History of Hungary and the European Union

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The Effects on Hungary as a New Member Nation in the European Union

Team 5

Paul Davis
Gulizar Halis
Kristin Hanlon
Alyson Heller

Overview/History of Hungary and the European Union
The nation of Hungary is a country that has come a long way in a short period of time. In the years since the fall of communism in 1989 in this country, Hungary has managed to establish an extremely prosperous economy and population. Because of this, Hungary has developed into one of Eastern Europe¡¯s most attractive business environments. ¡°The level of political, structural and economic stability it has achieved demonstrates the success of its transition into a modern market economy. ¡± This stability has allowed for Hungary to become a member of numerous international organizations, such as the OECD, NATO, and most recently the European Union in May 2004. Hungary¡¯s membership in the EU, although short so far, has brought about many changes in the nation, both positive and negative. The nation has always served as a crossroads that connects Eastern Europe to Western Europe, and this coupled with EU membership will only allow Hungary¡¯s economy to grow more. The Eastern European nation of Hungary has a population of a little more than 10.2 million people with about 2.5 million, or 25% of the country's population, living in and around the capital city of Budapest. Hungary¡¯s populace is made up of mostly Hungarians with ethnic minorities of Romanians, Germans, Serbs, and Slovaks. The nation is mostly Catholic with minority religions of Calvinism, Lutheran, and other religions. The life expectancy for the total population is 72.25 years and the literacy rate is very high, with 99.5% of the total population able to read and write, which demonstrates the exceptional educational system in this country. The nation has well-established transportation, communication, banking, insurance, accounting, and legal systems. All of this allows for a prosperous nation. For centuries Hungary had been part of the Holy Roman Empire under the rule of the Hapsburg monarchy. This was until the monarchy was overthrown during WWI and Hungary became a democratic republic; however political and social unrest continued for many years, with the government returning to a monarchy at the end of WWI. The nation also lost two-thirds of its territory as part of the unfair peace settlements following this war. This coupled with economic distress provided ¡°incentive for resurgent Hungarian nationalism. ¡± After World War II, Hungary became a republic once again and held democratic elections after which a coalition government was formed. However, the Hungarian Communist Party, supported by the Soviet army, did not accept the results and overthrew the lawful government and assumed power. Communist policies were implemented in the nation, including the collectivization of agriculture, forced development of heavy industry, and rigid central planning, all of which ruined the economy within a few years. Hungary also joined the USSR and other Eastern European Communist countries in forming the Warsaw Pact. In 1956, a revolt broke out against the communist government. This was at first successful, but then the Soviet army put down the rebellion and did so for any other revolts that followed in the years to come. As inflation grew, as the standard of living became lower, and as the economic condition of the country worsened, strong opposition to the government began to grow. Slowly over the years, the government began to ease their strict policies and allowed the economy to partly operate according to free market forces. In the summer of 1989, negotiations took place between the representatives of the government and the parties of the opposition concerning the creation of the political and legal conditions for peaceful transition and the creation of the democratic rule of law with a multiparty system. The government began to ease restrictions on...
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