This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources in this article. Unsourced material may be challenged and removed. Find sources: "End of communism in Hungary" – news · newspapers · books · scholar · JSTOR (May 2011) (Learn how and when to remove this message)

You can help expand this article with text translated from the corresponding article in Hungarian. (June 2013) Click [show] for important translation instructions. View a machine-translated version of the Hungarian article. Machine translation, like DeepL or Google Translate, is a useful starting point for translations, but translators must revise errors as necessary and confirm that the translation is accurate, rather than simply copy-pasting machine-translated text into the English Wikipedia. Do not translate text that appears unreliable or low-quality. If possible, verify the text with references provided in the foreign-language article. You must provide copyright attribution in the edit summary accompanying your translation by providing an interlanguage link to the source of your translation. A model attribution edit summary is Content in this edit is translated from the existing Hungarian Wikipedia article at [[:hu:Rendszerváltás Magyarországon]]; see its history for attribution. You may also add the template {{Translated|hu|Rendszerváltás Magyarországon}} to the talk page. For more guidance, see Wikipedia:Translation.

Fall of communism in Hungary

Part of the Revolutions of 1989
The reburial of Imre Nagy and other prominent figures of the 1956 Hungarian Revolution on June 16, 1989, in Heroes' Square, Budapest
Date	22 May 1988 – 2 May 1990 (1988-05-22 – 1990-05-02)
Location	Hungary
Participants	Dissident movements (primarily SZDSZ, MDF, and Fidesz) MSZMP reformers
Outcome	End of the Marxist-Leninist single-party state in Hungary End of the Hungarian People's Republic and proclamation of the Third Hungarian Republic on 23 October 1989 Implementation of a multi-party liberal democracy Free elections held in March–April 1990 Dismantling of the planned economy and implementation of a free market system Rehabilitation of the memory of the 1956 Revolution

Communist rule in the People's Republic of Hungary came to an end in 1989 by a peaceful transition to a democratic system. After the Hungarian Revolution of 1956 was suppressed by Soviet forces, Hungary remained a communist country. As the Soviet Union weakened at the end of the 1980s, the Eastern Bloc disintegrated.

The events in Hungary were part of the Revolutions of 1989, known in Hungarian as the Rendszerváltás (lit. 'system change' or 'change of regime').

Decades before the Round Table Talks, political and economic forces within Hungary put pressure on Hungarian communism. These pressures contributed to the fall of socialism 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.^[1] Despite this, it became the weakest point of Hungarian communism, and a pressure that contributed greatly to the transition 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.^[2] 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.^[3]

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.^[4] 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 socialism in Hungary.^{[citation needed]}

In 1988, socialist 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 socialist countries, to go to Hungary and escape to West Germany through Austria, never again to return to 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.^[5] This reflected Hungary's general attitude towards the Soviet 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.^[6] The imposition of order through military force was also out of the question. Imre Pozsgay told the MSZMP'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."^[7]

The Hungarian communist elite 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.^{[citation needed]} 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, while only 13% believed that Hungarians were better off.^[8]

Nevertheless, after 1968 formed an illegal group of thinkers and activists, the so-called Democratic Opposition [hu]) which loosely connected to the Budapest School. They were heavily observed and oppressed by the regime though later they played an important role during the changes.

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 MSZMP, 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 socialism in Hungary.^{[citation needed]}

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 (MSZMP) on 22 May 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.^[9] 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. ^{[citation needed]}

In October 1989, the MSZMP 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 a package of nearly 100 constitutional amendments 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 for Mátyás Szűrös, provisional President, from balcony of Hungarian Parliament Building.^[10]

The first free parliamentary election, held in May 1990, was a plebiscite of sorts on the communist past. The revitalized and reformed socialists 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).

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. 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.

On 16 March 1999, Hungary joined NATO and on 1 May 2004, along with the other Visegrad countries, it joined the European Union, strengthening its ties with Western European countries and the United States. In April 2011, a new constitution was adopted which came into force on 1 January 2012.