roman Catholic Church, the Calvinist Church, the Lutheran Church, and the Alliance of Hungarian Jewish Communities. Some critics have charged that these practices effectively discriminate against smaller denominations. The state does not restrict academic freedom.
The constitution provides for freedom of assembly, and the government respects this right in practice. Nongovernmental organizations are active in Hungary and operate without restrictions. The government respects citizens’ rights to form associations, strike, and petition public authorities. Trade unions account for less than 30 percent of the workforce.
Hungary has a three-tiered, independent judiciary in addition to the Supreme Court and a Constitutional Court. The constitution guarantees equality before the law, and courts are generally fair. Limited budget resources leave the system vulnerable to outside influence, but court funding is being improved, as required by EU membership. The police have been criticized for racist attitudes, and often use of excessive force, toward the Roma minority despite a government campaign against anti-Roma racism. Prisons suffer from overcrowding but generally are approaching Western European standards.
Hungary implemented a legal rights protection network in 2001 to provide legal aid to the Roma community and passed an antidiscrimination law that was introduced in 2003 as a requirement of EU membership. The government has also created a Roma Coordination Council, appointed special commissioners in the Ministry of Education and the Ministry of Employment and Labor to specifically oversee Roma issues, and named a minister-without-portfolio in the prime minister’s office to promote equal opportunity. However, the Roma population continues to face widespread discrimination in many respects, and Roma are five times more likely to live in poverty than the population as a whole.
In 2001, the Parliament passed the controversial Status Law, which granted special health and educational benefits to ethnic Hungarians residing outside the country and caused concern in Romania and Slovakia, which have large Hungarian minorities. In 2003, Hungary modified the application of the law to address these concerns, as well as those of the EU. In December 2004, a referendum was held on extending citizenship to ethnic Hungarians abroad, reawakening some objections among Hungary’s neighbors. Though a majority voted in favor, turnout was insufficient for the referendum to pass.
Women possess the same legal rights as men, but they face hiring and pay discrimination and tend to be underrepresented in senior-level business and governmental positions. Hungary is primarily a transit point, but also a source and destination country, for trafficked persons, including women trafficked for prostitution.