Hungary

Compiled from the August 2007 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:

Republic of Hungary

PROFILE

Geography

Area: 93,030 sq. km. (35,910 sq. mi.); about the size of Indiana.

Cities: Capital—Budapest (est. pop. 2 million). Other cities—Debrecen (220,000); Miskolc (208,000); Szeged (189,000); Pecs (183,000).

Terrain: Mostly flat, with low mountains in the north and northeast and north of Lake Balaton.

Climate: Temperate.

People

Nationality: Noun and adjective—Hungarian(s).

Population: (2006 est.) 9,981,334.

Ethnic groups: Magyar 89.9%, Romany 4% (est.), German 2.6%, Serb 2%, Slovak 0.8%, Romanian 0.7%.

Religions: Roman Catholic 68%, Calvinist 21%, Lutheran 4%, Jewish 1%, others, including Baptist Adventist, Pentecostal, Unitarian 3%.

Languages: Magyar 98.2%, other 1.8%.

Education: Compulsory to age 16.Attendance—96%. Literacy—99%.

Health: (2006 est.) Infant mortality rate—8.39/1,000. Life expectancy—men 68.45 yrs., women 77.14 yrs.

Work force: (2004 est. 5.2 million) Agriculture—8%; industry and commerce—42%; services—32%; government—7%.

Government

Type: Republic.

Constitution: August 20, 1949. Substantially rewritten in 1989, amended in 1990.

Government branches: Executive—president of the Republic (head of state), prime minister (head of government), Council of Ministers. Legislative—National Assembly (386 members, 4-year term). Judicial—Supreme Court and Constitutional Court.

Political subdivisions: 19 counties plus capital region of Budapest.

Political parties: Fidesz-Hungarian Civic Party—center-right; Hungarian Socialist Party (MSZP)—center-left; Alliance of Free Democrats (SZDSZ)—center-left; Hungarian Democratic Forum (MDF)—center-right.

Economy

GDP: (2006 est.) $113.1 billion.

Annual growth rate: (2006 est.) 3.8%

Per capital GDP: (PPP 2006 est.) $17,300.

Natural resources: bauxite, coal, natural gas, fertile soils, arable land.

Agriculture/forestry: (2006 est., 3.1% of GDP) Products—meat, corn, wheat, sunflower seeds, potatoes, sugar beets, vegetables, fruits.

Industry and construction: (2006 est., 32.1% of GDP) Types—machinery, vehicles, chemicals, precision and measuring equipment, computer products, medical instruments, pharmaceuticals.

Trade: (2006 est.) Exports ($67.99 billion)—machinery, vehicles, food, beverages, tobacco, crude materials, manufactured goods, fuels and electric energy. Imports ($69.75 billion)—machinery, vehicles, manufactured goods, fuels and electric energy, food, beverages, and tobacco. Major markets—EU (Germany, Austria, Italy), CEFTA, CIS, U.S. Major suppliers—EU (Germany, Austria, Italy, France), CIS, CEFTA, U.S.

PEOPLE AND HISTORY

Ethnic groups in Hungary include Magyar (nearly 90%), Romany, German, Serb, Slovak, and others. The majority of Hungary's people are Roman Catholic; other religions represented are Calvinist, Lutheran, Jewish, Baptist, Adventist, Pentecostal, and Unitarian. Magyar is the predominant language. Hungary has long been an integral part of Europe. It converted to Western Christianity before AD 1000.

Although Hungary was a monarchy for nearly 1,000 years, its constitutional system preceded by several centuries the establishment of Western-style governments in other European countries. Following the defeat of the Austro-Hungarian Dual Monarchy (1867-1918) at the end of World War I, Hungary lost two-thirds of its territory and nearly as much of its population. It experienced a brief but bloody communist dictatorship and counterrevolution in 1919, followed by a 25-year regency under Adm. Miklos Horthy. Although Hungary fought in most of World War II as a German ally, it fell under German military occupation following an unsuccessful attempt to switch sides on October 15, 1944. Under occupation, the Hungarian Government deported or executed and seized the property of hundreds of thousands of its minority citizens, mostly members of the Jewish community. On January 20, 1945, a provisional government concluded an armistice with the Soviet Union and established the Allied Control Commission, under which Soviet, American, and British representatives held complete sovereignty over the country. The Commission's chairman was a member of Stalin's inner circle and exercised absolute control.

Communist Takeover

The provisional government, dominated by the Hungarian communist party (MKP), was replaced in November 1945 after elections which gave majority control of a coalition government to the Independent Smallholders’ Party. The government instituted a radical land reform and gradually nationalized mines, electric plants, heavy industries, and some large banks. The communists ultimately undermined the coalition regime by discrediting leaders of rival parties and through terror, blackmail, and framed trials. In elections tainted by fraud in 1947, the leftist bloc gained control of the government. Postwar cooperation between the U.S.S.R. and the West collapsed, and the Cold War began. With Soviet support, Moscow-trained Matyas Rakosi began to establish a communist dictatorship.

By February 1949, all opposition parties had been forced to merge with the MKP to form the Hungarian Workers’ Party. In 1949, the communists held a single-list election and adopted a Soviet-style constitution, which created the Hungarian People's Republic. Rakosi became Prime Minister in 1952. Between 1948 and 1953, the Hungarian economy was reorganized according to the Soviet model. In 1949, the country joined the Council for Mutual Economic Assistance (CMEA, or Comecon), a Soviet-bloc economic organization. All private industrial firms with more than 10 employees were nationalized. Freedom of the press, religion, and assembly were strictly curtailed. The head of the Roman Catholic Church, Cardinal Jozsef Mindszenty, was sentenced to life imprisonment.

Forced industrialization and land collectivization soon led to serious economic difficulties, which reached crisis proportions by mid-1953, the year Stalin died. The new Soviet leaders blamed Rakosi for Hungary's economic situation and began a more flexible policy called the “New Course.” Imre Nagy replaced Rakosi as prime minister in 1953 and repudiated much of Rakosi's economic program of forced collectivization and heavy industry. He also ended political purges and freed thousands of political prisoners. However, the economic situation continued to deteriorate, and Rakosi succeeded in disrupting the reforms and in forcing Nagy from power in 1955 for “rightwing revisionism.” Hungary joined the Soviet-led Warsaw Pact Treaty Organization the same year. Rakosi's attempt to restore Stalinist orthodoxy then foundered as increasing opposition developed within the party and among students and other organizations after Khrushchev's 1956 denunciation of Stalin. Fearing revolution, Moscow replaced Rakosi with his deputy, Erno Gero, in order to contain growing ideological and political ferment.

1956 Revolution

Pressure for change reached a climax on October 23, 1956, when security forces fired on Budapest students marching in support of Poland's confrontation with the Soviet Union. The ensuing battle quickly grew into a massive popular uprising. Gero called on Soviet troops to restore order on October 24. Fighting did not abate until the Central Committee named Imre Nagy as prime minister on October 25, and the next day Janos Kadar replaced Gero as party first secretary. Nagy dissolved the state security police, abolished the one-party system, promised free elections, and negotiated with the U.S.S.R. to withdraw its troops.

Faced with reports of new Soviet troops pouring into Hungary despite Soviet Ambassador Andropov's assurances to the contrary, on November 1 Nagy announced Hungary's neutrality and withdrawal from the Warsaw Pact. He appealed to the United Nations and the Western powers for protection of its neutrality. Preoccupied with the Suez Crisis, the UN and the West failed to respond, and the Soviet Union launched a massive military attack on Hungary on November 3. Some 200,000 Hungarians fled to the West. Nagy and his colleagues took refuge in the Yugoslav Embassy. Kadar, after delivering an impasssioned radio address on November 1 in support of “our glorious revolution” and vowing to fight the Russians with his bare hands if they attacked Hungary, defected from the Nagy cabinet; he fled to the Soviet Union and on November 4 announced the formation of a new government. He returned to Budapest and, with Soviet support, carried out severe reprisals; thousands of people were executed or imprisoned. Despite a guarantee of safe conduct, Nagy was arrested and deported to Romania. In June 1958, the government announced that Nagy and other former officials had been executed.

Reform Under Kadar

In the early 1960s, Kadar announced a new policy under the motto of “He who is not against us is with us.” He declared a general amnesty, gradu-

ally curbed some of the excesses of the secret police, and introduced a relatively liberal cultural and economic course aimed at overcoming the post-1956 hostility toward him and his regime. In 1966, the Central Committee approved the “New Economic Mechanism,” through which it sought to overcome the inefficiencies of central planning, increase productivity, make Hungary more competitive in world markets, and create prosperity to ensure political stability. However, the reform was not as comprehensive as planned, and basic flaws of central planning produced economic stagnation. Over the next two decades of relative domestic quiet, Kadar's government responded to pressure for political and economic reform and to counterpressures from reform opponents. By the early 1980s, it had achieved some lasting economic reforms and limited political liberalization and pursued a foreign policy which encouraged more trade with the West. Nevertheless, the New Economic Mechanism led to mounting foreign debt incurred to shore up unprofitable industries.

Transition to Democracy

Hungary's transition to a Western-style parliamentary democracy was the first and the smoothest among the former Soviet bloc, inspired by nationalism that long had encouraged Hungarians to control their own destiny. By 1987, activists within the party and bureaucracy and Budapest-based intellectuals were increasing pressure for change. Some of these became reform socialists, while others began movements which were to develop into parties. Young liberals formed the Federation of Young Democrats (Fidesz); a core from the so-called Democratic Opposition formed the Association of Free Democrats (SZDSZ), and the neopopulist national opposition established the Hungarian Democratic Forum (MDF). Civic activism intensified to a level not seen since the 1956 revolution.

In 1988, Kadar was replaced as General Secretary of the MKP, and reform communist leader Imre Pozs-gay was admitted to the Politburo. 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. A Central Committee plenum in February 1989 endorsed in principle the multiparty political system and the characterization of the October 1956 revolution as a “popular uprising,” in the words of Pozsgay, whose reform movement had been gathering strength as communist party membership declined dramatically. Kadar's major political rivals then cooperated to move the country gradually to democracy. The Soviet Union reduced its involvement by signing an agreement in April 1989 to withdraw Soviet forces by June 1991.

National unity culminated in June 1989 as the country reburied Imre Nagy, his associates, and, symbolically, all other victims of the 1956 revolution. A national roundtable, comprising representatives of the new parties and some recreated old parties—such as the Smallholders and Social Democrats—the communist party, and different social groups, met in the late summer of 1989 to discuss major changes to the Hungarian constitution in preparation for free elections and the transition to a fully free and democratic political system.

In October 1989, the communist party convened its last congress and re-established itself as the Hungarian Socialist Party (MSZP). In a historic session on October 16-20, 1989, the Parliament adopted legislation providing for multiparty 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 ensures separation of powers among the judicial, executive, and legislative branches of government. But because the national roundtable agreement was the result of a compromise between communist and noncommunist parties and societal forces, the revised constitution still retained vestiges of the old order. It championed the “values of bourgeois democracy and democratic socialism” and gave equal status to public and private property. Such provisions were erased in 1990 as the need for compromise solutions was obviated by the poor performance of the MSZP in the first free elections.

Free Elections and a Democratic Hungary

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 Jozsef 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). Peter Boross succeeded as Prime Minister after Antall died in December 1993. The Antall/Boross coalition governments achieved a reasonably well-functioning parliamentary democracy and laid the foundation for a free market economy.

In May 1994, the socialists came back to win a plurality of votes and 54% of the seats after an election campaign focused largely on economic issues and the substantial decline in living standards since 1990. A heavy turnout of voters swept away the right-of-center coalition but soundly rejected extremists on both right and left. Despite its neocommunist pedigree, the MSZP continued economic reforms and privatization, adopting a painful but necessary policy of fiscal austerity (the “Bokros plan”) in 1995. The government pursued a foreign policy of integration with Euro-Atlantic institutions and reconciliation with neighboring countries. But neither an invitation to join NATO nor improving economic indicators guaranteed the MSZP's re-election; dissatisfaction with the pace of economic recovery, rising crime, and cases of government corruption convinced voters to propel center-right parties into power following national elections in May 1998. The Federation of Young Democrats (renamed Fidesz-Hungarian Civic Party (MPP) in 1995) captured a plurality of parliamentary seats and forged a coalition with the Smallholders and the Democratic Forum. The new government, headed by 35-year-old Prime Minister Viktor Orban promised to stimulate faster growth, curb inflation, and lower taxes. Although the Orban administration also pledged continuity in foreign policy, and continued to pursue Euro-Atlantic integration as its first priority, it was a more vocal advocate of minority rights for ethnic Hungarians abroad than the previous government.

In April 2002, the country voted to return the MSZP-Free Democrat coalition to power. The new government, led by Prime Minister Peter Medgyessy, had a very slim majority in Parliament following the closest elections of the post-communist era. The Medgyessy government placed special emphasis on solidifying Hungary's Euro-Atlantic course, which culminated in Hungary's accession to the European Union on May 1, 2004. Prime Minister Medgyessy resigned in August 2004 after losing coalition support following an attempted cabinet reshuffle. Ferenc Gyurcsany was selected by the governing coalition to succeed Medgyessy, and he was confirmed by the Parliament on September 29, 2004.

In the April 2006 election Prime Minister Ferenc Gyurcsany and his Socialist-liberal coalition were reelected, the first time since communism that a sitting government has renewed its mandate. The current coalition between MSZP and SZDSZ makes up the parliamentary majority with 210 seats. However, it does not have the “super majority” to produce the two-thirds vote necessary to enact constitutional, legal, and procedural changes. The present configuration of Parliament includes MSZP with 190 seats, SZDSZ with 20 seats, Fidesz with 164 seats, MDF with 11 seats, and the independent Somogyert party with one seat. The Prime Minister has reduced the number of ministries in the cabinet from 17 to 12. The new cabinet has eight ministers from the MSZP party, three ministers from the SZDSZ party, and one independent minister.

GOVERNMENT AND POLITICAL CONDITIONS

The President of the Republic, elected by the National Assembly every 5 years, has a largely ceremonial role, but powers also include appointing the prime minister. The prime minister selects cabinet ministers and has the exclusive right to dismiss them. Each cabinet nominee appears before one or more parliamentary committees in consultative open hearings and must be formally approved by the president. The unicameral, 386-member National Assembly is the highest organ of state authority and initiates and approves legislation sponsored by the prime minister. A party must win at least 5% of the national vote to form a parliamentary faction. National parliamentary elections are held every 4 years (the last in April 2006). A 15-member Constitutional Court has power to challenge legislation on grounds of unconstitutionality.

Principal Government Officials

Last Updated: 2/1/2008

Pres.: Laszlo SOLYOM

Prime Min.: Ferenc GYURCSANY

Min. of Agriculture & Rural Development: Jozsef GRAF

Min. of Defense: Imre SZEKERES

Min. of Economics & Transportation: Csaba KAKOSY

Min. of Education & Culture: Istvan HILLER

Min. of Environmental Protection & Water Management: Gabor FODOR

Min. of Finance: Janos VERES

Min. of Foreign Affairs: Kinga GONCZ

Min. of Health: Agnes HORVATH

Min. of Justice & Law Enforcement: Albert TAKACS

Min. for Local Govt. & RegionalDevelopment: Gordon BAJNAI

Min. of Social Affairs & Labor: Monik LAMPERTH

Min. in Charge of the Prime Min.'s Office: Peter KISS

Min. Without Portfolio for the Secret Services: Gyorgy SZILVASY

Min. Without Portfolio for Public Admin.Reform: Tibor DRASKOVICS

Governor, National Bank of Hungary: Andras SIMOR

Ambassador to the US: Feren SOMOGYI

Permanent Representative to the UN, NewYork: Gabor BRODI

The Hungarian embassy is located at 3910 Shoemaker St. NW, Washington, DC 20008 (tel. 202-362-6730). Hungary has consulates in New York City and Los Angeles.

ECONOMY

The Hungarian economy prior to WWII was primarily oriented toward agriculture and small scale manufacturing. Hungary's strategic position in Europe and its relative lack of natural resources also have dictated a traditional reliance on foreign trade. In the early 1950s, the communist government forced rapid industrialization after the standard Stalinist pattern in an effort to encourage a more self-sufficient economy. Most economic activity was conducted by state-owned enterprises or cooperatives and state farms. In 1968, Stalinist self-sufficiency was replaced by the “New Economic Mechanism,” which reopened Hungary to foreign trade, gave limited freedom to the workings of the market, and allowed a limited number of small businesses to operate in the services sector.

Although Hungary enjoyed one of the most liberal and economically advanced economies of the former Eastern bloc, both agriculture and industry began to suffer from a lack of investment in the 1970s, and Hungary's net foreign debt rose significantly—from $1 billion in 1973 to $15 billion in 1993—due largely to consumer subsidies and unprofitable state enterprises. In the face of economic stagnation, Hungary opted to try further liberalization by passing a joint venture law, adopting an income tax, and joining the International Monetary Fund (IMF) and the World Bank. By 1988, Hungary had developed a two-tier banking system and had enacted significant corporate legislation which paved the way for the ambitious market-oriented reforms of the post-communist years.

The Antall government of 1990-94 began market reforms with price and trade liberation measures, a revamped tax system, and a nascent market-based banking system. By 1994, however, the costs of government overspending and hesitant privatization had become clearly visible. Cuts in consumer subsidies led to increases in the price of food, medicine, transportation services, and energy. Reduced exports to the former Soviet bloc and shrinking industrial output contributed to a sharp decline in GDP, falling 18% from 1990 to 1993.

Unemployment rose rapidly—to about 12% in 1993. The external debt burden, one of the highest in Europe, reached 250% of annual export earnings, while the budget and current account deficits approached 10% of GDP. In March 1995, the government of Prime Minister Gyula Horn implemented an austerity program, coupled with aggressive privatization of state-owned enterprises and an export-promoting exchange rate regime, to reduce indebtedness, cut the current account deficit, and shrink public spending. By the end of 1997 the consolidated public sector deficit decreased to 4.6% of GDP—with public sector spending falling from 62% of GDP to below 50%—the current account deficit was reduced to 2% of GDP, and government debt was paid down to 94% of annual export earnings.

These reforms and a massive infusion of foreign direct investment (FDI) set Hungary on a path of high growth, falling inflation, and decreasing unemployment. Growth has averaged 4.5% since 1996; inflation fell from 28% to under 7%; and unemployment fell to under 6%, the envy of many EU countries. Eighty percent of GDP is now produced by the private sector, and foreign owners control 70% of financial institutions, 66% of industry, 90% of telecommunications, and 50% of the trading sector. Hungary is now one of Europe's fastest-growing and most open economies, deeply integrated into the European economy, a relationship that was enhanced with Hungary's accession to the European Union on May 1, 2004.

The Orban government, elected in 1998, maintained the broad macroeconomic reforms of its predecessor. However, it did little to address structural problems in agriculture, health care, and the tax system. Under the slogan “economic patriotism,” the government moved to increase the government's role in the economy and switch from an export-to a domestic demand-driven economy. In 2002, the consolidated fiscal deficit doubled to 9.9% of GDP, in part due to overspending by the previous administration prior to the last national elections and by the new government after the elections. The Medgyessy government sought to lower the deficit while creating a business-friendly environment. A large wage increase and a strongly appreciating local currency in 2002-2003, however, decreased Hungary's competitiveness somewhat. Prime Minister Gyurc-sany appointed Finance Minister Veres in April 2005 and continues to focus on deficit reduction. As part of his economic reform plan, proposed in June 2006, Prime Minister Gyurc-sany vowed to attack Hungary's budget deficit, more than 10% of GDP in 2006, by raising taxes and combating waste in the public sector. The plan consists of austerity measures that involve cutting subsidies on gas, electricity, and medicines as well as a series of deep reforms in four key areas: healthcare, state administration, local government, and education. The Prime Minister aims to cut down on ministry staff by 23%. His goal is to cut the budget deficit to 6.6% of GDP in 2007, about 4% in 2008, and about 3% in 2009. Such reductions could put Hungary on the path to join the Euro zone by 2012, two years later than its original target. In 1995 Hungary's currency, the forint (HUF), became convertible for all current account transactions, and subsequent to OECD membership in 1996, for almost all capital account transactions as well. In 2001, the Orban government lifted remaining currency controls and broadened the band around the exchange rate, allowing the forint to appreciate by more than 12% in a year. Conflicting fiscal and monetary policy in the summer of 2002 caused confusion briefly in the market, with the forint surging against the Euro for several months. In attempts to reassure the market, the Medgyessy government repeatedly said the country would join the ERM II as soon as possible, with hopes of adopting the Euro by 2008. Prior to the change of regime in 1989, 65% of Hungary's trade was with Comecon countries.

By the end of 1997, Hungary had shifted much of its trade to the West. Trade with EU countries and the OECD now comprises over 75% and 85% of the total, respectively. Germany is Hungary's single-most important trading partner. The United States has become Hungary's sixth-largest export market, while Hungary is ranked as the 72d largest export market for the United States. Bilateral trade between the two countries increased 46% in 1997 to more than $1 billion. The United States has Normal Trade Relations with Hungary and has extended to it Overseas Private Investment Corporation insurance, and access to the Export/ Import Bank.

Foreign investment was the key to Hungary's success. With more than $60 billion in FDI since 1989, Hungary has been a leading destination for FDI in central and eastern Europe—including the former Soviet Union. Of this, a little less than one-third has come from U.S. companies. The largest U.S. investors include GE, Alcoa, General Motors, Coca-Cola, Ford, IBM, and Pepsico. Foreign companies modernized Hungary's industrial sector and created thousands of new, high-skilled, high-paying jobs. As a result of extensive and continuing liberalization, the private sector produces about 80% of Hungary's output. Currently, foreign firms control two-thirds of manufacturing, 90% of telecommunications, and 60% of the energy sector. Inflation declined from 14% in 1998 to 3.7% in 2005. Policy challenges include cutting the public sector deficit to 3% of GDP by 2008, from about 6.5% in 2005, and orchestrating an orderly interest rate reduction without sparking capital outflows.

NATIONAL SECURITY

Hungary's key national security focus since joining NATO in 1999 has been contributing to the stability of the region while integrating its armed forces into NATO's force structure. As a “NATO island” in an area of instability, Hungary takes a keen interest in NATO expansion and in the transatlantic link. It shares a more acute sense of the threat than many other European countries and is watching the transition in the Balkans, Ukraine, and Russia with great interest. Hungarians believe that Hungary's own security and that of its ethnic minorities in neighboring countries will be best served by a peaceful, unified region, which will be achieved when EU and NATO membership is extended to the entire region.

Hungary has been slowly modernizing and downsizing its armed forces since it left the Warsaw Pact in 1990. The transition from a heavy, slow-moving Warsaw Pact force to a lighter, versatile NATO force has been a long road, and U.S. advisers have been involved in the process throughout. The force has gone from 130,000 in 1989 to 45,000 in 2001 while dozens of bases have been closed. New training, logistics, and leadership systems have been implemented, while considerable practical experience working with NATO and other forces has been achieved by Hungarians serving in peacekeeping missions (about 1,000 at any given time). Hungary was especially helpful during the Kosovo crisis in 1995, when its airbase at Taszar was used by coalition aircraft. Hungarian military personnel are also present in Afghanistan and Iraq. Hungary spends 1.2% of its GDP on defense, well below the NATO target of 2% and spending levels of other new members.

FOREIGN RELATIONS

Except for the short-lived neutrality declared by Imre Nagy in November 1956, Hungary's foreign policy generally followed the Soviet lead from 1947 to 1989. During the communist period, Hungary maintained treaties of friendship, cooperation, and mutual assistance with the Soviet Union, Poland, Czechoslovakia, the German Democratic Republic, Romania, and Bulgaria. It was one of the founding members of the Soviet-led Warsaw Pact and Comecon, and it was the first central European country to withdraw from those organizations, now defunct.

As with any country, Hungarian security attitudes are shaped largely by history and geography. For Hungary, this is a history of more than 400 years of domination by great powers—the Ottomans, the Habsburgs, the Germans during World War II, and the Soviets during the Cold War—and a geography of regional instability and separation from Hungarian minorities living in neighboring countries. Hungary's foreign policy priorities, largely consistent since 1990, represent a direct response to these factors. Since 1990, Hungary's top foreign policy goal has been achieving integration into Western economic and security organizations. To this end, Hungary joined NATO in 1999 and the European Union in May of 2004. Hungary also has improved its often-chilled neighborly relations by signing basic treaties with Romania, Slovakia, and Ukraine. These renounce all outstanding territorial claims and lay the foundation for constructive relations. However, the issue of ethnic Hungarian minority rights in Slovakia and Romania periodically causes bilateral tensions to flare. Hungary was a signatory to the Helsinki Final Act in 1975, has signed all of the CSCE/OSCE follow-on documents since 1989, and served as the OSCE's Chairman-in-Office in 1997. Hungary's record of implementing CSCE Helsinki Final Act provisions, including those on reunification of divided families, remains among the best in eastern Europe. Hungary has been a member of the United Nations since December 1955.

U.S.-HUNGARIAN RELATIONS

Relations between the United States and Hungary following World War II were affected by the Soviet armed forces’ occupation of Hungary. Full diplomatic relations were established at the legation level on October 12, 1945, before the signing of the Hungarian peace treaty on February 10, 1947. After the communist takeover in 1947-48, relations with Hungary became increasingly strained by the nationalization of U.S.-owned property, unacceptable treatment of U.S. citizens and personnel, and restrictions on the operations of the American legation. Though relations deteriorated further after the suppression of the Hungarian national uprising in 1956, an exchange of ambassadors in 1966 inaugurated an era of improving relations. In 1972, a consular convention was concluded to provide consular protection to U.S. citizens in Hungary. In 1973, a bilateral agreement was reached under which Hungary settled the nationalization claims of American citizens. In January 1978, the United States returned to the people of Hungary the historic Crown of Saint Stephen, which had been safeguarded by the United States since the end of World War II. Symbolically and actually, this event marked the beginning of excellent relations between the two countries. A 1978 bilateral trade agreement included extension of most-favored-nation status to Hungary. Cultural and scientific exchanges were expanded. As Hungary began to pull away from the Soviet orbit, the United States offered assistance and expertise to help establish a constitution, a democratic political system, and a plan for a free market economy. Between 1989 and 1993, the Support for East European Democracy (SEED) Act provided more than $136 million for economic restructuring and private sector development.

The Hungarian-American Enterprise Fund has offered loans, equity capital, and technical assistance to promote private-sector development. The U.S. Government has provided expert and financial assistance for the development of modern and Western institutions in many policy areas, including national security, law enforcement, free media, environmental regulations, education, and health care. Direct investment in Hungary by American companies is rising rapidly. When Hungary acceded to NATO in April 1999, it became a formal ally of the United States. This move has been consistently supported by the 1.5 million-strong Hungarian-American community.

Principal U.S. Embassy Officials

Last Updated: 2/19/2008

BUDAPEST (E) 1054 BudapEST Szabadsag Ter 12 Hungary, APO/ FPO UNIT 5270 Box 40, DPO AE 09731-0040, 36-1-475-4400, Fax 36-1-475-4520 (ADMIN), Workweek: Mon–Fri; 8:00AM-5:00PM, Website: http://www.usembassy.hu.

TRAVEL

Consular Information Sheet

August 23, 2007

Country Description: Hungary is a stable democracy with a market economy. Tourist facilities outside Budapest are widely available, if not as developed as those found in Western Europe. Visitors considering a trip are encouraged to read the Embassy's consular web site at http://budapest.usembassy.gov.

Entry Requirements: A passport is required. American citizens do not need a visa to travel to Hungary for business or pleasure for up to 90 days. That 90-day period begins with entry to any of the “Schengen group” countries: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Slovakia, Spain, and Sweden. Multiple visits to Schengen countries may not exceed 90 days in any 6 month period. If you plan to reside or study in Hungary for a period of more than ninety days, a visa must be obtained from the Embassy of the Republic of Hungary at 3910 Shoemaker Street NW, Washington, DC 20008, telephone (202) 362-6730. Internet address: http://www.huemb-was.org, or the nearest Hungarian Consulate in Los Angeles or New York.

Note: Although European Union regulations require that non-EU visitors obtain a stamp in their passport upon initial entry to a Schengen country, many borders are not staffed with officers carrying out this function. If an American citizen wishes to ensure that his or her entry is properly documented, it may be necessary to request a stamp at an official point of entry. Under local law, travelers without a stamp in their passport may be questioned and asked to document the length of their stay in Schengen countries at the time of departure or at any other point during their visit, and could face possible fines or other repercussions if unable to do so.

Safety and Security: Prior police approval is required for public demonstrations in Hungary and police oversight is routinely provided to ensure adequate security for participants and passersby. Nonetheless, situations may develop which could pose a threat to public safety. U.S. citizens are advised to avoid areas in which public demonstrations are taking place.

For the latest security information, Americans traveling abroad should regularly monitor the Department's Internet web site at http://travel.state.gov/, where the current Worldwide Caution Travel Alert, Travel Warnings and Travel Alerts can be found. Up to date information on security can also be obtained by calling 1-888-407-4747 toll free in the U.S., or, for callers outside the U.S. and Canada, a regular toll line at 1-202-501-4444. These numbers are available from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday (except U.S. federal holidays.

Crime: Hungary has a low rate of violent crime. However, street crime occasionally involving violence has been reported, especially near major hotels and restaurants and on public transportation. Theft of passports, currency and credit cards is a frequent problem, especially in train stations and on public transportation. The U.S. Embassy's Consular Section offers an informational brochure for tourists in Hungary, including a section on crimes and scams that have been encountered by other tourists. To consult the advisory, please visit the Embassy's consular web site at http://budapest.usembassy.gov/tourist_advisory.html.

Drivers should be cautious when stopping at gas stations and highway parking lots, or fixing flat tires or other mechanical problems, especially at night. There have been reports of scams perpetrated on unwitting victims while traveling the highways. One reported scam involves someone who attracts the driver's attention by saying that there is something wrong with his/ her car (e.g. a smoking hood or flat tire) in order to encourage the driver to pull over to the side of the road. Once pulled over, the people participating in the scam will remove purses, passports, etc., from the car and drive away. Luggage and valuables should not be left unattended inside any vehicle.

A common scam involves young women asking foreign men to buy them drinks. When the bill arrives the drinks cost hundreds of dollars each. Americans should avoid bars and restaurants promoted by cab drivers or people on the street. Every bar and restaurant should provide a menu with prices before ordering.

In many countries around the world, counterfeit and pirated goods are widely available. Transactions involving such products may be illegal under local law. In addition, bringing them back to the United States may result in forfeitures and/ or fines. More information on this serious problem is available at http://www.cybercrime.gov/18usc2320.htm.

Information for Victims of Crime: The loss or theft abroad of a U.S. passport should be reported immediately to the local police and the nearest U.S. Embassy or Consulate. If you are the victim of a crime while overseas, in addition to reporting to local police, please contact the nearest U.S. Embassy or Consulate for assistance. The Embassy or Consulate staff can, for example, assist you to find appropriate medical care, to contact family members or friends and explain how funds could be transferred. Although the investigation and prosecution of the crime is solely the responsibility of local authorities, consular officers can help you to understand the local criminal justice process and to find an attorney if needed. Tourists who become victims of a crime in Hungary are strongly encouraged to call a 24-hour multilingual crime reporting telephone number. The number from 8 a.m. to 8 p.m. is 01-438-8080; from 8 p.m. to 8 a.m., the number is 06-80660044. There is also a 24-hour police Tourist Information office that provides service in English and German and is located in one of downtown Budapest's busiest tourist area: Vigado Utca 6, 1051 Budapest.

Medical Facilities and Health Information: Medical treatment in Hungary is adequate, but hospital facilities and nursing support are not comparable to those in the United States. Physicians are generally well trained, but there is a lack of adequate emergency services. Some doctors, particularly in Budapest, speak English. Doctors and hospitals usually expect immediate cash payment for health services. Information on vaccinations and other health precautions, such as safe food and water precautions and insect bite protection, may be obtained from the Centers for Disease Control and Prevention's hotline for international travelers at 1-877FYI-TRIP (1-877-394-8747) or via the CDC's Internet site at http://wwwn.cdc.gov/travel. For information about outbreaks of infectious diseases abroad consult the World Health Organization's (WHO) web site at http://www.who.int/en. Further health information for travelers is available at http://www.who.int/ith.

Medical Insurance: The Department of State strongly urges Americans to consult with their medical insurance company prior to traveling abroad to confirm whether their policy applies overseas and whether it will cover emergency expenses such as a medical evacuation.

Traffic Safety and Road Conditions: While in a foreign country, U.S. citizens may encounter road conditions that differ significantly from those in the United States. The information below concerning the Hungary is provided for general reference only, and may not be totally accurate in a particular location or circumstance. In Hungary, fatal traffic accidents number approximately 1,200 per year, with about 7,000 traffic accidents per year resulting in serious injuries. While this may seem low compared to the Untied States, Hungary has a much higher rate of accidents per miles driven. Americans should drive with caution and always be alert for other vehicles that may be violating traffic laws. Road travel is more dangerous during the Christmas season, summer months, and at night. Roadside assistance, including medical and other services, is generally available. English is usually spoken at the emergency numbers listed below. In case English is not spoken, dial 112.

Ambulance: 104 or 350-0388
Police: 107
Fire: 105
24-hour English speaker: 112
Bus, train and taxi services are readily available for inter-city travel.

Hungarian motorways and highways are generally in good condition. Urban roads and road maintenance are also good although areas under construction are not always adequately marked or blockaded. In Budapest, many roads are often under construction. In rural areas, however, roads are often narrow, badly lit, and can be in a state of poor repair in some areas. Pedestrians, agricultural machinery, and farm animals often use these small rural roads. This requires increased caution on the part of drivers. Additional information on road conditions is available from “Utinform” at phone number (38)(1)336-2400.

Hungary has a policy of zero tolerance for driving under the influence of alcohol. Police often conduct routine roadside checks where breath-analyzer tests are administered. Persons found to be driving while intoxicated face jail and/or fines. Possible penalties for a car accident involving injury or death are one to five years in prison. Police have instituted a widespread practice of stopping vehicles, particularly in Budapest, to check driver identity documents in a search for illegal aliens and residents in Hungary, and to check vehicle registration and fitness documentation. It is against the law to use a handheld cell phone while driving anywhere in Hungary. Hungary recognizes international driver's permits (IDP) issued by the American Automobile Association (AAA) and the American Automobile Touring Alliance when presented in conjunction with a state driver's license. American driver's licenses will be accepted in Hungary for one year after arrival provided that a certified Hungarian translation has been attached to the license. Those with IDPs do not need to have the license translated, but must present both IDP and state driver's license together. After one year in Hungary, U.S. citizens must obtain a Hungarian driver's license. For further information on this procedure visit our website at http://budapest.usembassy.gov.

The speed limit for cars and motorcycles on the motorway is 130 km per hour (approximately 80 mph); on highways, the limit is 110 km per hour (approximately 65 mph); and in town and village areas, the speed limit is 50 km per hour (approximately 30 mph). Many drivers, however, do not observe the speed limits, and extra care should be taken on two-way roads. Special seats are required for infants. Children under age 12 may not sit in the front seat of an automobile. Seats belts are mandatory for everyone in the car. Unless another instruction sign is displayed, yielding the right of way to cars approaching from the right is the general rule. Turning right on a red light is prohibited. The police write up tickets for traffic violations thus documenting the infraction and any applicable fine(s). The police will give the offender a postal check (money order) on which the amount of the fine to be paid is written, and this postal check may be presented and paid for at any Hungarian post office. Sometimes in disputes about fines or the offense, the police will confiscate the person's passport and issue a receipt for the passport with an “invitation letter” to appear at the police station the ext day or day after to resolve the dispute. The passport is returned after the resolution and/or the payment of the fine. For specific information about Hungarian driver's permits, vehicle inspection, road taxes and mandatory insurance, contact the Hungarian National Tourist Organization Office in New York via the internet at http://www.gotohungary.com.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Government of Hungary's Civil Aviation Authority as being in compliance with International Civil Aviation Organization (ICAO) aviation safety standards for oversight of Hungary's air carrier operations. For more information, travelers may visit the FAA's Internet web site at http://www.faa.gov.

Special Circumstances: The acceptance of traveler's checks is not universal in Hungary. The presence of ATMs is increasing in Budapest and other major cities. Hungary's custom authorities may enforce strict regulations concerning temporary importation into or export from Hungary of items such as firearms, antiquities, and prescription medications. It is advisable to contact the Embassy of Hungary in Washington or one of Hungary's consulates in the United States for specific information regarding customs requirements.

Criminal Penalties: While in a foreign country, a U.S. citizen is subject to that country's laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Hungarian laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Hungary are strict and convicted offenders can expect jail sentences and heavy fines. Engaging in illicit sexual conduct with children or using or disseminating child pornography in a foreign country is a crime, prosecutable in the United States.

Children's Issues: For information on international adoption of children and international parental child abduction, see the Office of Children's Issues website at http://travel.state.gov/family.

Registration and Embassy and Consulate Locations: Americans living in Hungary are encouraged to register with the nearest U.S. Embassy of Consulate through the State Department's travel registration web site, https://travelregistra-tion.state.gov/ibrs/ui/, and to obtain updated information on travel and security within Hungary. Americans without Internet access may register directly with the nearest U.S. Embassy or Consulate. By registering, American citizens make it easier for the Embassy or Consulate to contact them in case of emergency. The U.S. Embassy in Budapest is located at 1054 Budapest, Szabadsag Ter 12; telephone (36)(1) 475-4703 or (36)(1) 475-4929. The Consular Section's fax is (36)(1) 475-4188 or (36)(1) 475-4113, and the Consular Section's web site is located at http://hungary.usembassy.gov.

International Adoption

April 2006

The information in this section has been edited from a report of the State Department Bureau of Consular Affairs, Office of Overseas Citizens Services. For more information, please read the International Adoption section of this book and review current reports online at http://travel.state.gov/family.

Disclaimer: The information in this flyer relating to the legal requirements of specific foreign countries is based on public sources and current understanding. Questions involving foreign and U.S. immigration laws and legal interpretation should be addressed respectively to qualified foreign or U.S. legal counsel.

Patterns of Immigration: Please review current reports online at http://travel.state.gov/family.

Adoption Authority: Ministry for Youth, Family and Social Affairs, and Equal Opportunity; Department of Family and Guardianship Matters (Ifjusagi, Csaladugyi, Szocialis és Eselyegyenlosegi Miniszterium, Csaladjogi és Gyamugyi Osztaly); Address: 1054 Budapest, Akademia u. 3.; Phone: (36-1) 475-5788 or (36-1) 475-7983.

Eligibility Requirements for Adoptive Parents: Hungarian law does not specify an age limit for adoptive parents, but Hungarian authorities require that one of the adoptive parents be under age 45. Hungarian law permits single people to adopt; however, Hungarian authorities may deny an adoption based on the strongly held opinion that a child be raised in by a married couple in a traditional family. According to the Ministry of Youth, Family and Social Affairs, adoptions are approved based on the submitted documents and a detailed study of the case. An adoption may be denied because of the age, marital status or other circumstances of the adoptive parents.

Residency Requirements: There are no residency requirements for prospective adoptive parents. However, once a child has been identified, the prospective parents will have to travel to Hungary to meet the child and, if they decide to proceed with the adoption, remain in Hungary for up to six weeks.

Time Frame: After receiving the prospective adoptive parents’ application, the adoption authorities have 15 days to notify adoptive parents whether they have been approved to adopt in Hungary. Parents have 60 days to submit required documents. After prospective adoptive parents arrive to meet their child, it takes four to six weeks to complete the adoption.

Adoption Agencies and Attorneys: There are no officially accredited international adoption agencies in Hungary. However, there are U.S. adoption agencies registered with the Ministry of Youth, Family and Social Affairs. Local authorities prefer to work with the registered and known agencies. Prospective adoptive parents must work directly with the Child and Youth Protection Institute (GYIVI) in the Hungarian county where the child is residing. The Embassy usually advises adoptive parents to seek the assistance of a U.S. adoption agency or a lawyer with experience in intercountry adoptions from Hungary if no friends or relatives are available to help in Hungary in the complex adoption process. Please contact the Ministry of Youth, Family and Social Affairs for information on which U.S. adoption agencies are authorized to work in Hungary.

Adoption Fees: Although there are no fees for the adoption itself, other expenses of obtaining documents and translations, and lawyers’ fees, if any, can be high. For a translation of one page a translator may collect from $40 to $140. The U.S. Embassy in Budapest is not familiar with what Hungarian attorneys charges for adoption related services.

Adoption Procedures: People who are interested in adopting children in Hungary should send their requests (a letter expressing the intention to adopt a Hungarian child) to:

Ministry for Youth, Family and Social Affairs, and Equal
Opportunity
(Ifjusági, Családügyi, Szociális és
Esélyegyenlõségi Minisztérium)
Akademia u. 3
Budapest 5th District
(36-1) 475-5788 or (36-1) 475-7983.

Adoption requests can also be submitted through a Hungarian Consulate abroad. Please note, however, that the Consulate is required to forward the request to Budapest. Once a request for adoption is received, the adoption center has fifteen days to send the parents are sent an information packet about the necessary documents they must submit and adoption procedures. If the prospective parents fail to present the required documents within sixty days, the adoption center considers the request to adopt abandoned. Once the necessary documents are submitted, the adoption center will forward notification of registration to the adoptive parents. The documents are forwarded to the appropriate county Child and Youth Protection Institute (GYIVI). The county GYIVI will schedule an appointment for the prospective parents to travel to Hungary to meet the child. If, after meeting the child with whom they have been matched, the prospective adoptive parents agree to adopt this child, the GYIVI forwards all the documents with a recommendation to the Guardianship Office in the county where the child resides. This office has legal authority to adjudicate (approve or deny) all adoption requests. Once the final adoption decree is issued, the child must be re-registered at the birth registry of his/her place of birth. When the new birth certificate is issued, the adoptive parents submit a Hungarian passport application on behalf of the child. The adoptive parents must be prepared to stay in Hungary during the adoption process, which may take 3–6 weeks, including the passport application. If, after meeting the child with whom they have been initially matched, the prospective adoptive parents do not wish to adopt that child, the GYIVI returns their documents to the adoption center in Budapest for further consideration. The prospective adoptive parents’ application remains valid for two years, after which time the entire registration process must be repeated.

Required Documents: In order to be placed on the national register of adoptive parents, the following documents must be submitted upon receipt of the information packet.

• Home study performed by a U.S. licensed agency or a social worker;
• Proof of income;
• Psychological evaluation of adoptive parents by a psychologist;
• Notification of I-600A approval from U.S. Citizenship and Immigration Services;
• Evidence of citizenship;
• Statement of prospective adoptive parents regarding motivation for adoption and expectations about the child (separate from the original letter of intent);
• Prospective adoptive parents’ statements consenting to their registration on the national register;
• Certified copy of license of adoption agency, if applicable.

All of the documents must be original or certified copies issued within the last year, and must be accompanied by Hungarian translations authenticated by Hungarian consular officials abroad or certified translators in Hungary.

Embassy of Hungary
3910 Shoemaker Street, N.W.
Washington, D.C. 20008
Telephone (202) 362-6730
E-mail: [email protected]
http://www.hungaryemb.org

Hungary also has consulates in Los Angeles and New York.

U.S. Immigration Requirements: Prospective adopting parents are strongly encouraged to consult USCIS publication M-249, The Immigration of Adopted and Prospective Adoptive Children, as well as the Department of State publication, International Adoptions.

Please see the International Adoption section of this book for more details and review current reports online at http://travel.state.gov/family.

U.S. Embassy of Budapest
1054 Budapest, Szabadsag ter 12
Budapest V, Hungary
Tel: 011-36-1-475-4400
Fax: 011-36-1-475-4188/4113
Email: [email protected]
http://budapest.usembassy.gov

Additional Information: Specific questions about intercountry adoption in Hungary may be addressed to the U.S. Embassy in Budapest. General questions regarding intercountry adoption may be addressed to the Office of Children's Issues, U.S. Department of State, CA/OCS/CI, SA-29, 4th Floor, 2201 C Street, NW, Washington, D.C. 20520-4818, toll-free Tel: 1-888-407-4747.