People ' s Republic of Hungary The People ' s Republic of Hungary or Hungarian People ' s Republic ( ) was the official state name of Hungary from 1949 to 1989 during its Communist period under the guidance of the Soviet Union . The state remained in existence until 1989 when opposition forces consolidated in forcing the regime to abandon the struggle for communism . The state considered itself the heir of the Hungarian Soviet Republic , which was formed in 1919 and was the second socialist state formed after Soviet Russia . Formation . Following the liberation of Hungary from Nazi Germany by the Red Army , Soviet military occupation ensued . After seizing most material assets from German hands , the Soviets tried and managed , to a certain extent , to control Hungarian political affairs . By coercion through force , when the Red Army set up police organs to persecute the opposition , assuming this would enable the Soviet Union to seize the upcoming elections , to intense communist propaganda in an attempt to legitimize their rule . The Hungarian Communist Party , despite all the efforts , was trounced , receiving only 17 % of votes , by a Smallholder - led coalition under Prime Minister Zoltán Tildy , thus frustrating the Kremlin ' s expectations of ruling through a democratically elected government . The Soviet Union , however , intervened through force once again , resulting in a puppet government that disregarded Tildy , placed communists in important ministerial positions , and imposed several restrictive measures , like banning the victorious coalition government and forcing it to yield the Interior Ministry to a nominee of the Hungarian Communist Party . Communist Interior Minister László Rajk established the ÁVH secret police , in an effort to suppress political opposition through intimidation , false accusations , imprisonment and torture . In early 1947 , the Soviet Union pressed the leader of the Hungarian Communists , Mátyás Rákosi , to take a " line of more pronounced class struggle . " Rákosi complied by pressuring the other parties to push out those members not willing to do the Communists ' bidding , ostensibly because they were " fascists . " Later on , after the Communists won full power , he referred to this practice as " salami tactics . " Prime Minister Ferenc Nagy was forced to resign as prime minister in favour of a more pliant Smallholder , Lajos Dinnyés . In the elections held that year , the Communists became the largest party , but were well short of a majority . The coalition was retained with Dinnyés as prime minister . However , by this time most of the other parties ' more courageous members had been pushed out , leaving them in the hands of fellow traveler s . Having emasculated most of the other parties , the Communists spent the next year and a half consolidating their hold on power . This culminated in the second half of 1948 . In June , the Communists forced the Social Democrats to merge with them to form the Hungarian Working People ' s Party . Rákosi then forced Tildy to turn over the presidency to Social Democrat - turned - Communist Árpád Szakasits . In December , Dinnyés was replaced by the leader of the Smallholders ' left wing , the openly pro - Communist István Dobi . The process was more or less completed with the elections of May 1949 . Voters were presented with a single list of all parties , running on a common programme . On August 18 , the newly elected National Assembly passed a new constitution — a near - carbon copy of the Soviet Constitution . When it was officially promulgated on August 20 , the country was renamed the People ' s Republic of Hungary . The same political dynamics continued through the years , with the Soviet Union pressing and maneuvering Hungarian politics through the Hungarian Communist Party , intervening whenever it needed to , through military coercion and covert operations . Rajk ( who was later executed ) called it " a dictatorship of the proletariat without the Soviet form " called a " people ' s democracy . " Hungary stayed that way until the late 1980s , when turmoil broke out across the Eastern Bloc , culminating with the fall of the Berlin Wall and the Soviet Union ' s dissolution . History . Stalinist era ( 1949 – 1956 ) . Mátyás Rákosi , the new leader of Hungary , demanded complete obedience from fellow members of the Hungarian Working People ' s Party . Rákosi ' s main rival for power was László Rajk , who was then Hungary ' s Foreign Secretary . Rajk was arrested and Stalin ' s NKVD emissary coordinated with Hungarian General Secretary Rákosi and his ÁVH secret police to lead the way for the show trial of Rajk . At the September 1949 trial , Rajk made a forced confession , claiming that he had been an agent of Miklós Horthy , Leon Trotsky , Josip Broz Tito and Western imperialism . He also admitted that he had taken part in a murder plot against Mátyás Rákosi and Ernő Gerő . Rajk was found guilty and executed . Despite their helping Rákosi to liquidate Rajk , future Hungarian leader János Kádár and other dissidents were also purged from the party during this period . During Kádár ' s interrogation , the ÁVH beat him , smeared him with mercury to prevent his skin pores from breathing , and had his questioner urinate into his pried - open mouth . Rákosi thereafter imposed authoritarian rule on Hungary . At the height of his rule , Rákosi developed a strong cult of personality . Dubbed the " bald murderer " , Rákosi imitated Stalinist political and economic programs , resulting in Hungary experiencing one of the harshest dictatorships in Europe . He described himself as " Stalin ' s best Hungarian disciple " and " Stalin ' s best pupil " . Repression was harsher in Hungary than in the other satellite countries in the 1940s and 1950s due to a more vehement Hungarian resistance . Approximately 350 , 000 Hungarian officials and intellectual party members were purge d from the Hungarian Communist Party from 1948 to 1956 . Any member with a western connection was immediately vulnerable , which included large numbers of people who had spent years in exile in the West during the Nazi occupation of Hungary . Approximately 150 , 000 were also imprisoned , with 2 , 000 summarily executed . Additionally , during " social purges " of non - party members , in Budapest at 2 : 00 AM on Mondays , Wednesdays , and Fridays vans transported purge targets , who by 1953 , numbered approximately 700 , 000 . Of those 98 , 000 were branded as spies and saboteurs , 5 , 000 of which were executed . These social purges used immense amounts of resources , including almost one million Hungarian adults employed to record , control , calculate , indoctrinate , spy on and sometimes kill targets of the purge . Rákosi rapidly expanded the education system in Hungary . This was mostly in attempt to replace the educated class of the past by what Rákosi called a new " working intelligentsia " . In addition to some beneficial effects such as better education for the poor , more opportunities for working class children and increased literacy in general , this measure also included the dissemination of communist ideology in schools and universities . Also , as part of an effort to separate the Church from the State , religious instruction was denounced as propaganda and was gradually eliminated from schools . The government collectivized agriculture and it extracted profits from the country ' s farms to finance rapid expansion of heavy industry , which attracted more than 90 % of total industrial investment . At first Hungary concentrated on producing primarily the same assortment of goods it had produced before the war , including locomotives and railroad cars . Despite its poor resource base and its favorable opportunities to specialize in other forms of production , Hungary developed new heavy industry in order to bolster further domestic growth and produce exports to pay for raw - material import . Cardinal József Mindszenty , who had opposed the German Nazis and the Hungarian Fascists during the Second World War , was arrested in December 1948 and accused of treason . After five weeks under arrest , he confessed to the charges made against him and he was condemned to life imprisonment . The protestant churches were also purged and their leaders were replaced by those willing to remain loyal to Rákosi ' s government . The new Hungarian military hastily staged public , pre - arranged trials to purge " Nazi remnants and imperialist saboteurs " . Several officers were sentenced to death and executed in 1951 , including Lajos Tóth , a 28 victory - scoring fighter ace of the World War II Royal Hungarian Air Force , who had voluntarily returned from US captivity to help revive Hungarian aviation . The victims were cleared posthumously following the fall of communism . Rákosi had difficulty managing the economy and the people of Hungary saw living standards fall rapidly . His government became increasingly unpopular , and when Joseph Stalin died in 1953 , Mátyás Rákosi was replaced as prime minister by Imre Nagy . However , he retained his position as general secretary of the Hungarian Working People ' s Party and over the next three years the two men became involved in a bitter struggle for power . As Hungary ' s new leader , Imre Nagy removed state control of the mass media and encouraged public discussion on changes to the political system and liberalizing the economy . This included a promise to increase the production and distribution of consumer goods . Nagy also released rightist opposition from prison and talked about holding multiparty elections and withdrawing Hungary from the Warsaw Pact . On 9 March 1955 , the Central Committee of the Hungarian Working People ' s Party condemned Nagy for rightist deviation . Hungarian newspapers joined the attacks and Nagy was accused of being responsible for the country ' s economic problems and on 18 April he was dismissed from his post by a unanimous vote of the National Assembly . Rákosi once again became the leader of Hungary . Rákosi ' s power was undermined by a speech made by Nikita Khrushchev in February 1956 . He denounced the policies of Joseph Stalin and his followers in Eastern Europe . He also claimed that the trial of László Rajk had been a " miscarriage of justice " . On 18 July 1956 , Rákosi was forced from power as a result of orders from the Soviet Union . However , he did manage to secure the appointment of his close friend , Ernő Gerő , as his successor . On 3 October 1956 , the Central Committee of the Hungarian Working People ' s Party announced that it had decided that László Rajk , György Pálffy , Tibor Szőnyi and András Szalai had wrongly been convicted of treason in 1949 . At the same time it was announced that Imre Nagy had been reinstated as a member of the party . Revolution of 1956 . The Hungarian Revolution of 1956 began on October 23 as a peaceful demonstration of students in Budapest . The students protested for the implementation of several demands including an end to Soviet occupation . The police made some arrests and tried to disperse the crowd with tear gas . When the protesters attempted to free those who had been arrested , the police opened fire on the crowd , provoking rioting throughout the capital . Early the following morning , Soviet military units entered Budapest and seized key positions . Citizens and soldiers joined the protesters chanting " Russians go home " and defacing communist party symbols . The Central Committee of the Hungarian Working People ' s Party responded to the pressure by appointing the reformer Imre Nagy as the new Prime Minister . On October 25 , a mass of protesters gathered in front of the Parliament Building . ÁVH units began shooting into the crowd from the rooftops of neighboring buildings . Some Soviet soldiers returned fire on the ÁVH , mistakenly believing that they were the targets of the shooting . Supplied by arms taken from the ÁVH or given by Hungarian soldiers who joined the uprising , some in the crowd started shooting back . Imre Nagy now went on Radio Kossuth and announced he had taken over the leadership of the Government as Chairman of the Council of Ministers of the People ' s Republic of Hungary . He also promised " the far - reaching democratization of Hungarian public life , the realisation of a Hungarian road to socialism in accord with our own national characteristics , and the realisation of our lofty national aim : the radical improvement of the workers ' living conditions . " On October 28 , Nagy and a group of his supporters , including János Kádár , Géza Losonczy , Antal Apró , Károly Kiss , Ferenc Münnich and Zoltán Szabó , managed to take control of the Hungarian Working People ' s Party . At the same time revolutionary workers ' councils and local national committees were formed all over Hungary . The change of leadership in the party was reflected in the articles of the government newspaper , " Szabad Nép " ( i . e . Free People ) . On 29 October the newspaper welcomed the new government and openly criticised Soviet attempts to influence the political situation in Hungary . This view was supported by Radio Miskolc that called for the immediate withdrawal of Soviet troops from the country . On October 30 , Imre Nagy announced that he was freeing Cardinal József Mindszenty and other political prisoners . He also informed the people that his government intended to abolish the one - party state . This was followed by statements of Zoltán Tildy , Anna Kéthly and Ferenc Farkas concerning the restitution of the Smallholders Party , the Social Democratic Party and the Petőfi ( former Peasants ) Party . Nagy ' s most controversial decision took place on 1 November when he announced that Hungary intended to withdraw from the Warsaw Pact and proclaim Hungarian neutrality . He asked the United Nations to become involved in the country ' s dispute with the Soviet Union . On 3 November , Nagy announced the details of his coalition government . It included communists ( János Kádár , Georg Lukács , Géza Losonczy ) , three members of the Smallholders Party ( Zoltán Tildy , Béla Kovács and István Szabó ) , three Social Democrats ( Anna Kéthly , Gyula Keleman , Joseph Fischer ) , and two Petőfi Peasants ( István Bibó and Ferenc Farkas ) . Pál Maléter was appointed minister of defence . Nikita Khrushchev , the leader of the Soviet Union , became increasingly concerned about these developments and on November 4 , 1956 he sent the Red Army into Hungary . Soviet tanks immediately captured Hungary ' s airfields , highway junctions and bridges . Fighting took place all over the country but the Hungarian forces were quickly defeated . During the Hungarian Uprising an estimated 20 , 000 people were killed , nearly all during the Soviet intervention . Imre Nagy was arrested and replaced by the Soviet loyalist , János Kádár , as head of the newly formed Hungarian Socialist Workers ' Party ( Magyar Szocialista Munkáspárt ) . Nagy was imprisoned until being executed in 1958 . Other government ministers or supporters who were either executed or died in captivity included Pál Maléter , Géza Losonczy , Attila Szigethy and Miklós Gimes . Changes under Kádár . First Kádár led retributions against the revolutionaries . 21 , 600 dissidents were imprisoned , 13 , 000 interned , and 400 killed . But in the early 1960s , Kádár announced a new policy under the motto " He who is not against us is with us " , a variation of Rákosi ' s quote : " He who is not with us is against us " . He declared a general amnesty , gradually 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 towards him and his regime . In 1966 , the Central Committee approved the " New Economic Mechanism " , through which it sought to overhaul the economy , increase productivity , make Hungary more competitive in world markets , and create prosperity to promote political stability . Over the next two decades of relative domestic quiet , Kádár ' s government responded alternately to pressures for minor political and economic reforms as well as to counter - pressures 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 subsidise unprofitable industries . Economy . As a member of the Eastern Bloc , initially , Hungary was shaped by various directives of Joseph Stalin that served to undermine Western institutional characteristics of market economies , democratic governance ( dubbed " bourgeois democracy " in Soviet parlance ) , and the rule of law subduing discretional intervention by the state . The Soviets modeled economies in the rest of the Eastern Bloc , such as Hungary , along Soviet command economy lines . Economic activity was governed by " Five Year Plans " , divided into monthly segments , with government planners frequently attempting to meet plan targets regardless of whether a market existed for the goods being produced . Producer goods were favored over consumer goods , causing consumer goods to be lacking in quantity and quality in the shortage economies that resulted . Overall , the inefficiency of systems without competition or market - clearing prices became costly and unsustainable , especially with the increasing complexity of world economics . Meanwhile , other Western European nations experienced increased economic growth in the Wirtschaftswunder ( " economic miracle " ) , Trente Glorieuses ( " thirty glorious years " ) , and the post - World War II boom . While most western European economies essentially began to approach the per capita Gross Domestic Product levels of the United States , Hungary ' s did not , with its per capita GDPs falling significantly below their comparable western European counterparts : The per capita GDP figures are similar when calculated on PPP basis : Housing shortages also emerged . The near - total emphasis on large low quality prefabricated apartment blocks , such as Hungarian Panelház , was a common feature of Eastern Bloc cities in the 1970s and 1980s . Even by the late 1980s , sanitary conditions were generally far from adequate . Only 60 % of Hungarian housing had adequate sanitation by 1984 , with only 36 . 1 % of housing having piped water . Transition to Western - style democracy . Hungary ' s transition to a Western - style democracy was one of the smoothest among the former Soviet bloc . By late 1988 , activists within the party and bureaucracy and Budapest - based intellectuals were increasing pressure for change . Some of these became reformist social democrats , 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 national opposition established the Hungarian Democratic Forum ( MDF ) . Nationalist movements , such as the Jobbik , reappeared after a rapid decline in nationalist sentiment following the establishment of the People ' s Republic . Civic activism intensified to a level not seen since the 1956 revolution . In 1988 , Kádár was replaced as General Secretary of the Communist Party , and reform communist leader Imre Pozsgay was admitted to the Politburo . In 1989 , the Parliament adopted a " democracy package " , which included trade union pluralism ; freedom of association , assembly , and the press ; a new electoral law ; and in October 1989 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 . Kádár ' s major political rivals then cooperated to move the country gradually to Western - style 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 round table , 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 . On the 33rd anniversary of the 1956 Revolution , October 23 , the Presidential Council was dissolved . In accordance with the constitution , parliament Speaker Mátyás Szűrös was named provisional president , and he officially proclaimed the Republic of Hungary . The revised constitution also championed the " values of bourgeois democracy and democratic socialism " and gave equal status to public and private property . Hungary decentralized its economy and strengthened its ties with western Europe ; in May 2004 Hungary became a member of the European Union .