End of communism in Hungary (1989)
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The Communist rule in the Hungarian People's Republic came to an end in 1989. The events were part of the Revolutions of 1989, known in Hungarian as the Rendszerváltás (lit., "regime change" or "system change").
Decades before the Round Table Talks, political and economic forces within Hungary put pressure on Hungarian communism. These pressures contributed to the fall of communism in Hungary in 1989.
The New Economic Mechanism was the only set of economic reform in Eastern Europe enacted after the wave of 1950s and 60s revolutions that survived past 1968. Despite this, it became the weakest point of Hungarian communism, and a pressure that contributed greatly to the transition from Hungarian communism to democracy. In 1968, the Central Committee of the Hungarian Socialist Workers Party launched the NEM to alleviate Hungary’s economic issues and introduced decentralization and fixed prices to offset the flaws of a centrally-planned economy. The NEM was multifaceted and multi-directional, a vigorous overhaul of the Hungarian economy. It sought to accomplish reforms in many sectors of its economy, attempting autonomous self-management of collective farms, the break-up of monopoly industries, and curtailing subsidies other than those used for exports. It also began linking prices to the world market via exchange rates, authorizing workers to produce independently in the state-owned plants after their regular hours, and substituting economic regulators for compulsory directives in the dominant state-owned sector. Finally, it legalized private artisanal, retail, and service activity.
This created a complex and extremely trade-dependent national economy, which was thus vulnerable to general fluctuations in the world market, but also to changes in prices of Soviet-imported raw materials and energy resources. Hungary, being a resource-poor satellite of the USSR, was, for its politically-independent spirit, very dependent on Soviet imports. In 1972, shortly after the NEM’s introduction, the regime began restricting and limiting application of the market mechanisms that were originally implemented. This made it clear that the huge industrial combines, which had more ideological than economic value, would continue to receive the same state protection as in the past, underlining a basic weakness in the system.
By the 1980s, Hungary began to suffer from inflation, which particularly hurt people on fixed incomes. Hungary ran a massive foreign debt, and poverty became widespread. Following the institutionalization of the NEM in the 1970s, price hikes became commonplace in Hungary. However, Kádár, the General Secretary of the Hungarian Socialist Workers’ Party, handled them with adeptness, banking on his continuing political credibility. Kádár had proven his ability to "manage" the Kremlin, and had even stayed in power during the transition from Khrushchev to Brezhnev, remaining one of the only stable political figures in Eastern Europe. Thus, he could explain the higher prices as a down payment to the NEM, and promise good times to come without losing public approval and social order. However, soon enough the NEM "roused more widespread opposition, as many party members who had genuinely supported the strategy of reconciliation with the Soviet system could not make their peace" with the real effects of the economic system. By 1985, with political instability accompanying the economic instability, Kádár and the regime were forced to recognize the impending collapse of communism in Hungary.
Attitudes toward the Warsaw Pact
In 1988, Communist Hungary also started making it easier for its own citizens to travel to the west, which led to May 1989’s removal of Hungary’s barbed wire fence with Austria. This allowed East Germans, who were allowed only to travel to Communist countries, to go to Hungary and escape to West Germany through Austria, never to again return to communist East Germany. Putting foreign and communist relations at risk, Hungary’s Foreign Minister declared in September that it would not stop the thousands of East Germans fleeing to Austria. This reflected Hungary’s general attitude towards the communist satellite setup: popular opinion was against communism, and Hungarians wanted independence.
With Gorbachev’s new policy of not using military action in the satellite states, and of permitting general sovereignty within the confines of each individual country, obeying popular public opinion was necessary. The imposition of order though military force was also out of the question. Imre Pozsgay told the Communist Party’s general secretary that "a Hungarian soldier ordered to shoot on his own people would either shoot his commander or go home to his mother."
Domestic political pressure
The Hungarian Communist elites believed the economic crisis they faced could turn into social upheaval, which came on the backs of decreasing real wages, high inflation, and a mounting debt crisis. A survey from 1986 said that 61% of the Hungarian population described their position as hopeless or continually worsening. Since real wages continued to drop in the following years, there is little reason to believe that the attitudes towards the economic situation became more positive in 1989. Another survey from 1989 indicates that the Hungarians were fully aware of their relative decline. 80% of those surveyed thought Austrians had a higher standard of living better, while only 13% believed that Hungarians were better off.
Hungarian elites were in agreement that the country was undergoing a severe economic crisis which required radical reforms. However, they disagreed as to whether or not political democratization was a prerequisite for gaining public support for said reforms. Politically, the 1980s brought a wave of discontent and demands for reform. Unlike in 1956, there were many reformers from within as well as outside of the Communist Party, showing the political fragmentation of the Hungarian system. Radical reformers and many others demanded a multi-party system which was impossible to attain under a Soviet system. They did not want the Soviet system, but instead to claim the right to national self-determination. On the other hand, General Secretary Grosz was known for advocating "one-party pluralism." In December 1988, Prime Minister Miklós Németh expressed the attitude of many reformers by stating publicly that "the market economy is the only way to avoid a social catastrophe or a long, slow death." This fear that continued economic decline would lead to social upheaval is usually given as the main reason for the regime’s decision to negotiate with the opposition, and a prime pressure that caused the fall of communism in Hungary.
Hungarian Round Table Talks
After Poland's Contract Sejm, Hungary was next to revert to a non-communist government. Although Hungary had achieved some lasting economic reforms and limited political liberalization during the 1980s, major reforms only occurred following the replacement of János Kádár as General Secretary of the Communist Party in 1988. That same year, the Parliament adopted a "democracy package", which included trade union pluralism; freedom of association, assembly, and the press; a new electoral law; and a radical revision of the constitution, among others.
Imre Nagy, whom communists had executed decades ago, was politically rehabilitated and his remains reburied on the 31st anniversary of his execution in the same plot after a funeral organized by, among others, opponents of the country's communist regime. Over 100,000 people are estimated to have attended Nagy's reinterment.
The Pan-European Picnic was a peace demonstration held on the Austrian-Hungarian border near the town of Sopron on 19 August 1989, an important event in political developments which led to the fall of the Iron Curtain and the reunification of Germany.
In October 1989, the Communist Party convened its last congress and re-established itself as the Hungarian Socialist Party. In a historic session from 16 October to 20 October, the parliament adopted legislation providing for multi-party parliamentary elections and a direct presidential election. The legislation transformed Hungary from a People's Republic into the Republic of Hungary, guaranteed human and civil rights, and created an institutional structure that ensured separation of powers among the judicial, legislative, and executive branches of government. On 23 October 1989 at Kossuth tér, Budapest, the Republic of Hungary was proclaimed.
First free elections
The first free parliamentary election, held in May 1990, was a plebiscite of sorts on the communist past. The revitalized and reformed communists performed poorly despite having more than the usual advantages of an "incumbent" party. Populist, center-right, and liberal parties fared best, with the Democratic Forum (MDF) winning 43% of the vote and the Free Democrats (SZDSZ) capturing 24%. Under Prime Minister József Antall, the MDF formed a center-right coalition government with the Independent Smallholders' Party (FKGP) and the Christian Democratic People's Party (KDNP) to command a 60% majority in the parliament. Parliamentary opposition parties included SZDSZ, the Socialists (MSZP), and the Alliance of Young Democrats (Fidesz).
End of the Soviet occupation
Between 12 March 1990 and 19 June 1991 the Soviet troops ("Southern Group of Forces") left Hungary. The last units commanded by General Viktor Silov crossed the Hungarian-Ukrainian border at Záhony - Csap. The total number of Soviet military and civilian personnel stationed in Hungary was around 100,000. The withdrawal was performed with 35,000 railway cars. Since 2001, by a special bill passed in the Hungarian Parliament, 16 June was declared a national memorial day.
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