Jorg Hirsch / Kim Travnor (translation)

Andrew Andersen (map editing for web version)


Longman London and New York 1996







Hungary under Kádár




After the crushing of the spontaneous popular uprising in 1956, Hungary's development became inseparably linked with the name of János Kádár. Quite unlike his predecessors, Rákosi and Gerő, he was neither a bloodthirsty Soviet governor nor an inflexible Stalinist. Krushchev's initially docile servant and executor of the Soviet military administration's instructions soon turned out to be a cautious reformer. Despite granting safe and marginal concessions, he knew how to win the population's grudging approval and toleration of the régime in the course of time and eventually became the affable pioneer of liberalisation. Despite his strict observance of Socialist law, the stiff punishment meted out to prominent participants in the uprising, the start of an efficient and eventually successful collectivisation programme and thorough purges of the party and bureaucracy widened the gulf between the new leadership, which was heavily dependent on the Soviet military administration, and a disappointed, demoralised and disillusioned population. Although a 'revisionist' course along Yugoslav or even Polish lines was as unthinkable as the continuation of Nagy's policy of national autonomy and neutrality, Kádár's personal experiences of the worst forms of Stalinism did, however, rule out a return to the earlier 'dogmatism' of Rákosi's personal dictatorship. The new party chief and prime minister had to pursue an unconventional 'centralist' policy, dictated by the prevailing circumstances, which also took account of national interests. His brand of 'centrism' was both eclectic and pragmatic. His first aim was to strengthen the régime by putting all his efforts into raising the standard of living, developing the economy and depoliticising many of the country's bureaucratic institutions. Despite limited opportunities to allow more active popular participation in the political decision-making processes, he began dismantling various ideological constraints and supported the population's predisposition to remain apolitical. As a result of the economy's relatively high growth rate, the gradual extinction of the old peasant class with its traditional conservative habits and the accelerated process of urbanisation, Magyar society found itself undergoing a profound process of social transformation during this transitional period, a process which essentially helped Kádár realise his aims.

Kádár was a publicity-shy man who felt an aversion towards any form of personality cult. According to the few known and often contradictory details of his life, he was born János Czermanik, son of a rural labourer, in 1912 in the Adriatic port of Fiume. Soon after completing his apprenticeship as a precision engineer, he joined the Communist Youth League. After a number of years in prison he became one of the co-founders of the illegal Communist Party during the period 1940-41 and after 1943 was made Secretary of the Central Committee and editor of the party newspaper Szabad Nép. As one of the few Hungarian Communists admitted into the inner ruling circle dominated by the 'Muscovites', he rose to become deputy General Secretary of the MKP and was made interior minister and head of the state security services in August 1948. In 1951, he was arrested on charges of espionage, state treason and 'Titoism', and after being tortured into confessing was subsequently sentenced to two years' imprisonment. After his rehabilitation he was admitted to the Politburo in July 1956 and given a post as secretary to the Central Committee. In his capacity as First Secretary of the Central Committee, he took over the leadership of the Hungarian Socialist Workers' Party (MSzMP), which he had reorganised, on 25 October 1956, following Gerő's forced resignation. On 4 November 1956, he took over on his own initiative as the new head of the Soviet-backed régime. The opinion of several experts, that after realistically appraising the international situation and the options open to Hungary, Kádár's 'betrayal' of Nagy and the nation's wishes stemmed from a desire to rescue the foundations of the Communist régime through personal intervention and spare Hungary a return to the errors of the Stalinist Rákosi era is, in the light of his subsequent policies, not wholly unjustified.

When, in the early hours of the morning of 7 November 1956, Kádár returned under Soviet escort to the scene of the fighting in Budapest, he found a completely disintegrated party and an administrative apparatus barely capable of functioning. The editorial offices and printing presses of the party newspaper -- now renamed Népszabadság (People's Freedom) -- had still to be recaptured from the insurgents. Apart from Kádár, the only members of the provisional Central Committee were initially Antal Apró, István Kossa and Ferenc Münnich. Other members were soon coopted and the Committee called upon all party members to fight against counter-revolution and any attempts to restore capitalism in Hungary. The relative weakness in the size of the new leadership and its organisational support in the Hungarian Socialist Workers' Party (MSZMP) -- of its 900,000 members, only 96,000 were admitted to the new party -- ruled out the possibility of expelling at a stroke all the party officials implicated in the uprising. Consequently, Kádár was obliged to tolerate supporters of Nagy's policies alongside old Stalinists in the restructured party hierarchy. The new régime did endorse Nagy's decree abolishing the old state security service, the ÁVH, on 3 December, but created a new security department of the state police in its place under the authority of the interior minister and entrusted with the same tasks as its predecessor. How little say Kádár's government and the party had in the running of the country can be seen from the fact that Nagy, who was enticed away from the Yugoslav embassy on 22 November by a guarantee of personal safety, was abducted along with his entourage by a Soviet military escort and 'voluntarily' taken to Rumania. Thereafter, the fight against 'counter-revolutionaries' and 'revisionists' became the main focus of the political debate. The ensuing mass dismissals affected civil servants, teachers, officers, trade union officials, journalists and economic experts just as much as party workers who were judged unreliable. The Writers' League was disbanded. Celebrated authors such as Gyula Háy and Tibor Déry, who had described the Soviets' part in the crushing of the revolution as an 'historical mistake', were imprisoned.

Krushchev may well have urged Kádár to take a tougher line when the former visited Budapest early in January 1957. The Hungarian party chief was given a sympathetic hearing when he read out a statement of principle in which he said that the Soviet Union had twice fought on behalf of Hungary's national independence: against Hitler's fascists and the reactionary Horthy régime in 1944-45 and against the 'onslaught of counterrevolutionary imperialism' in 1956. He went on to say that the Red Army was also protecting the country against further imperialist attacks 'in the present tense situation'. Thus, subsequent measures such as the reopening of the internment camps, the proclamation of a state of emergency, the introduction of special courts, the ban on political activities outside the framework of the ruling party, the abolition of the Revolutionary Committee, the creation of workers' vigilante squads as a kind of 'armed wing of the party' and the resumption of censorship may well have been the result of direct Soviet intervention.

Kádár's compliance in what was a difficult situation was rewarded with a series of significant Soviet concessions. A Soviet-Hungarian Pact, signed in Moscow on 28 March 1957, went some of the way to reducing Hungary's hitherto semi-colonial status by giving due consideration to the principles contained in the Soviet declaration of 30 October 1956. New economic agreements allowed for trade between the two states to be developed in future on the basis of world market prices. The Soviet Union not only extended the period of repayments on outstanding debts, but granted a long-term loan of 750 million roubles and consignments of manufactured goods and raw materials to the value of 1.1 billion roubles. Although Kádár's long-term goal of liberalising Hungary's one-party dictatorship and increasing the role of the individual in shaping public opinion did not accord with the ideological standards set by the Soviet Communist Party, the Kremlin leaders were visibly concerned to improve the credibility of the Hungarian Communists in the eyes of their own people and to strengthen support for a régime which had been imposed on the population only a short time before by the use of Soviet troops. 'The complete equality of relations' between the Soviet and Hungarian Communists and 'the part played by Soviet army units in crushing fascist agitators' actively supported by 'imperialist forces', were praised as a 'noble act of proletarian solidarity'. The 'temporary residence' of Soviet units in Hungary, which was justified by pointing to ' NATO's warmongering' and the arms race, was confirmed on 27 May 1957 when a treaty was signed providing for the stationing of troops on Hungarian soil. After 1958, following a purge of the regular Hungarian armed forces to which Soviet advisers were allocated down to company level, the number of Soviet troops stationed in Hungary was able to be reduced rapidly down to 4 divisions and several air force units, whose total strength of around 80,000 men remained the same down to the collapse of Communism.

Assured of massive Soviet protection and backing, Kádár also succeeded in fending off his 'dogmatic' critics. He had decreed the creation of a new Central Committee Secretariat for the party, which had grown to 225,000 members by 1 April 1957. Apart from himself, its members included Jenő Fock, the former leader of the Trade Union Federation, Kállai, Kiss and Marosán. They supported Kádár's rejection of the criticisms made by the earlier party ideologue, József Révai, who had returned from Soviet exile. He called on the regime to give up its relatively 'liberal' course, return to the old Stalinist methods of repression and fully reinstate Rákosi and Gerő. Once Krushchev had defeated the 'anti-party opposition' in the Soviet Communist Party, he did not hesitate to give Kádár his full support, thus pulling the carpet from under the feet of Hungary's internal opposition. At the First Party Congress of the Hungarian Socialist Workers' Party (MSzMP), held on 27-29 June, Kádár, while justifying his own 'centrist' line, attacked both the mistakes of the 'dogmatists', Rákosi and Gerő, and the 'practitioners of counter revolution', Nagy and Losonczy. The refounding of the youth organisation, the Communist Youth League (Kommunista Ifjusági Szövetség), the intensified recruitment drive to persuade non-party members to join the MSZMP, which offered them improved opportunities for social advancement, the revival of the Patriotic Popular Front and a sensible economic policy were all designed to serve the goals of strengthening the dictatorship of the proletariat and the power of the people while also increasing popular support for the party and the system and securing and maintaining the party's organisational unity.

At this early stage almost all of the country's creative artists, like the vast majority of the population, who had generally lapsed into the doldrums and a mood of resignation, adopted an attitude of passive rejection towards Kádár's régime. But, since Hungary's new political masters did not demand lip-service to Communism or the Soviet Union and kept the use of indoctrinating propaganda within bounds, the political climate began to improve. This was also helped by the fact that the Soviet troops were withdrawn to their barracks from the end of 1957 onwards and the intimidating and provocative presence of 'big brother' thus became less apparent. Although the economy had virtually ground to a halt in November 1956, increased deliveries of goods from fellow Socialist states and the peasant farmers, who were successfully won over to the régime by high prices, assured a sufficient availability of goods. In December 1956, a commission was set up to investigate the economic situation. Led by István Varga, a former member of the Party of Smallholders, it condemned Rákosi's command economy and proposed instead a more rational and less centralised system of economic planning. However, it failed to persuade the government to implement its recommendations of delegating more responsibility to the factories and allowing a controlled element of competition. When, by the middle of 1957, production figures had again reached the levels recorded for September 1956, the government felt justified in reducing wages to their earlier August levels, even though they had been increased as recently as January in order to provide an incentive to productivity. But even at this stage it was clear that there was no likelihood of fulfilling the targets set by the Second Five Year Plan. As a result, a new Three Year Plan, intended to run until 1960, was introduced in its place on 20 June 1958. When it soon became clear that the new targets could also not be met, the Hungarians introduced the Soviet idea of 'Socialist brigades' in December 1958 in order to boost the economy's insufficient productivity. This form of competition was to be encouraged by the party and the trade unions and was intended to help guarantee the quality of products, together with the maximum exploitation of raw materials, energy resources and machinery. The various economic shortages experienced at the time made the Hungarians keen advocates of Soviet plans for reorganising and integrating Comecon, although they feared that the division of labour written into the treaty signed in Sofia on 14 December 1959, which categorised Hungary as an 'industrialised agrarian country', would, if consistently applied, retard the development of their industrial capacity. However, Comecon initially offered them a closed economic sphere in which they could obtain the raw materials they required relatively cheaply and sell their still relatively uncompetitive products on the world market without too much difficulty. Two-thirds of the country's foreign trade was conducted with Hungary Comecon partners, whereby the Soviet Union alone absorbed 36.1 per cent of Hungarian exports and provided 95 per cent of Hungary's imported raw iron, 68 per cent of its oil, 51 per cent of its rolled steel, 78 per cent of its wood and 56 per cent of its paper.

The MSZMP and the government took special pains to persuade peasants to rejoin the agricultural cooperatives after they had left them en masse during the 1956 uprising. By 31 December 1956, only 2,089 collectives were still operating with approximately 100,000 farmers and 120,000-members cultivating a mere 6.1 per cent of the country's arable land. Ferenc Münnich, who replaced Kádár as prime minister on 28 January 1958, and his agricultural minister, Imre Dögei, were willing to try to win over the peasants by persuasion. By the end of 1958, a total of 143,229 farms were members of the country's 3,507 cooperatives. On 7 December, however, the Central Committee decided to speed up the pace of collectivisation and approved coercive measures against the Kulaks, by which they meant any peasant opposed to the compulsory incorporation of private land into the cooperatives. Although declining productivity made brief pauses for consolidation necessary, the government proudly announced on 30 September 1961 that 1.07 million farms had been organised into 4,546 collectives employing 1,195 million members. In all, 95.6 per cent of all farmland, including 81.1 per cent farmed by cooperatives, had already been incorporated into the 'Socialist sector', while the remaining 16.4 per cent of land managed by collectives remained private farms of about half a hectare for the peasant's own use. Thanks to intensive cultivation methods, however, these farms produced a total of 40 per cent of the entire agricultural production of the cooperatives. Thus, 46 per cent of all meat production, 79 per cent of poultry, 90 per cent of eggs, 60 per cent of milk and 80 per cent of fruit was supplied by these individual allotments.

Over the years that followed the government adopted a policy of allowing peasants a part share in labour-intensive and delicate cultures, e.g. viticulture, tobacco-growing and market gardening. Peasants who worked in these areas had their efforts rewarded by being allowed to retain a third of their yield. But despite more intensive mechanisation and the increased use of fertilisers, average yields still lagged behind those recorded in the pre-war years. The summer drought of 1961 and the poor harvests of 1963 and 1964 made it necessary to import large amounts of Canadian maize, which could only be paid for after the Soviet Union was forced to put up some of the necessary foreign exchange. Many young farmers migrated to the towns, preferring to find more regular employment in the factories, with the result that the government was forced to subsidise the collectives over a long period and create additional incentives for the rural population before a noticeable improvement in yields took place towards the end of the 1960s.

The renewed deterioration in the Soviet Union's relations with Yugoslavia after the autumn of 1957 also had an effect on Hungary's internal politics. The attacks on 'revisionism' and 'nationalism' at the first World Conference of Communist and Workers' Parties in Moscow in November 1957, together with the call to observe strictly the 'principles of proletarian internationalism', were intended to help Krushchev restore the Soviet Communist Party's leadership claims and the USSR's position of supremacy in the Socialist Bloc. At the same time, they were also designed to prevent the development of 'independent paths to Socialism'. Tito's refusal to accept this political and ideological subordination provoked increasingly sharp criticism of Yugoslavia. On 27-28 March, Kádár tried to mediate with Tito, but failed to close the gap between the Yugoslav and Soviet positions. On a visit of inspection to Hungary from 2 to 9 April 1958 Krushchev made it quite clear that he was not prepared to accept any further deviation from the Moscow party line or attacks on the existence of the Socialist Bloc.

As a result of this 'anti-revisionist campaign', many veteran Stalinists were encouraged to return to Hungary from their Soviet exile and seek readmission to the party and state apparatus from which they had been banned by a Central Committee resolution of February 1958. The wave of purges which was now set in motion against 'revisionists' and 'nationalists' cost several thousand army officers, police officials and many civil servants their party membership and positions. On 16 June 1958 the execution of Imre Nagy, General Pál Maléter and two other leaders of the uprising charged with 'conspiracy and creating a secret organisation aimed at forcibly seizing power and overthrowing the Hungarian People's Democracy' was officially announced in Hungary. These executions, which broke the promises made to the Belgrade government in November 1956 and again in spring 1958 to guarantee the main participants in the uprising free passage out of the country or, at least, spare their lives, not only represented an enormous threat to Tito, but were a brutal act of revenge by Krushchev, a moral setback for Kádár and, thus, a triumph for the 'dogmatists' among his internal party critics.

Despite this loss of credibility, 98.4 per cent of the electorate voted in the elections to the National Assembly and Soviets on 16 November 1958. Of this figure, 99.6 per cent voted for the MSzMP's single list of candidates. Of the 338 deputies elected, 139 were party officials and 53 were members of the Central Committee. Even Béla Kovács, the former General Secretary of the Party of Smallholders, who had been abducted by the Soviets in February 1947 and first returned to Hungary in 1956, won a seat which illness prevented him from occupying until his death in 1959. The satisfactory election result could not, however, hide the fact that broad sections of the population had remained politically completely passive and felt alienated by the restrictive cultural policy of orthodox Stalinism. Kádár openly acknowledged the population's basic attitude at the MSzMP's Seventh Party Congress, held between 30 November and 5 December 1959, when he remarked that 'the revolution on the cultural front lags behind the results achieved in the political and economic spheres'.

Since the original Hungarian Communist Party (MKP) and its successor (from 1948), the Hungarian Worker's Party (MDP), had both held three party conferences each up until this point, Kádár did not hesitate to designate the MSzMP's first congress the 'Seventh' Party Congress, thus legitimising it in terms of the continuity and tradition of Hungary's Communist movement. In all, 669 delegates represented 402,456 party members organised in 17,000 various organisations. The Communist Youth League accounted for a further 380,000 members. The party gave itself a new organisational statute intended to ensure 'democratic centralism' and its implementation. Kádár's foreign policy, aimed at compromise, and Endre Sík, his foreign minister from 1958 onwards, who, despite growing tensions, tried hard to maintain good relations with Peking and Tirana and did not break off relations with Belgrade, was expressly praised by Krushchev, who attended the congress and again emphasised the Soviet Union's willingness to stand by its friends in Hungary at any time against the enemies of Socialism. Kádár's gratitude for the Soviet Union's earlier 'fraternal assistance' and its new offer of support culminated in a request for Soviet troops to remain in Hungary 'as long as the international situation demands it'. It was at this congress that Krushchev developed his theory that many Communist parties obviously had to pull through a type of fever in the period after the Soviet Communist Party's Twentieth Party Congress in order to emerge with a stronger constitution and more resistant to new causes of illness. In his opinion, this had been convincingly demonstrated in the case of Hungary.

Close personal, one might almost say friendly, relations and close political contacts with Krushchev subsequently influenced Kádár's relationship with the Soviet Union. A sense of gratitude and the belief that Hungary's future was closely bound up with that of the Soviet Union, on which it was so economically dependent, encouraged Budapest to pursue a successful policy of cooperation with Moscow. At the same time, the Hungarian regime aimed at achieving the maximum possible freedom in internal politics. Kádár had no hesitation in unreservedly supporting the Soviet position towards the West and supported Moscow in its conflicts with China and Albania after 1961. He was also able to count to a large extent on the loyalty of the seventy-one members of the party's Central Committee as well as that of his colleagues in the Politburo and his five Central Committee Secretaries ( Fehér, Fock, Kiss, Marosán and Szirmai). For example, in a government reshuffle in January 1960 he relied on their help in replacing Imre Dögei who had made enemies through his tough collectivisation measures, with the former farm labourer, Pál Losonczi. Dögei was also expelled from the Central Committee. On 12 September 1961, Kádár took over again as head of government in place of Münnich. When Krushchev readopted a policy of de-Stalinisation at the TwentySecond Congress of the Soviet Communist Party in October 1961 and the Hungarians followed suit, the ideologically inflexible Kiss and Marosán were forced to resign from their party posts in 1962. After fruitless negotiations with his predecessors now living in the USSR, who refused to make a public confession, Kádár was even able to go as far as depriving Rákosi, Gerő and other opponents suspected of 'pseudo-left activities' or 'fractionalism' of their party membership. At the same time, however, the right wing was also warned against failing to pursue the official party line.

These expulsions were intended to mark an end to the Stalinist past and the 'violation of Socialist legality'. At the party's Central Committee's plenary meetings in March and August 1962, responsibilities for the leadership's actions in the Stalinist era were openly admitted -- though without mentioning Kádár's and Antal Apró's role in events. It was decided to rehabilitate and compensate the victims, and offers of clemency for the behind-the-scenes organisers of the show trials were also discussed. Mihály Farkas, Rákosi's right-hand man who died in 1965, and the ex-head of the ÁVH, Péter, were released from prison in 1960, the latter being demoted to a librarian's post. Ernő Gerő, who was by now almost totally blind, was allowed to return to Hungary where he was given the opportunity to live out his final years in peace. Rákosi's repeated requests to be allowed to return to Hungary from Kazakstan, where he managed a paper factory for a time, fell on deaf ears as far as Kádár was concerned. In 1971, the latter eventually allowed Rákosi's mortal remains to be interred in Hungary. However, the régime showed clemency even towards alleged 'counter-revolutionaries', who had been so harshly persecuted after 1957. An initial partial amnesty of 12 April 1959 gave prisoners categorised as 'less implicated' in the uprising their freedom. On 31 March 1960, the prison gates swung open for several prominent personalities including Nagy's adviser, Ferenc Donáth, Hungary's first President, Zóltan Tildy, and the writers, Tibor Déry and Gyula Háy. Following the closure of the internment camps and the abolition of the summary courts, a further amnesty in March 1963 ensured the release of the last prisoners to be sentenced for their part in the uprising. Kádár was now so firmly in control that he could afford to make these gestures of reconciliation and boost his personal prestige and the party's standing without fear of criticism from the Kremlin or his internal opponents within Hungary.

In January 1962, Kádár had paraphrased a verse from the New Testament ( Matthew12.V.30) when he confidently remarked, 'Whereas the Rákosi régime used to say "He, who is not for us is against us", we say "He, who is not against us, is with us and welcomed by us".' This maxim also dominated the party's Eighth Party Congress, held between 20 and 24 November 1962 when it was announced that the régime had achieved the realisation of the basic principles of Socialism and that the Hungarian people was now entering a phase of 'complete Socialist construction'. The key economic issue at the congress was how to implement the restructuring of Hungarian industry. Socialist culture would also have to be more strongly developed and contribute to raising the Socialist consciousness of the masses. The 614 delegates at the congress now represented 511,965 party members and candidates, who decided in favour of 'collective leadership as the sine qua non for the further democratisation of political and social life' in a new version of the party's statutes and extended the powers of the Central Committee which now numbered 81 members. The supporters of Kádár's 'centralist' line occupied all the places in the Politburo. The master printer, Rezső Nyers, who had managed to attain the post of finance minister, now joined the Central Committee Secretariat and pushed through a major economic reform. The party had the state apparatus and the administration of the economy so firmly under control that Kádár was able to announce his intention to come some way towards satisfying popular demands for a higher standard of living and for greater personal freedom -- though only within certain limits. The leading ideologue and Central Committee Secretary, István Szirmai, began cautiously to satisfy the desire of many Hungarians to travel abroad, which had been stimulated by increased opportunities to establish contacts and acquire information. The result was that the number of foreign travel permits to the West soared from 35,000 in 1960 to 143,000 within seven years and thereafter leapt to over 3.8 million by 1980. Hungary's foreign exchange earnings also benefited from the steadily growing stream of visitors from the West.

Although bitter memories of the Rákosi period and the bloody crushing of the popular uprising were still very much alive, more and more Hungarians managed to identify with Kádár's cautious pragmatism and relative liberalism. The party had made it a growing priority to mediate between the Kremlin's insistence on conformity within the Socialist Bloc and the expectations and needs of the Hungarian people. Since they had no illusions regarding the true nature of Communist rule and were dependably loyal in national matters, the Hungarians seized the opportunities which Kádár's political system offered them. The leadership realistically appraised the political, strategic and economic realities in order to allow the possibility of a restricted pluralism in internal affairs. A liberal policy on censorship allowed more freedom of speech, the principles of justice were to a large extent observed and totalitarian oppression no longer existed. The programme of Socialist renewal which Kádár purposefully pursued regardless of any setbacks, gave the Hungarians more individual and intellectual freedom, a modest degree of affluence and a satisfactorily functioning economy without parallel in the other Communist countries of eastern Europe.

increased opportunities to establish contacts and acquire information. The result was that the number of foreign travel permits to the West soared from 35,000 in 1960 to 143,000 within seven years and thereafter leapt to over 3.8 million by 1980. Hungary's foreign exchange earnings also benefited from the steadily growing stream of visitors from the West.

Although bitter memories of the Rákosi period and the bloody crushing of the popular uprising were still very much alive, more and more Hungarians managed to identify with Kádár's cautious pragmatism and relative liberalism. The party had made it a growing priority to mediate between the Kremlin's insistence on conformity within the Socialist Bloc and the expectations and needs of the Hungarian people. Since they had no illusions regarding the true nature of Communist rule and were dependably loyal in national matters, the Hungarians seized the opportunities which Kádár's political system offered them. The leadership realistically appraised the political, strategic and economic realities in order to allow the possibility of a restricted pluralism in internal affairs. A liberal policy on censorship allowed more freedom of speech, the principles of justice were to a large extent observed and totalitarian oppression no longer existed. The programme of Socialist renewal which Kádár purposefully pursued regardless of any setbacks, gave the Hungarians more individual and intellectual freedom, a modest degree of affluence and a satisfactorily functioning economy without parallel in the other Communist countries of eastern Europe.



The Three Year Plan, launched in 1958 in place of the interrupted Five Year Plan, proved moderately successful in overcoming the country's economic problems in the wake of the 1956 uprising, but failed to achieve any real economic growth. The accelerated pace of agricultural collectivisation and the economic problems experienced by the other east European Socialist states also had a major effect on Hungary, with the result that the Party Central Committee approved the so-called 'Second' Five Year Plan for the development of the economy on 12 September 1961. The targets set by the State Planning Office continued to give priority to the encouragement of heavy industry, but also recognised the need for the rapid expansion of the chemicals industry and the provision of machinery, improved seeds and fertilisers for the agricultural sector. As early as 1961, there was a visible shift away from fixing illusory growth targets in favour of relaxing economic planning constraints by giving enterprises more freedom in decision-making, encouraging individual initiative and tolerating the acquisition of private property and pursuit of profit. It was hoped that increased output and improved productivity and technology would raise industrial production by 50 per cent, the GNP by 35 per cent and real income by 16-17 per cent before the end of 1965. Closer cooperation among the member states of Comecon, the provision of Soviet loans and preferential trading terms with the western industrial countries which granted Hungary the status of 'most favoured' trading partner almost made it possible to fulfil the plan's targets.

The realisation that the Socialist economy would not automatically replace 'outdated individualism' with a 'collective social awareness' also helped the party stimulate the work-effort of ordinary Hungarians and thus increase productivity by allowing a measure of personal gain. In view of Hungary's firmly established membership of the Socialist Bloc, the Soviet leadership was prepared to tolerate initial efforts to develop and apply new forms of economic control. When Kádár visited the Soviet Union between the 10 and 22 July 1963, his echoing of the Soviet demand: for closer economic and technological cooperation -- aimed primarily at Hungary's neighbour, Rumania -- earned Krushchev's praise and economic concessions in several areas. Stalinism's ruthless exploitation of fellow Socialist countries for the benefit of the Soviet Union had long since given way to a fairer consideration of the mutual advantages to be gained by both sides. On his return visit to Hungary between 31 March and 11 April 1964 Krushchev awarded Kádár the Order of Lenin, bestowing upon him the title of 'Hero of the Soviet Union'. The Kremlin leader's unexpected fall from power on 15 October 1964 did not seriously affect the hitherto much applauded 'special relationship' between Moscow and Budapest, although the party did have to deal with Hungary's growing nationalism and its anti-Soviet undertones during the 'phase of Socialist reconstruction'. The palace revolution which brought Brezhnev and Kosygin to power in the Kremlin came as a surprise to Kádár during a visit to Warsaw, but he paid a warm tribute to his former mentor and assured his countrymen on several occasions that the party would not change its political course. While avoiding any criticism of the wisdom of the decision made by their Soviet colleagues, the Central Committee and the party newspaper Népszabadság also praised Krushchev's achievements and his association with Hungarian Socialism during its period of rapid progress.

The small remaining group of Rákosi supporters in Hungary hoped that Krushchev's fall from power would also result in the fall of the pragmatic 'revisionist', Kádár, whose policies they labelled a 'rebirth of Social Democracy. This, they hoped, would bring about the return of the veteran Stalinist, Rákosi, now living in exile in Kazakstan. To allay fears that the new Kremlin leaders might disturb Hungary's precarious stability through clumsy actions and cause unrest, Kádár headed a Hungarian delegation which visited Moscow for talks with Brezhnev and Kosygin as early as 8-10 November 1964. From 29 to 31 January 1965, the new First Secretary of the Soviet Communist Party and the Secretary of the Central Committee, Podgornyi, visited Budapest to form their own judgement on the internal political situation in Hungary. The reason for this visit was almost certainly the suspicion that the leaders of the MSzMP were also not immune to the National Communist virus at loose in Rumania and that Hungary was seeking an alternative to its trade within Comecon by increasing its foreign trade links with the West. On 11 February, Kádár reported to the National Assembly only that the withdrawal of Soviet troops stationed in Hungary had not been discussed at the talks, for although there was no internal political reason for their presence, they remained indispensable for international reasons. However, Hungary's demonstration of its desire to maintain proper diplomatic relations with all countries, the interest shown by foreign minister, János Péter, in western economic strategy and plans for Europe during his visits to Austria and France -- especially de Gaulle's vision of a reorganised Europe des patries -- together with Péter's belief in April 1965 that the countries of Central Europe and the Danube region should increase their contacts with one another in the interest of close regional cooperation, regardless of their different social structures, once more aroused the Kremlin's distrust. In order to avoid disagreement, the Chairman of the Supreme Soviet, A. Mikojan, who as Krushchev's closest colleague and a supporter of Hungarian policy and autonomy for the People's Democracies enjoyed great respect, was despatched to Budapest in April 1965. Since the workers reacted unexpectedly quickly with strike threats to the Stalinist-inspired rumour that Kádár was about to resign, the Kremlin leaders felt obliged to allow the Hungarian party chief to remain in his post while persuading him to give up his position as head of government. After a visit to Moscow between the 23 and 29 May 1965, at which a Hungarian delegation conceded to the Soviets their 'full agreement on the most important international problems', together with their support of the Soviet Communist Party's efforts to maintain the unity of action of all Socialist countries, Kádár handed over his post as prime minister to his deputy, the genial, but somewhat lazy Gyula Kállai on 25 June 1965. In order to counter the popular unrest which it feared would take place, the Central Committee kept its decision secret for three days to give police and military units time to mount a security operation to protect public buildings and let party organisations inform their members of the real reasons behind the decision. Kádár, who henceforth dedicated himself increasingly to party affairs, did, however, recognise how to exploit the opportunity which Krushchev's fall from power opened up for him. From now on he could appear in Hungary with a new sense of self-esteem and not simply as the puppet of the man who had crushed the Hungarian uprising in 1956. In both foreign policy and internal relations within the Socialist Bloc he no longer had to follow Moscow's instructions out of personal loyalty and let Hungary's interests take a back seat. He supported the Kremlin's line on all important issues in a 'calculated alliance', but reserved the right to pursue his own liberalising policies cautiously in internal politics and settle internal party conflicts as soon as they arose. In voting at the United Nations, in granting financial and technical aid to North Vietnam or in freezing economic and cultural contacts with the People's Republic of China, Hungary consistently supported Soviet actions. At the Twenty-Third Party Congress of the Soviet Communist Party in March 1966 Kádár assured the Kremlin that the idea of an anti-Soviet Communism was a contradiction in terms. Nevertheless, the emergence of dangerous nationalist and singularly anti-Soviet tendencies, which provided a marked contrast to the 'Socialist patriotism' the régime wished to inculcate, obliged the Hungarian party to apply counter-measures. The Kremlin, for its part, knew how to reward such efforts to maintain the solidarity of the Socialist Bloc countries. Hungary was allowed to contribute the smallest army and the lowest military expenditure of any of the Warsaw Pact member states and yet was the only country in the 'southern triangle' to send troops to the manoeuvres which took place in southern Bohemia in autumn 1966. From 1968 to 1989, the Hungarian army's strength in terms of manpower remained constant at 102,000 soldiers, organised into one armoured division and five motorised infantry divisions, together with a small air force of 140 combat aircraft. Military expenditure, which still amounted to 7.4 per cent of the national budget in 1963, was reduced to 4.6 per cent by 1968 -- a figure equivalent to about 2.6 per cent of Hungary's national income.

Even more significant, however, was the fact that the Soviet leadership did not oppose the economic reforms introduced in Hungary under the Third Five Year Plan. The New Economic Mechanism, as it was called, due to come into effect on 1 January 1968, was launched by a Central Committee decree of May 1966. The new plan signalled the introduction of a Socialist market economy which gave producers considerable freedom in fixing prices and determining wages and salaries according to company profits. It also allowed workers' participation in internal decisionmaking on production targets and areas of investment, and the agricultural cooperatives were also given greater freedom. In September 1965, the Soviet Union introduced a programme of economic reform, which was soon halted, whereby stricter planning controls from above and greater flexibility at the lower level had been designed to secure 'the maximum possible development' of the economy 'in the framework of centralised state planning'. At the same time, the government, within the framework of the NEM which allowed some measure of market forces, aimed at fewer controls, more realistic planning from above and a greater degree of decentralisation in decision-making. The difficulties encountered in the initial phase were greater than expected, because a chronic shortage of capital, disputes over areas of competence and the difficulty of implementing the New Economic Mechanism meant that there was not as rapid an increase in productivity and national income as had been hoped for. Positive effects were, however, noticeable in the agricultural sector since the guarantee of a minimum monthly income slowly closed the gap in earnings between industry and agriculture and halted population movement away from the land. In view of Hungary's strong economic dependence and its undisputed integration into Comecon, the Soviet Union felt able to allow Hungary more freedom of action in internal policy and even to accept loans from the West. Although the total value of Hungary's trade doubled between 1960 and 1967, the supply of goods nevertheless remained relatively stable. Two-thirds of foreign trade was transacted with the country's Comecon partners, whereby the Soviet Union alone absorbed 36.1 per cent of Hungary's output and supplied 33.3 per cent of its total imports.

Discussion of the New Economic Mechanism also dominated the MSzMP's Ninth Party Congress, held between 28 November and 3 December 1966. The delegates resolved that 'the complete construction of Socialism remained . . . the historic task of the party and people'. The legal rights of the local party branches were also increased in keeping with the aim of furthering the development of Socialist democracy. Democracy within the factories was to be strengthened and in particular the National Assembly's participation in the political decision-making process extended. The leadership role of the party, which now numbered 585,000 members, was to be maintained, although its main task was given as the 'scientific analysis and building up of its political control of the masses and their organisation and mobilisation'. At a sitting on 14 April, the parliament, returned on 19 March on the basis of a new electoral law of 11 November 1966, which for the first time provided for more candidates than there were seats, appointed Pál Losonczi as Chairman of the Presidium and Kádár's loyal supporter, Jenő Fock, as the new prime minister in place of Kállai. MSzMP party members already comprised 35 per cent workers and 8 per cent peasants. The 'intelligentsia', i.e. members with a completed vocational training or white-collar workers, made up 38 per cent, government employees, civil servants and members of the armed forces 7.9 per cent. A further 9 per cent were retired or in receipt of a pension. Although women accounted for 51.6 per cent of the population, only 22.9 per cent were party members. Between 75 and 80 per cent of the National Assembly deputies, of whom about half gave their occupation as 'worker', were party members, with the result that the Electoral Association of the Patriotic Popular Front was no threat to the party's monopoly of power and the one-party system. Independent initiatives by the Assembly, which, according to Article 19 of the constitution, was 'the supreme organ of state power and representation of the people', was, therefore, narrowly limited, although its sphere of competence was supposed to include legislation, advising on and consenting to the government's programme, consenting to the budget, participating in formulating economic planning, ratifying international agreements and electing members to the Presidium and Council of Ministers.

Hungary's leaders, who were fully preoccupied with the economic reforms, followed the Kremlin's lead by distancing themselves from their Yugoslav and Rumanian neighbours and showing little inclination to respond to West German suggestions of establishing full diplomatic relations. This conformist behaviour was no doubt a result of the good, one might even say friendly, ties which developed on the basis of frequent bilateral contacts between the party and government hierarchies in Moscow and Budapest. Brezhnev took the opportunity to extol these relations built on trust when he visited Budapest between the 6 and 9 September 1967 on the occasion of prolonging the Treaty of Friendship and Mutual Support for a further 20 years. The obligation on both sides to increase cooperation within the framework of Comecon and the Warsaw Pact was extended to include military assistance in the event of an attack on either of the signatories 'by any state or group of states' (Article 6). Kádár used the occasion to reiterate his view, 'that no-one in the world has the right to call himself a Communist if he acts against the Soviet Union and holds anti-Soviet opinions'. The Hungarian party chief's behaviour can be understood, only if one considers how Hungary's position in the Socialist Bloc was complicated by its various ethnic and territorial disputes, as well as the half-a-century-old problem of Hungarian minorities in neighbouring states. True, the new Socialist constitutions of Czechoslovakia and Yugoslavia had improved the prospects for their Magyar minorities, but originally made cultural concessions were soon forgotten as a result of latent grievances concerning social and economic discrimination. Budapest was particularly concerned at the forcible abolition of the autonomous rights of the Magyar community in Transylvania from 1958 onwards. The closing down of many cultural establishments, such as the independent Hungarian Bólyai University in Cluj or the forced integration of the Hungarian community's minority schools in 1962 aroused no sympathy in Hungary for the strengthening of Rumanian nationalism under Gheorghe Gheorgiu-Dej and Nicolae Ceausescu. Although the Hungarian press and government did not politically exploit the Rumanian actions against the Transylvanian Magyars, there was a distinct cooling off in relations between Budapest and Bucharest. Various Soviet initiatives -- a conference on European peace and security, efforts to advance the 'process of Socialist integration' in the framework of Comecon and the Warsaw Pact and a new World Conference of Communist and Workers' Parties to condemn the schismatic Chinese leadership -- were patronised by Hungary but without any show of deep commitment.

In view of their own painful experience, the Hungarians observed the developments leading up to the 'Prague Spring' of 1968 and the Soviet intervention in Czechoslovakia with considerable interest. Kádár, who met the new Czechoslovak party chief, Dubček, on several occasions and who certainly advised caution, may well have also asked the Kremlin to show understanding, patience and a willingness to compromise with the Czechoslovakian reformers. The decision to mobilise two Hungarian divisions for the military invasion of Czechoslovakia on 21 August 1968 certainly did not come easily to the Hungarian leadership, given that they, too, were trying to develop 'Socialism with a human face', albeit initially only in the cultural and economic spheres. But the spark of revolution could all too easily set Hungary alight by spreading from the neighbouring Magyar minority in Southern Slovakia, thus jeopardising the consolidation of political power which had only just begun and the process of reconciliation between the party and the population. The state authorities managed to keep the lid on demonstrations and meetings held by workers and intellectuals to protest at Hungary's part in the invasion without resorting to a policy of tough repression. The régime justified Hungary's role as 'fulfilling its internationalist duty' and issued a 'recommendation' warning participants in such meetings always to adhere strictly to the party's directives. Hungary's foreign minister, Péter, completely rejected Brezhnev's doctrine of the 'limited sovereignty' of Socialist Bloc members and announced that it would always be 'an ever controversial issue', whether intervention was necessary 'in the interests of peace' or whether it should be avoided if at all possible 'in the interests of Socialist integration'. After 1968, Kádár, whose growing popularity as party chief with all sections of the population was hardly affected by his part in the decision to intervene, also tried successfully to maintain his policy of cautious internal political reform. Despite the reservations of mistrustful 'dogmatists' and opponents of reform, he tried to develop his policies further in practical everyday matters without giving offence or becoming too conspicuous. Kádár's realism, dry pragmatism and instinctive understanding of the realities of power proved to be qualities which were able to dispel the reservations which the Soviets felt towards Hungary's economic and social reforms. In the first year alone of the NEM's implementation, a reform of the economy which aimed at creating a 'socialist market' in which a considerable number of enterprises would be managed autonomously, had proved so successful despite the undeniable initial problems that the Hungarian economists were able to call all previous attempts at economic coordination unrealistic and propose three alternatives for discussion via the creator of the reform, Politburo member, Resző Nyers. In the first place, it had to be decided whether cooperation should continue to be developed, as in the past, on the basis of agreements made between states, or whether one should aim more for cooperation of a supranational character built upon 'the economic interests of economic enterprises'; secondly, whether foreign trade in eastern Europe should simply remain a two-way exchange of goods or whether a convertible currency should be introduced as a necessary first step towards a transition to free trade and free currency exchange; thirdly, whether in accordance with initial moves research and production should be coordinated or even integrated.

The Hungarians' desire to find answers to these questions, which would accord with the pace of the country's economic development and the 'principle of national independence', was noted in Moscow with some reservation, although Hungary's economists had been able to show at the end of 1969 that, thanks to the NEM, the growth rate in national income, which had previously been constantly declining, had risen for the first time (from 4.5 per cent in 1968 to 6 per cent in 1969) and the volume of foreign trade had increased by 14 per cent.

The government's reforms in the agricultural sector proved less successful. The law stipulated that the agricultural cooperatives would have to decide themselves how to the use the means of production, develop their own produce and find its market value. They would also have to do their own risk-taking and earn their own profits as befitted their entrepreneurial independence. The collective farms, which had been previously largely subsidised by the state were allowed to increase their prices by 9 per cent in 1966 and by a further 10 per cent between 1968 and 1970. At the same time, the government cancelled the major portion of any losses they had incurred and extended the repayment period of short-term loans. From now on two-thirds of the collectives began to show a profit. But only when they were allowed to indulge in activities outside of horticulture and livestock rearing by taking on the tasks normally associated with industry, transport and trade were they able to raise their incomes on average by 25 per cent (in exceptional cases, by 60 per cent) and increase their productivity. But with average yields of 32.3 quintals per hectare for maize and 24.3 quintals for wheat, Hungary's yields still fell far behind those of America and western Europe. The high rate of income growth for collective farmers subsequently led doctrinaire critics of reform to curb their entrepreneurial independence and undermine the individual's right to participate in decisions concerning collectively held property by merging the larger agricultural enterprises into giant economic units. The result was that apathy and a lack of incentive eventually returned at times to the countryside.

In certain Hungarian circles as well as in neighbouring Socialist states and especially in the Kremlin concern was felt at the NEM's unavoidable political side-effects. In order to function properly it required a loosening up of the ossified system of centralised decision-making under the control of the party leadership. The population was to be given improved conditions in the consumer sector and greater individual freedoms, including greater security before the law. While the Soviet leadership refrained from openly criticising the Hungarian Communists, warnings on a personal level and responses designed to calm fears were exchanged on several occasions between 1968 and 1970 without significant results. After talks with premier Fock and Péter during his visit to Hungary between 14 and 18 November 1968 the Russian foreign minister, Gromyko, emphasised the need to 'develop the unity and security of the Socialist states further'. The 'unity of the Communist movement' was also the main subject of talks which Kádár attended in Moscow between 6 and 10 February 1969 and formed a side issue at the Budapest summit held in March 1969, when a radical reform of the Warsaw Pact's command structure was discussed. Kádár had to dispel the anxieties of his Soviet guests that Hungary might witness the start of a development similar to that which had taken place in Czechoslovakia and an enthusiasm for reform might set in, over which the party might lose control. When, at the invitation of the Soviet Communist Party's Central Committee, Kádár spent a holiday recuperating in the Crimea between 2 and 27 August 1969, where he discussed 'bilateral and multilateral questions of common interest' with the Kremlin leaders, Hungary's internal political situation may well have been placed at the top of the agenda, as was the case during premier Fock's negotiations, held in Moscow on 16-17 March 1970. However, the Hungarian Communists were probably not subjected to too much pressure. Kádár, who had the backing of the entire Hungarian population and no political rival of equal stature to speak of, was the only guarantee of the continuing and constructive development of Communism in Hungary. The 'national traitor', 'Quisling' and 'Judas' of 1956, who had been established in power as a result of the Soviets' second intervention had not disappointed his countrymen's hopes for an increasingly liberal and tolerable brand of Communism.

Thus, at the MSzMP's Tenth Party Congress, held in Budapest at the end of November 1970, Brezhnev felt obliged to give his blessing to Hungary's reform programme: 'This principled attempt to solve the most important problems encountered in the development of Socialist society is fully understood by the Communists of the Soviet Union who view it with great respect.' In gratitude for this gesture Kádár made a point of reaffirming his loyalty to the USSR, 'our liberator, ally, true friend and greatest helper in all areas of life'. At the same time, he gave the additional assurance through Central Committee Secretary, Komócsin, that in the event of a conflict of interests Hungary's national interests, would always come second to the common interests of the Socialist Bloc.

It was at this conference that Kádár expressed the opinion, 'that the time is not yet ripe to proclaim our country a Socialist republic. We believe that it is preferable to get on with the construction [of Socialism] and worry about the change of name later.' Nevertheless, the government did not hesitate to show that it was prepared to depart from the well-worn path of restrictive Communist internal policy and place its trust in its citizens' political maturity. It introduced a modest measure of local self-government subject to state supervision (Law I of 1971), made spectacular trade deals with the West, raised a long-term loan on the Eurodollar market, improved relations with the Catholic Church and the Vatican and relaxed travel restrictions to all foreign countries. At the same time, emergency measures were required to deal with obvious imbalances in the economic reform. The solutions proposed at a conference in October 1971: the abandonment of disastrous investment projects, the combatting of the shortage of skilled workers and the reduction of the country's growing foreign trade deficit proved so successful that Kádár was able to give the first 'all clear' in February 1972. He promised that the NEM would continue with certain modifications and that greater attention would be paid to achieving social justice.

These economic difficulties resulted in a short-term cooling of relations between the Soviet and Hungarian Communists. The Kremlin appeared to be particularly annoyed by Hungary's efforts to establish normal relations with the People's Republic of China and Albania 'at an official level'. Also, compared with Budapest Moscow had other ideas concerning the pace and aims of Hungary's economic and social reforms. Even Kádár, who was summoned to Moscow from 11 to 14 February 1972, could not sweep these differences under the carpet. This was certainly the reason why he made a point of signing a new Treaty of Friendship and Mutual Support during a subsequent visit to Rumania between 24 and 26 February. Its formulation of Hungarian foreign policy went a great way towards accommodating Bucharest's position, but, in an exchange of official greetings Kádár knew how to dilute Ceausescu's demand to respect the individuality and independence of every nation by adding to it his desire for 'increased cooperation on all levels within the Socialist Bloc'.

The extent of the Kremlin's annoyance at these intensified contacts can be seen from the fact that the Soviet press for the first time made no mention of the obligatory declarations of friendship when Hungary celebrated its liberation on 4 April 1972. Instead, the Hungarian party and government were warned not to 'revert to bourgeois nationalism'. Also, premier Fock's trip to Moscow on 27-28 March 1972, during which he requested additional consignments of Soviet raw materials, produced no conciliatory outcome. But the fears of the 'dogmatists' that a coup by political revisionists was imminent in Hungary, to prevent which an attitude of intransigence was required, proved to have no substance. Kádár was firmly in control and assured his Moscow comrades that his country would contribute to the political and ideological unity of the community of Socialist states as long as his government was allowed to press on as planned with its urgent policy of internal reform.

The Hungarians openly admitted encountering difficulties in implementing their economic reforms and it proved impossible to fulfil the plan's targets. There was a further increase in Hungary's foreign trade deficit with western industrialised countries and the general living standard failed to rise. These factors, together with the fact that Hungary depended greatly on imports of raw materials from the Soviet Union, eventually forced the Hungarian government to improve its strained relations with Moscow and to slow down the pace of reform. The first indication of this change came with the National Assembly's approval on 19 April 1972 of a constitutional amendment (Law I of 1972) which strictly observed the constitutional norms established in the Soviet sphere of hegemony. Although, contrary to expectations, the People's Republic of Hungary was still not transformed into a Socialist republic, it was, however, proclaimed a 'Socialist state' on account of the prevailing characteristics of its social system, especially property and class relationships. Among the relatively insignificant changes to the re-wording of the text of the 1949 constitution, it was noticeable that the party's claim to a monopoly of leadership extended only to society and no longer to the state: 'The Marxist-Leninist party of the working class is the leading force in society' (para. 3). True, the powers of the Presidium, which functioned as a substitute parliament and collective head of state, and whose decrees had to be ratified by parliament only in retrospect, were only very slightly diminished. Nevertheless, attempts were still made to anchor the position of the Council effectively in the constitution and give more emphasis to the triple function of the local soviets as organs of popular representation, of self-government and of political administration (para. 43). The passage of a law (Law IV of 1972) on the structure of the judiciary introduced after the revision of the constitution, as well as a new law on state prosecutions (Law V of 1972), a new criminal code (Law I of 1973) and a supplementary amendment to the civil law code (Decree 26 of 1972) amounted to a sweeping legal reform which went a long way towards conceding the citizen full legal rights and guaranteed a proper system of law-courts. The government's apparent tendency to continue with the liberal course it had embarked upon, while fully upholding the necessary principles of a Communist one-party state, was put in perspective by the Central Committee's official publication Pártélet (Party Life), when it asserted that the class struggle was by no means over in Hungary. The struggle against both 'right' and 'left'-wing deviance, against the dogmatists, party factions and revisionism, had to be systematically carried on.

This warning was given concrete form in a decree issued by a plenary executive meeting of the Central Committee in November 1972. Despite the country's difficult economic situation, it ordered substantial wage rises for 1.3 million workers in industry and the building trades, while at the same time declaring war on 'bourgeois manifestations' and 'ultra-left views' which were to be eradicated on account of their inherent 'anti-Socialist tendencies'. When on 15 March 1973, the 125th anniversary of the revolt against Habsburg rule, a 'nationalist demonstration' was held in Budapest, the party judged that the time had come to deal with its main critics. The sociologist, Andrés Hegedűs, prime minister in the last phase of the Rákosi era, and the philosophers János Kis and Mihály Vajda were expelled from the party in the middle of May on charges of 'serious errors' and their lack of self criticism. Not long afterwards four more prominent sociologists, Á. Heller, G. and M. Márkus and G. Bencze were forced to leave the party. Artists and scientists, in particular, like the writer, G. Konrád, the sociologist, I. Szelényi, and the poet, T. Szentjóby, had to suffer under an ideologically tougher and more orthodox cultural policy, while the majority of the population and the pampered technocratic intelligentsia were initially spared any major restrictions.

But Hungary's economic problems and the Kremlin's constant warnings that it would not tolerate any developments which might damage the Communist Party's leading role or produce a political climate comparable to Czechoslovakia in 1968 made it necessary to intervene in the NEM reforms. This primarily meant giving the central planning authority wider powers once more, especially in determining prices and incomes policy and investment priorities. On 28 June 1973, a new State Planning Committee was set up, chaired by the then minister of labour, György Lázár. Substantial increases in the cost of food, rents and public transport were accompanied by further wage increases and the reduction of retail prices on selected consumer items in order to keep up the morale of an increasingly disillusioned population.

When Brezhnev visited Budapest at the head of a Soviet party and government delegation between 27 November and 1 December senior Hungarian officials felt obliged to quash rumours that serious Soviet-Hungarian differences had emerged during negotiations on the long-term importation of Soviet raw materials. The Soviet leader's gesture of awarding Kádár the distinction of the Order of Lenin for the second time in honour of his struggle against counter-revolution was intended to dispel once and for all reports of disagreement which were played up in the western press. At any rate, the party felt obliged to agree to the Soviet desire for increased bilateral contacts 'at all levels' in the interest of increasing the imports of raw materials from the USSR and announced that it was entirely willing to increase 'cooperation on economic matters between the ministries, parliaments and political and social organisations'. After the usual meeting of east European party chiefs and heads of government in the Crimea in August 1973, intensified negotiations on matters of economic cooperation and joint agreement on economic strategy for the period 1976-1980 eventually resulted in both sides considerably bridging the gap between them by the late autumn of that year.

the Soviets' willingness to compromise on the economic front. On 15 December 1973, Hungary's long-serving foreign minister, János Péter, a trained Calvinist theologian who had often tried to establish greater cooperation between smaller countries regardless of their social system, was replaced by his former secretary of state, Frigyes Puja. Puja's first action as foreign minister was to establish full diplomatic relations with West Germany on 20 December. But of much greater significance was the decision taken by the Central Committee on 27 March 1974. This removed the Central Committee secretary for economic affairs, Rezső Nyers, and the relatively liberal secretary for culture and ideology, György Aczél, from their posts and forced the retirement of the Politburo's number three man, the agricultural expert and deputy prime minister, Lajos Fehér. Nyers' transfer to the post of director of the Institute of Economics of the Academy of Sciences, together with Aczél's effective demotion on being appointed one of the deputy prime ministers, and further personnel changes in the Central Committee Secretariat and the government also appeared to mark a radical departure from the government's economic policy and the end of Hungary's liberal cultural climate. The party leaders, and Kádár especially, felt compelled to act against widespread fears of an impending return to the 'dogmatism' of the past. Politburo member, Z. Komócsin, launched the new campaign in an article entitled "'Vdltozatlan politikával' (No change in policy)" which appeared in the party newspaper Népszabadság on 23 March 1974. In a statement of principle, delivered in a speech in Nyíregyháza on 28 March, Kádár assured his audience that the government would continue with the policy it had pursued up until now, regardless of party personnel changes in several areas: 'Our domestic and foreign policy remain the same. Our tried and tested system of economic planning is being retained, although its practical implementation has to be improved in every area.' Moscow's suspicions that Hungary might travel too far along the road towards becoming a western-orientated consumer society and doubts about the effectiveness of ideological slogans in the lead-up to the negotiations of the Conference on European Security and Cooperation, forced Kádár, who more than ever found himself the central figure in the tensions between ideology and continuity, to give in to Soviet pressure just enough not to have to call a halt to reform Communism.

Although it was already clear by this stage that the unrealistic targets of the Fourth Five Year Plan, due to run until the end of 1975, could not be fulfilled, the population did not have to put up with too much austerity, despite regular, though modest price rises. Enterprises allowed a relatively large measure of freedom in decision-making and interested in signing cooperation agreements with western companies, remained unaffected, even though Hungary was once more closely tied down to working within the framework of Comecon agreements on the common industrial development of eastern Europe and its future economic strategy. The exaggerated expressions of warmth and 'full mutual agreement' at every bilateral meeting of party and government chiefs were not, however, sufficient to allow Kádár -- who judged the population's mood exactly -- to forget his countrymen's reservations towards Soviet domination. In view of Hungary's great dependence on Russian consignments of raw materials, together with a chronic shortage of foreign exchange and the country's advanced integration into Comecon, Kádár was forced to rule out any possibility of going it alone economically and was prepared to accept certain restrictions in order to avoid even more far-reaching demands, not to mention another Soviet intervention in Hungary's internal affairs. Attempts by Nyers' Politburo successor, Károly Németh, during a visit to Moscow in early September 1974, to convince Soviet economic experts and Brezhnev himself of the need to maintain and even expand Hungary's trade with the industrialised West obviously failed. When three weeks later, a Hungarian party and government delegation led by Kádár and Fock made an official friendly visit to Russia between 25 and 30 September, a communiqué was issued to the effect that opportunities to realise integration would have to be more effectively exploited. It was not difficult to see from its wording that there were still unsolved problems concerning agreement on the economic aspect of cooperation. The Hungarians almost certainly also expressed reservations about Soviet expectations of greater Socialist Bloc integration at the expense of their country's trade with the West.

In his leadership address to the MSzMP's Eleventh Party Congress, held between 17 and 22 March 1975 in the Ferenc-Rósza Cultural Centre in Budapest, Kádár thought it necessary to make a further pledge of loyalty to Hungarian-Soviet friendship in Brezhnev's presence: 'We regard the strength of our indissoluble fraternal friendship with the Soviet Union as especially important. It gives us the greatest satisfaction that Hungarian-Soviet relations have been deepened and extended to all areas; that they have uccessfully served the common interests of our countries and their peoples, and strengthened our alliance, cooperation and friendship.' In an express reference to the 30th anniversary of the 'liberation of our homeland by the Soviet army' (4 April), the congress delegates voted unanimously on a new resolution for inclusion in the party programme. This was the 'decree on party work und further tasks', which aimed at a more committed application of ideology not only as regards the party, but government activity and every sphere of public life. Recognition of the workers' importance, their increasing influence on internal management decisions, the appointment of a growing number of manual workers to important positions in the state and party machinery and the step-by-step assimilation of all sections of the population into the working class were proclaimed as the most important goals for the future. Although G. Aczél was re-elected to the new thirteen-man Politburo, the four new members of this leading body: the increasingly prominent deputy prime minister, Lázár, the First Secretary of the Communist Youth League, László Maróthy, Central Committee Secretary, Miklós Óvári and the Patriotic Popular Front's General Secretary, István Sarlós, ensured that the government's reform policies, though not entirely halted, would not receive any fresh impetus for the time being.

The official announcement on 15 May 1975 that the prime minister, Jenő Fock, had resigned on health grounds was greeted with widespread astonishment. Fock, who had only recently been elected to the Politburo, was replaced by his previous deputy, György Lázár, who had been his permanent representative in Comecon and was regarded as a critic of the liberal NEM policy. In the May 1975 issue of the party's intellectual journal Társadalmi Szemle (Social Panorama) Lázár catalogued the NEM's weaknesses, rendered even more acute by the effects of an economic recession in the West, and suggested as a solution 'the more systematic pursuit of the [party's] political and economic line . . . at the same time as raising productivity' and 'participating even more actively [in Comecon's] international division of labour'. The newly elected National Assembly of 15 June 1975, which saw the Patriotic Popular Front candidates returned with the approval of 99.6 per cent of the electorate, unanimously approved Lázár's new government with its many ministerial changes when it was officially announced on 4 July. Two days previously a plenary executive meeting of the Central Committee had appointed two more members to the Politburo: deputy prime minister, István Huszár, and Presidium chairman, Pál Losonczi.

In the mid- 1970s, Hungary's standard of living continued to rise as a result of an annual increase of as much as 6 per cent in real incomes. There was an initial wave of mechanisation, accompanied by a sudden growth in meat consumption and a new spate of building construction, albeit still inadequate to cover needs. However, these developments appeared threatened, as long as the government did not succeed in resolving the 'differences in the method and extent of economic cooperation', repeatedly mentioned in communiqués issued after bilateral meetings with the Soviet government. The prices of raw materials demanded by the Soviet Union for the new period of the Five Year Plan and the small returns produced by Hungarian products threatened Hungary's economic growth and produced the prospect of greater internal social conflict. The party chief, Kádár, who, even in the eyes of the Soviets, was the only guarantee of Hungary's internal political stability, was demonstrably annoyed by frequent party infighting and public discussion of a potential successor and grew increasingly tired of office. On reaching the end of his 65th year in 1977, he indicated his intention of retiring from politics. As a result of this threat but thanks also to Lázár's proven negotiating skills, the Soviets agreed to sign an agreement on 27 March 1976 which linked the prices to be paid for Soviet raw materials to the profits from Hungary's industrial and agricultural exports for the next decade.

By 1978, the Fifth Five Year Plan, which aimed at increasing Hungary's national income by 30 to 32 per cent, its total industrial production by as much as 35 per cent and the population's real income by 18 to 20 per cent, had resulted in a rapid increase in production. However, the sudden growth in western imports was partly responsible for a worrying deterioration in the balance between the country's external and internal economic performance. In order to check excess demand, consumer prices were subjected to sharp, regular increases, while real incomes remained relatively static. On 1 January 1977, a tax reform was also introduced to help prevent the growth of economic disparities. It allowed considerable exemption from duties paid on profits from agricultural side-line activities, while making the profits of small private firms liable to a strict progressive tax. The same end was served by a reformed prices policy, introduced from the 1980s onwards, which regulated the cost of raw materials according to world market prices and forced state enterprises to operate under the rules of the free market economy, even in the domestic market.

However, the overall economic stability achieved by these measures restricted economic growth, with the result that the Five Year Plan's quotas could not be fulfilled in every area. For example, the national income rose by only 17 per cent overall and real per capita income by a total of only 8 per cent. For the first time Hungary's debts to the West exceeded 7 billion dollars. The economic cooperation agreements which Hungarian enterprises signed with over 400 West German and approximately 100 Austrian companies led to a considerable expansion in trade with the West and more cooperation in exploiting other markets. Agriculture, the economy's specific problem sector up until the 1970s, did relatively well in terms of production. After 1977 the agricultural collectives were encouraged to merge and eventually numbered 1,338 production units of an average size of 4,000 hectares, a development which helped meet the growing demand for foodstuffs even after a series of moderate harvests. In 1980, for example, Hungary's agricultural exports earned approximately 2 billion dollars. The combination of large-scale state collectives producing on an industrial scale and 1.7 million privately owned competing farms, mainly comprising fewer than 0.4 hectares and employing several million people producing about 50 per cent of essential foodstuffs on a part-time basis, proved to be an invaluable asset.

This generally positive development in Hungary's national economy, particularly compared with the growing economic problems encountered in other east European Communist countries, was based on a flexibly managed framework of economic planning and independent company initiatives. It was accompanied by surprisingly undoctrinaire measures in both internal and foreign policy. The publicity shy, soberly realistic and purposeful Kádár increasingly allowed his government greater freedom of action and respected the decisions of organisations and bodies appointed for the purpose of implementing policy. Every official who did not agree with his carefully considered and singularly 'middle course', could expect to be removed from his post. The First Secretary of the party repeatedly declared his willingness to cooperate with anyone, regardless of his views, as long as the latter was 'not hostile' towards Socialism. But he also did not hesitate to carry out his warning to act decisively against those 'who -- counting on a deterioration in our situation -- wish to undermine our achievements and ignore our laws'. The moderate political reforms which accompanied his economic policy and which were primarily based on his countrymen's material needs gradually gave rise to a more liberal climate. On 18 March 1976, a new military service law was passed which reduced the period of compulsory military service from 36 to 24 months (only 18 for students) and on 19 December 1980, the period of service was universally reduced to 18 months. The decree issued by a plenary executive meeting of the Central Committee on 26 June 1977 proved to be of even greater significance. This permitted more cultural freedom, since Kádár's party did not see its task in terms of imposing opinions, but regarded a measure of pluralism and the freedom of party members to express their opinions as both constructive and necessary. Unlike the other Socialist countries of eastern Europe, Hungary had no official censorship, although the controlling organs of the state and the party saw to it that the guidelines laid down according to the celebrated 'three T's -- támogatott (supported), tűrt (tolerated) andtiltott (banned) -- were followed. Total control of the mass media and the cultural administration's dependence on the party guaranteed that no-one overstepped the permitted threshold of tolerance.

The workers also gained themselves a hearing following the implementation of the second round of NEM reforms. They not only demanded more freedom of information and honest government to help improve their understanding of the political and economic decision-making processes, but pressed for a greater degree of industrial democracy. The ground rules on workers' participation in the management of firms, laid down in a joint resolution of the Council of Ministers and the Central Council of Trade Unions, essentially limited participation to the signing of collective agreements and social welfare policy. As a result, the power of decision-making on questions of production and type and quality of product still remained entirely in management hands. When the workers were forced to accept a decline in the purchasing power of their real earnings as a result of slower economic growth and the regular fixing of prices according to production costs, the workers began to adopt a more realistic attitude. The leaders of the trade unions and the party reacted swiftly in order to avoid a similar situation arising to that in Poland. At the party's Twelfth Congress, held in Budapest in late March 1980, Sándor Gáspár, the General Secretary of the Central Council of Trade Unions made it clear that his organisation no longer regarded itself as the go-between of party and government, but rather as the representative and protector of the workers' interests. In this connection the trade unions also demanded more dialogue and a greater measure of democracy: 'We can best strengthen the country's economic power, if we rely on democracy, on the clash of opinions and interests, and on the increased participation of the working population.' The tendency to allow the trade unions to represent the workers on specific issues affecting them within the framework of a Socialist system, and thus recognise a certain plurality of interests, emerged clearly in 1980 at the congresses of individual trade unions representing different branches of industry held in advance of the Twenty-Sixth Trade Union Congress, which took place between the 12 and 14 December of that year. In speeches made during the congress and in a resolution passed by the delegates, the view was expressed that trade unions possessed a controlling function in a Socialist society, especially the task of protecting the workers' interests independently of party and government. The demand was raised to create machinery to hear workers' grievances against decisions which directly affected their living standards, and the government was called upon to make conditions easier by exercising stricter price controls and introducing a five-day week. After 1 July 1981, steps were taken to make a five-day week a possibility. This was generally introduced after the beginning of 1982 when the average working week was reduced to 42 hours.

This development, which coupled the rewarding of good performance by incentive payments with consistent maintenance of the government's general reform policies, had its critics. But Kádár knew at every stage how to keep the sceptics in check. In April 1977, the head of the Central Committee Secretariat, József Sándor, was forced to make way for István Katona, the former chief editor of the main party newspaper Népszabadság, who was replaced in turn by the rector of the Party Academy, Dezső Nemes. An even greater stir was caused by the decision of a meeting of the Central Committee on 19 to 20 April 1978 to sack the 57-year-old Central Committee Secretary and Politburo member, Béla Biszku. His duties as head of the influential department in charge of party administration, party cadres and mass organisations were taken over by the economist, Károly Németh. A skilled toolmaker by trade, Biszku, who had been a Politburo member since 1957, Central Committee Secretary for security affairs since 1962 and subsequent head of the influential party cadre in charge of the party's records, was regarded more as Kádár's deputy than as his potential successor, the latter role now seemed to fall to Németh. Born in 1922, he had been a member of the Politburo since 1970 and until 1974 had held a powerful position at the head of the Budapest party organisation. The former deputy prime minister, Ferenc Havasi, assumed responsibility for the continued implementation of economic reforms, because only this former skilled cement worker and long-serving party secretary in the Danube town of Komárom was attributed with the capacity to tackle the effects of the world-wide recession on Hungary's economy. Kádár subsequently made it clear on several occasions that the personnel changes which also took place among the middle and lower ranks of the party were a 'normal development': 'We must ensure a regular change of party personnel appropriate to changing needs while preserving necessary stability. Democracy in our society is also demonstrated by the fact that the leadership is constantly enriched by new personnel.'

Even more sweeping personnel changes were subsequently decided upon at the party's Twelfth Congress, held between 24 and 27 March 1980. With the sanction of the 764 delegates, representing 811, 833 party members in all, Kádár took it upon himself immediately to dismiss five of the fifteen Politburo members and to undertake a major shake-out of the 127-man strong Central Committee. As well as Béla Biszku and former premier, Jenő Fock, even the 48-year-old chief of planning and deputy prime minister, István Huszár, had to give up his post. Huszár had shown himself to be a committed economic reformer and had won considerable respect from the Hungarian public as a result of his outspoken criticisms, but lacked a power base within the party. Since Huszár was not made a scapegoat for Hungary's difficult economic situation, despite planning mistakes which prime minister Lázár also openly admitted, one may conclude that he was sacrificed mainly in order to appease Hungary's Soviet allies. For, at the same time two dogmatists of the old school, the President of the National Assembly, Antal Apró, and the ideologue, Dezső Nemes, who had always sided with whichever was the stronger faction, were also forced to give up their seats on the Politburo. The three new members -- Mihály Korom, who was made Central Committee Secretary in charge of security, Lajos Méhes, the Budapest party chief and Havasi were regarded as reliable Kádár supporters. Kádár, who was himself confirmed in his position as First Secretary, set about reducing the Central Committee Secretariat from seven to five members.

In addition, a number of important personnel changes took place in the government following the National Assembly elections of 8 June 1980. Although a 'mere' 97 per cent of the electorate cast their vote, 99.3 per cent of unspoiled votes were polled in favour of Patriotic Popular Front candidates. At the same time, the government

tried to improve bureaucratic efficiency by merging the ministries into bigger units. As was to be expected, the chairman of the State Planning Council, Huszár, after losing his Politburo membership, had to vacate his government post and was replaced by the former finance minister, Lajos Faluvégi. Apart from Lázár, whose position as premier was unchallenged, his deputy, György Aczél, was the only government minister to hold on to his position in the Politburo. Lázár argued that the tendency to separate the machinery of party and state was in keeping with the government's reforms, since these were intended to liberate economic development from political constraints, especially as regards the selection of personnel. Although Kádár, whose strict Calvinist morality led him to criticise the personal affairs of the defence minister, Lajos Czinege, knew how to prevent this military man, whom Moscow held in high regard, from joining the Politburo, he had to retain him in the government because of his Soviet backing. But he was not able to persuade the unpopular and increasingly isolated foreign minister, Puja, who also had Kremlin backers, to give up his post until 7 July 1983. He was replaced by Péter Várkonyi, a former chief editor of Népszabadság who, from 1982 onwards, was head of the Central Committee Secretariat with responsibility for international affairs. As early as 23 July 1982, Kádár's loyal supporter, György Aczél, who had been ousted as Central Committee Secretary in 1974 at the Soviets' insistence, replaced the 'dogmatist', András Gyenes, as head of the Central Committee departments responsible for cultivating contacts with other Communist parties.

This office was particularly important, since Hungary's independent path towards Socialism was viewed with extreme suspicion both in Moscow and in the other capitals of the east European Communist countries where it was regarded with considerable reservation. But Hungary's foreign policy was entirely directed towards the specific problems of the Socialist Bloc and the country played a constructive and committed role within Comecon and the Warsaw Pact organisation. It gave its backing to every Soviet initiative and supported, albeit with a certain degree of reservation, the Soviet Union's position within international bodies such as the United Nations. Indeed, Kádár and the Hungarian party attached the greatest importance to Hungary's bilateral relations with the Soviet Union and fellow Socialist countries at both party and governmental level. Thus, it was hardly surprising that several meetings took place annually between Brezhnev and Kádár, the Soviet prime ministers Kosygin and Tichonov and Lázár, and the foreign ministers, Gromyko and Puja. Apart from political issues of general interest, the entire problem of European security and agreement on long-term economic strategy and the exchange of the goods figured prominently in discussions. Hungarian units played an increasing part in the common Warsaw Pact manoeuvres, which took place on Hungarian territory; the 1979 manoeuvres, codenamed 'Shield', being a case in point. Thus, with the possible exception of Rumania, contacts with other Socialist countries remained close and were built upon by regular consultations between both party and government officials.

The mistrust which the Socialist Bloc countries showed towards the Hungarian experiment no doubt arose from the fear that the party risked losing its control over the process of gradual liberalisation and a situation might then have been created in which its monopoly of power was challenged. The Hungarian Communists were reminded of the events of 1956 and warned against allowing any socio-economic and political climate to arise which would force fellow Socialist states to intervene in order to put the country back on the rails. The internal political freedoms which were granted to Hungary caused both concern and no doubt envy in the other Socialist countries; an example being Kádár's sympathetic remarks on the 'Eurocommunism' of the West European Communists. In the discussion which suddenly emerged in 1976-77 on 'separate paths' towards socialism and the role of the dictatorship of the proletariat, the Hungarian party moved substantially towards adopting the Italian Communist Party's position. A Central Committee resolution of 20 April 1978, expressly stated, 'that the realisation of the different historical tasks faced by each Communist and workers' party in different countries' demanded that each 'evaluate the concrete circumstances and stipulate the tasks' ahead of them. 'We regard it as natural that the parties decide their own strategy and tactics for themselves.' On 19 November 1978, during the celebrations to mark the 60th anniversary of the founding of the Hungarian Communist Party, Kádár also declared that 'on the basis of our experiences the theory of Marxism-Leninism is an indispensable weapon in the revolutionary struggle of the working class. It is also well known that the theory of Marxism-Leninism is not a dogma but a guide to action and to the concrete analysis of concrete situations.' At its Twelfth Party Congress the First Secretary was nevertheless able to record with satisfaction in his summary address on 24 March 1980, that 'The party's leading role is a reality in the life of our society. Its relationship with the masses is one of mutual trust. The party's policies have the active support of our people.'

On the other hand, it was Kádár's open admissions that nationalist, cosmopolitan, revisionist, ultra-left and other dangerous views' still existed in Hungary and his avowals that there was no reason to remain content with the 'Socialist democracy' which had been achieved that caused the Soviets to reveal their anxieties. Hungary's increased contacts with capitalist countries, the noticeable reserve with which Hungary viewed Russia's intervention in Afghanistan, developments in Budapest's close ally, Poland, Soviet condemnation of China's heretical Communists or the USA's I warmongering actions', caused the Kremlin to point at every opportunity to Hungary's major economic dependence on imports of Russian raw materials and insist on even closer cooperation within the framework of Comecon. In 1981, the Soviet Union alone absorbed 29.3 per cent of Hungarian exports and Hungary's eastern European trading partners accounted for a further 24.1 per cent. These countries also supplied 27.7 and 21.8 per cent of Hungary's imports respectively. Kádár did not shrink from resisting these massive attempts to apply intimidating pressure. On several occasions, including his final speech to the Twelfth Party Congress, he placed conspicuous emphasis on the sovereignty and independence of Hungary which itself decided all matters concerning policy. At the same time, however, he also made reconciliatory remarks concerning the value 'of close cooperation and the consultation and exchange of views with fellow Socialist countries, especially with the Soviet Union'.

The considerable respect which Kádár had gained over the years was amply demonstrated by his visits to western capitals. Talks in Bonn ( 4-7 July 1977, 26-8 April 1982), Rome ( 7-9 June 1977) and Paris ( 15-17 November 1978) were of major importance in terms of the agreements on economic cooperation which they produced. Relations with Austria became mutually profitable and warm for both sides. Not only did the leading politicians of both countries meet for regular consultations, but the abolition of visa requirements also encouraged normal tourist traffic. Even greater satisfaction was felt at President Carter's decision to allow the holy crown of St Stephen, which, together with the royal regalia, had been removed to the USA as a spoil of war, to return to Hungary. This legendary symbol of the concept of a Hungarian state and separate national identity was brought back to Budapest by a delegation headed by the US foreign secretary, Cyrus Vance, on 5 January 1978. The entire nation was also filled with pride when it learnt that Bertalan Farkas had become the first Hungarian cosmonaut to travel in space on board Soyuz 36 between 26 May and 3 June 1980.

Despite Kádár's unchallenged moral authority at home and the fact that his pragmatism and sense of realism had created significant freedoms for Hungary's citizens, the weaknesses of the system he represented and the dangers it faced had become increasingly obvious by the 1980s. Although his economic reforms had been only half-heartedly implemented in order not to antagonise Hungary's Socialist neighbours, they had set Hungary on the way to becoming an industrialised country with a strong agricultural sector. They had not, however, removed the consequences of those mistakes of the Stalinist era which had determined the country's industrial development in the post-war period.

There was also a great deal of uncertainty as to whether an internal power struggle over his succession would upset the political stability which Kádár had achieved during his time in office. Any such struggle might result in a period of confusion which would endanger the Hungarian experiment of embarking on a separate 'national' path to Socialism, and would adversely affect Hungary's position within the Socialist Bloc.

Given the danger that a sudden slowing down of the pace of reform might reopen the gulf that existed between the party and the population, the government thought that the only real guarantee of peace at home lay in maintaining the new freedoms or even developing them further. Every effort would have to be made to spare the population any reduction in the availability of consumer goods. But the greatest risk to Hungary's reforms came from the policy of confrontation which the stultified Soviet leadership under Brezhnev was pursuing in East-West relations. This policy had been partly responsible for NATO's decision to close the gap which had been opening up in the arms race, and there was no telling when the Kremlin might insist on a return to stricter ideological conformity and complete obedience to its authority within the Socialist Bloc. It was also difficult to estimate the effects which western European moves towards greater economic and political integration might have on Hungary. Its politicians and economists had to take all these factors into account as they tried to speed up the pace of the country's modernisation.






The greatest challenge the Hungarian government faced after 1980 was the problem of creating a balanced and stable economy. After thorough consultation with Soviet planners a Sixth Five Year Plan was implemented on 1 January 1981. But hopes that this would achieve greater economic stability and maintain the standard of living by improving economic efficiency and shifting the emphasis of production in favour of more profitable products for the international market proved illusory. It was clear within its first two years of implementation that performance levels had not been sufficiently raised to increase per capita income to the extent the planners had envisaged. The consequence was that the average annual increase in the price of consumer items caused a decline in purchasing power of 4.6 per cent per annum in real terms. Since less capital was available for investment, the only prospect of stabilising the economy was to improve profitability and raise productivity. Hungary's economic experts were confronted by a growing number of difficult problems: the industrialised West, undergoing a period of recession and high unemployment, adopted protectionist policies; Hungary's Socialist partners, including Poland and Rumania, failed to deliver promised consignments; and at home increased private consumption exceeded the planners' estimates as a result of the population's overwhelming desire to convert earnings into hard goods.

With a foreign debt amounting to almost 9 billion US dollars in 1982 and an acute shortage of foreign exchange threatening the repayment of interest and capital on loans from the West, the government's successful application to join the International Monetary Fund on 6 May 1982 and Hungary's membership of the World Bank, announced on 7 July 1982, helped overcome the country's immediate economic problems by means of short-term borrowing. But the impact of the credit crisis forced the government to take action in late 1982 to reduce its net debt by a further drastic reduction in investment, surplus stockpiling and increasing industrial development funding. These measures were also accompanied by price rises and, more importantly, import restrictions. But by successfully increasing its exports to Comecon countries by 3 per cent, along with its exports to developing countries, Hungary managed to achieve a foreign trade surplus of approximately 500 million dollars in 1982. However, the country's main source of foreign earnings, agricultural production, suffered a severe drought in 1983 and drastic import reductions allowed industrial production to rise by only 1.1 per cent. As a result, Hungarians experienced a marked fall in their standard of living. Against a background of inflation running at 7.8 per cent, average earnings rose by only 4.4 per cent. It seemed that only fundamental reform of the entire economic system could halt the long-term decline of the economy and bring about its successful long-term reorganisation.

On a visit to Moscow between 18 and 23 July 1983, Kádár managed to win the support of the new Soviet Communist Party leader, Yuri Andropov, for further economic reforms. Thereafter Hungary's party leaders and political economists drafted a number of new reforms for the second half of the 1980s. These were approved by the Central Committee on 17 April 1984 and subsequently passed by the Council of Ministers on 10 May. The main objective was to introduce a 'regulated market' which would combine the advantages of individual private enterprise and a market economy with the necessary degree of centralised state control required to realise the government's macro-economic and political aims. Priority was given to restructuring economic institutions, while at the same time redefining and reorganising the state's economic role. State-owned companies were allowed to operate with far greater freedom and the scope for ministerial interference in business activities was reduced. The government also encouraged the break-up of large industrial concerns, competition was intensified and companies were made to bear greater market risks. The setting up of small businesses under various forms of ownership was also promoted, while credit and capital facilities were improved to stimulate innovation. In both Hungary and several neighbouring countries reservations were, however, immediately expressed concerning the direction taken by the Hungarian reforms. It was feared that the policy of austerity and government cutbacks aimed at achieving economic stability would inevitably result in the appearance of a gap between intention and reality in the so-called 'Hungarian model'.

Party and government insistence on improving Hungary's foreign trade balance, reducing its foreign debt by stimulating exports and producing import substitutes at the cost of falling incomes and reduced private consumption proved relatively ineffective. About 2.6 billion dollars, representing 58 per cent of export earnings, had to be used to repay capital and interest payments on the country's 11.8 billion dollar foreign debt. At the Thirteenth Party Congress, held at the end of March 1985, Kádár admitted that his government's consistent policy of austerity had resulted in an overall drop in the standard of living, and that alongside pensions and social benefits the value of wages had also fallen in real terms. The Seventh Five Year Plan, which incorporated the new reforms, failed to fulfil expectations. The government had promised to achieve a 17 per cent increase in the national income, a 15 per cent increase in industrial production and wage increases of up to 18 per cent. By mid-1986, however, earnings had risen by 7.2 per cent while industrial production increased by only 1.2 per cent in the same period. The national budget deficit grew from 14 billion forints in 1985 to 45 million in the following year (6.6 per cent of total government revenue). In the same period the foreign trade deficit rose to 30.3 billion forints.

Between September 1983 and January 1985 drastic price increases on basic foodstuffs, services and utilities resulted in a rise in the cost of living. Transport rose by 60 per cent, energy by 30 per cent and dairy products by 28 per cent, but without any significant effect on the budget deficit. In the hope of further reducing state control in favour of market forces and private enterprise, the government carried out its threat to close down unprofitable businesses, create redundancies and break up large-scale concerns into smaller, more manageable medium-sized firms, but these measures also failed to revive the economy. Thus, at the Twenty-Fifth Congress of the Hungarian Trade Union Federation on 14 February 1986, its chairman, Sándor Gáspár, himself a Politburo member, sharply criticised the government's economic strategy, accusing it of encouraging inflation, reducing purchasing power and causing pensioners considerable hardship. He also condemned the reduced status of the 200,000 members of the technical intelligentsia who had once been highly valued but were now forced to supplement their falling incomes by taking on a second job outside their normal full-time employment.

By the early 1980s the government felt obliged to legalise the so-called 'black economy', thus acknowledging the existence of a viable alternative economy operating independently of bureaucratic controls. The inefficiency of the state-controlled sector had produced a situation in which about a half of Hungary's workforce had been supplementing their incomes by doing extra work over and above their normal occupations. By 1982, following the introduction of 32 new statutory regulations, approximately 11,000 small private businesses were operating independently of state control. By the end of 1983 this figure had risen to about 16,000 firms, employing 130,000 workers, mainly in handicrafts. These companies accounted for as much as 44.2 per cent of net production in the service sector and 13.4 per cent in the construction industry. According to official estimates, around 17 per cent of Hungary's national income, a third of its agricultural production and 40 per cent of its private housebuilding resulted from jobs done 'on the side'. After the 20 July 1983 private employers were allowed to employ up to six employees in private enterprises -- twelve if family members were included. Hungarians with specialist skills could accept employment in the West for a period of up to five years without having to undergo any major formalities, providing they paid 20 per cent of their earnings in foreign exchange into a Hungarian National Bank account and kept up their Hungarian social insurance contributions by paying them in hard currency. One of the most unusual aspects of the Hungarian reform model was the setting up of 'economic labour groups' within companies. Workers employed in large state enterprises worked overtime using machines and materials made available by their state employers but privately billed the customer for work done on their employer's behalf. In this way they were able to boost their monthly earnings substantially. But all these improvised methods could not prevent the fundamental failure of the government's economic policy and the growing problems it was causing.

Despite all the problems and setbacks, Hungary's politicians still believed that successful economic reforms and a greater degree of freedom were the only way to achieve long-term political stability and guarantee the party's unchallenged political control. It was vital to their success that their Soviet comrades should allow them to proceed with this strategy. Brezhnev had been very sceptical about the Hungarian experiment, expressing misgivings at every development that offended his conservative mentality. But changes in the Kremlin leadership after his death resulted in the emergence of Yuri Andropov as the new General Secretary of the Soviet Communist Party in November 1982. Andropov knew Hungary well from his time as ambassador in Budapest during the crisis of 1956 and was said to appreciate Hungary's cautious efforts at trying to improve economic efficiency and raise the standard of living. His approval, given in July 1983, to speed up the pace of the reforms was linked to the idea of applying the lessons to be learnt from the Hungarian NEM model to specific areas within the Soviet system which were acknowledged as being in need of reform -- not only in agriculture, but in industry and the service sector. However, Budapest's hope that the Kremlin's 'period of neutrality' towards Hungary's reform experiment was now a thing of the past was mistaken. During Andropov's long illness and especially under his successor, Konstantin Černenko, who guided Russia's destiny for only a year, the old reservations resurfaced. The stationing of American medium-range missiles in Europe in response to the hurried deployment of Soviet SS 20s had caused a deterioration in East-West relations, already greatly strained as a result of the Soviet military intervention in Afghanistan and the violent suppression of the Solidarity trade union in Poland which Hungarians followed with great sympathy. The Kremlin hawks now demanded greater solidarity from within the Soviet Bloc. Hungary's appeal to take the heat out of confrontation by continuing US-Soviet strategic arms limitation talks (SALT) was fiercely criticised in early 1984 by Soviet foreign minister, Gromyko, and defence minister, Marshal Ustinov. In this they were supported by the Czech Communists whose newspapers made several attacks on the 'revisionist errors' of Hungarian domestic policy. But these attacks failed to deflect the Hungarian party and government leadership from continuing its domestic reforms and pursuing a dialogue in foreign policy 'despite the stationing of American missiles in Europe'.

During the initial phase of talks on the renewal of the Warsaw Pact, Hungary's interest in expanding its trade with the West, combined with the difficulties it was experiencing in achieving its economic targets, resulted in the demand that the country should no longer have to take part in the costly Siberian or Caucasus manoeuvres. Alternatively, it was argued, Hungary should receive financial compensation in return for its participation. The Hungarian government thought it more sensible to concentrate its forces on the country's own defence needs, but to demonstrate goodwill, Hungarian army units joined Soviet and Czechoslovakian troops in manoeuvres held near the Austrian border in western Hungary in June 1984. At the same time the training of recruits was stepped up. Only after Hungary had been allowed to freeze its defence spending at less than 6 per cent of the total state budget did Kádár announce his government's full support for the renewal of the Warsaw Pact on 3 January 1985.

In March 1985 Mikhail Gorbachev was elected the new General Secretary of the Soviet Communist Party. Since he himself was looking for ways to stimulate and improve the efficiency of the tultified Soviet economy, he viewed the Hungarian 'model' in an unprejudiced light. After meeting Kádár on 25 September 1985 the official communiqué stressed the 'importance in principle of the course adopted to accelerate socio-economic development in both countries'. The Hungarians were, however, obliged to accept that an 'all-round increase in production' could be achieved only by making 'better use of the historical advantages of Socialism and all the possibilities of the Socialist planned economy' as well as by 'actively emphasising the social, ideological and spiritual values of Socialist construction, acknowledging . . . all that Socialist construction entails'. The Hungarians could not ignore this 'advice', dependent as their economy was on Soviet raw materials. At the meeting of the Political Advisory Committee of the Warsaw Pact, held in Budapest on 10 and 11 June 1986, Gorbachev had his first opportunity to form his own judgement on the situation in Hungary and the progress of its reforms. He seems to have concluded that the traditional elements were incapable of tackling the country's problems with sufficient vigour. To any observer it must have seemed that János Kádár had again held on to his unchallenged position. Whereas after the abortive 1956 Uprising his name had been synonymous with savage repression, followed by oppression and voluntary subordination to the Soviet system, as the guarantor of Hungary's relative autonomy and liberality he now commanded the respect even of former opponents whom he had once suppressed and consigned to political oblivion. Appointed General Secretary in 1985, Kádár, who quietly celebrated his 75th birthday in May 1987, let it be known on several occasions that he was tired of office and wanted to retire and enjoy his old age after thirty exhausting years of fulfilling his duties to the best of his ability. But despite his impressive powers of judgement he remained a prisoner of the ideological legacy of Marxism-Leninism, viewing Hungary's social and economic changes with growing incomprehension. It was clearly beyond his intellectual capacity to deal with the complex ramifications of Hungary's fundamental and long overdue economic reforms.

At this stage there was no sign of any agreed successor who would prove acceptable to all elements in the party. György Aczél, Kádár's loyal disciple who had long been regarded as his heir apparent, was already almost as old as his party boss. Moreover, as an advocate of Hungary's more liberal cultural policy he remained suspect in the eyes of the more orthodox party members and provincial bureaucrats. After the popular and dynamic István Huszár had been ousted from office, a group of younger economists had risen to powerful positions under Károly Németh and Ferenc Havasi who had both progressed from being members of the Politburo to the position of chairman of the Central Committee. These young men were now entrusted with the task of continuing Hungary's cautious policy of reform. Elected acting General Secretary of the party in March 1985, Németh appeared to hold the most influential position in the leadership. But the Budapest party secretary, Károly Grósz, a Kádár protégé who had risen rapidly to become a full Politburo member in 1985, entertained hopes of rising further. The small orthodox wing of the party, which warned against the 'harmful effects' of the reforms through its spokesman, András Gyenes, head of the party's Control Commission and ex-Central Committee Secretary, could only hope to exercise a more decisive influence on policy if it was given the full backing of the Soviet Communists. Following a government reshuffle in which foreign minister, Puja, was replaced by Péter Várkonyi, the senior editor of the party newspaper, Népzabadság, in July 1983 and the demotion of the long-serving defence minister, Lajos Czinege, who was highly regarded by Moscow, to one of the posts of deputy prime minister in December 1984, the pro-reform elements in the cabinet obtained an outright majority. When the Thirteenth Party Congress, held in March 1985, elected members to the new, smaller 105-man Central Committee and 13-man Politburo, the Youth League official, C. Hámori, and the chairman of the National Committee of Farmworkers, I. Szabó, were elected for the first time alongside other reformists and loyal Kádár supporters. At the same time, pro-reform elements were also voted on to the influential Central Committee Secretariat.

It certainly seemed at this stage that the internally strengthened MSzMP was still a stable factor in Hungarian society. Fluctuations in its 870,000 membership were relatively small. Occasionally members were forced to leave because of serious lapses such as dereliction of duty, irresponsible behaviour towards others, alcoholism and corruption, but more commonly membership was suspended for failure to demonstrate an active commitment. The rise in the proportion of old to young members was, however, a cause for concern, since only 7.5 per cent were below the age of 30 and the average age had risen to 47 years. Another concern was that women, comprising of only 26.3 per cent of members, were greatly under-represented in the party. At the Thirteenth Party Congress in March 1985 it was proudly pointed out that 62.4 per cent of members were workers and 10.8 per cent were peasants. White-collar workers made up a further 16.1 per cent, those in 'intellectually creative employment' 9.2 per cent and 'others' 1.5 per cent. These last three groups were over-proportionately represented. Over 800,000 young people between the ages of 14 and 28 were organised in the 25,600 branches of the Communist Youth league (KISZ), while children under the age of 14 belonged to the Young Pioneers (Úttöorők). The party-controlled Patriotic Popular Front, which included representatives of the country's churches and ethnic minorities, had 112,400 members organised into 4,000 local branches. These were mainly involved in canvassing for the party at elections and mobilising popular support for the government's social and political measures.

The national daily newspapers, like the Party's Népszabadság, the government's Magyar Hirlap, the Patriotic Popular Front's Magyar Nemzet and the trade-union newspaper Népszava, enjoyed a press monopoly and toed the party line exclusively. They, together with 1,720 other regularly published regional and local newspapers, had a daily circulation of over 3 million copies. There were also 34 weekly newspapers whose circulation amounted to over 7 million copies and 16 magazines published by various religious groups. Among these were the Catholic newspapers Uj Ember (New Man) and Katolikus Szó (Catholic News) with circulations of 90,000 and 13,800 respectively. A press law of 21 March 1986 confirmed the citizen's right to information and instructed journalists to convey, alongside coverage of international events, 'a true picture of political, economic, social and cultural life in Hungary'. Together with its control over the allocation of newsprint, the expectation that publishers would exercise self-censorship and observe relevant statutory obligations allowed the party to influence both the selection of information and the tenor of its reporting. Television, which broadcast over 100 hours on two channels each week, had gained steadily in importance as a major source of information for the general public. Yet, despite the state's control of the major instruments for influencing public opinion, protests against the Communists' monopoly of power were increasingly voiced.

One of these voices belonged to the traditional populist movement. Originating in popular defiance of aristocratic rule, it gained fresh impetus in the inter-war period and during the Second World War when the arch-conservative Horthy régime blocked every effort to bring about social, economic and cultural reform. Despite having different aims, the populists had supported the setting up of the Communist régime, only to become later the victims of major persecution between 1949 and 1953. After mid-November 1956 they resumed their opposition to the system and were attacked for supporting Imre Nagy's policies and advocating a multi-party state. After regaining some freedom in the more liberal cultural climate of the late 1960s, they began to highlight the deplorable situation of the persecuted Magyar minorities in Hungary's neighbouring states. In contrast to the party and government, who had to exercise extreme caution in foreign policy, they demanded government action to remedy the situation. They also began to focus attention on various social problems, ranging from the causes and effects of the country's high divorce rate and widespread alcoholism to the reasons for the alarming increase in mental illness and large number of suicides. Their fearless criticism of 'real existing' Socialism made the authorities increasingly apprehensive.

Also viewed with suspicion, though they long refrained from criticising official ideology, were those groups belonging to the reformist and revisionist opposition which had first emerged around 1955 and comprised mainly economic reformers, sociologists and representatives of the Lukács school. Against the demands of the Budapest school of sociologists for greater democracy and pluralism, the party stuck to its official goal of creating a monolithic society based firmly on the ideal, 'one ideology, one nation'. Only from the late 1970s onwards did the MSzMP leadership hesitantly begin to consider implementing the process of modernisation as part of the 'constructive' advancement of Marxism-Leninism, though to avoid the much feared charge of 'revisionism' the overdue political reforms were justified as an unavoidable by-product of Hungary's economic changes. At the beginning of 1984 the party announced its willingness to allow 'an even greater measure of Socialist democracy' and 'self-administration' to accompany its new ideas on economic policy. Pointing to the 'unsatisfactory development of party democracy', the party's organisational statute was amended with a view to enlarging its social basis while also increasing the independence of the party organisation and the participation of party members in decision-making. The new party statute, approved at the Thirteenth Party Congress in March 1985, no longer defined the political function and social basis of the party exclusively in terms of the 'working class'. It now allowed for the genuine prospect of developing a 'class position' for the technical intelligentsia which was being viewed as increasingly important.

n addition, a 15-man-strong Constitutional Committee began work on 6 June 1984. Its task was to help 'secure the constitutional social order' and ensure that Hungary's laws, decrees and statutory measures were in harmony with the constitution. An electoral reform, approved by the Hungarian parliament on 23 December 1983, also tried to accommodate the widespread demand for more democracy and pluralism by allowing several candidates who did not have to be members of the MSzMP to stand for election in each of the country's 355 constituencies. The much vaunted 'widening of the opportunity for the masses to participate' in elections only amounted, however, to citizens being allowed to nominate candidates other than the two nominated by the Patriotic Popular Front. When elections on this basis were held for the first time on 8 and 22 June 1985, 93.9 per cent of the country's 7,728 million registered voters decided the composition of the new parliament. In the first round, 25 of the 71 alternative candidates who stood against the party's official candidates were elected to the National Assembly. Since no one candidate gained an absolute majority in 45 of the constituencies, a second round had to be held. This took place on 22 June and resulted in the election of 18 'independents'. The relatively free nature of these elections was without parallel in any of the other Communist states of eastern Europe and won Hungary considerable respect abroad, despite the limitations and inadequacies which undoubtedly still existed.

On the other hand, the government did almost everything in its power to obstruct the work of critical intellectuals, who, like the sociologist, Ágnes Heller, tried to investigate the relevance to Hungary of social democratic or western democratic ideas of a pluralistic society. The party's desire to avoid, if at all possible, major conflict and any changes which might undermine the system's internal stability actually encouraged the emergence of a progressive reformism subscribing to Eurocommunist ideas. But since the realisation of the new ideas implied a rejection of Soviet-style Socialism, and since the adoption of a multi-party system inevitably threatened the party's institutionalised monopoly of power, they were firmly opposed by the party's more orthodox wing.

Prior to 1988 Hungary's opposition groups made no attempt to join forces nor stage any sensational incidents. Ideas encountered in academic journals, magazine articles and smaller discussion circles did not initially pose a significant threat to the régime. While the opposition was, of course, perceived as hostile, the government was content to keep it under surveillance and rarely resorted to oppressive measures. Thus, a 'second' culture which walked a narrow tightrope between being tolerated and being declared illegal was able to emerge alongside the official state-sponsored culture. After 1985, however, the government made every effort to drive illegalSamizdat publications underground. Among several loosely connected groups the oldest was Szeta, founded by Ottilia Solt. Its goal was to improve the conditions of the country's many poor people, such as pensioners, gypsies and unemployed youth, by means of public donations. Other dissident groups gathered round the philosopher, János Kis, who had been dismissed from his post in the Academy of Sciences in the late 1970s, and Gábor Demszky, whose AB publishing house published proscribed books and journals. Its monthly magazine Hírmondó (the Messenger), the underground magazine Beszélő (the Spokesman) and AB Tájékoztató (AB Information) were all publications which provided the opposition with its main platform for discussing contemporary issues. One group calling itself MO concerned itself with the events of October and November 1956, while the circle around the biologist and journalist, János Vargha, took up ecological issues and highlighted the serious evironmental damage which would be caused to the endangered forested marshlands along the middle Danube if the joint Czechoslovakian-Hungarian project to build a power station at Gabčikovo-Nagymaros were to go ahead. The various groups of dissidents, which the government lumped together by labelling them as the 'opposition', did not try to conceal their small numbers. But while only about 50 people actively organised and promoted their various causes, there were about 200 sympathisers who could be described as having been 'regular workers' and a further 500 people who acted as 'occasional helpers'. This '0.1 per cent', as the dissidents liked to call themselves, made no claim to being representative of society as a whole, but saw it as their task to encourage any sign of the non-conformist thinking which was spreading rapidly throughout Hungarian society at the time.

The relative consideration which the authorities showed towards this numerically small 'opposition' was made easier by the dissidents' own assurance that they would respect Hungary's internal and external situation and campaign primarily for 'important political goals' which they maintained could be achieved 'without shaking the foundations of the system'. Arguing that economic reforms could succeed only if they were accompanied by appropriate political changes, the dissidents called for a more significant role for parliament and the setting up of an independent committee of experts to review the state of the economy and redistribute social burdens. They called for new trade-union legislation, arguing that elected shop stewards should in future be responsible to those who elected them rather than to the party. They also suggested that arbitration procedures to settle conflicts between employers and employees should be so regulated as to make it possible to 'apply pressure legally' in the form of strike action. The government's intention to stop subsidising loss-making concerns gave rise to the suggestion that workers should either forsake their wages for a limited period or accept a temporary period of unemployment while assured receipt of appropriate social benefits. Alternatively, the company in question could be run as a cooperative. It was also argued that the state should show greater respect for the rule of law and observe strictly the principle of judicial independence. Yet, despite the fact that these suggestions were realistic, the party leadership made it clear that it was not prepared to enter into any discussion with the dissident opposition on the grounds that a dialogue with non-Communists might undermine the party's position.

Relations between the party and the Catholic Church remained relatively harmonious. It seemed very unlikely that there would be any repeat of open conflict between church and state once the government tried to unite both sides in what it described as a 'long-term and fundamental community of interest'. The clergy had managed to secure a relatively comfortable position for itself by cooperating with the régime. The long-serving head of the State Office for Religious Affairs, Imre Miklós, did, however, continue to see to it that the Church did not increase its influence unduly. The government made no concessions regarding religious teaching outside of state schools, nor in allowing the building of new churches. Complaints about the growing indifference of Hungary's citizens, their unwillingness to make personal and financial sacrifices, their consumer mentality and spiritual apathy, became common. According to a survey published by the government newspaper, Magyar Hírlap, in July 1980, 50 to 60 per cent of Magyars described themselves as 'religious', although only a third of these Christians -- about a sixth of the population -- regularly attended church services. Between 70 and 75 per cent of the country's rural inhabitants and about a third of its townspeople described themselves as 'believers'. The vast majority of Hungarians, over 80 per cent of the population, still requested church ceremonies for marriages, baptisms and funerals, although, according to the survey, only a quarter of those between the ages 20 and 29 said they believed in God. The complaint, occasionally heard even from the Catholic bishops, that the government was hampering the work of the Church was indeed justified. Although in 1982 the papal nuncio, Poggi, had reached agreement with the government on future procedures for nominating new bishops, it was not until long after the death of Cardinal László Lékai on 30 June 1986, that Pope John Paul II was able to appoint a successor, László Paskai, the former archbishop of Kalocsa, as Hungary's primate on 6 March 1987.

The Church hierarchy and the government did, however, cooperate closely in suppressing the so-called 'fundamental congregations'. These groups which arose spontaneously, mainly among the young, criticised the bishops for their apparent loyalty to the régime and no longer saw Catholicism as providing an essential ideological counterweight to the Communist state. They were consequently denounced as 'hostile to the government'. On several occasions bishops suspended clergymen who had openly expressed a commitment to this lay movement. Some priests were even arrested and imprisoned on charges of 'conspiracy and unauthorised religious instruction'. Even the Vatican felt obliged on 16 May 1983 to criticise strongly members of the 'fundamental congregations' who had spoken out against universal conscription and for the creation of a 'peace corps' alternative to national service. It was argued that by criticising the obsequiousness of the bishops and stagnation in the life of the Church and its clergy the congregations were endangering 'the unity of the Catholic Church in Hungary' and upsetting the 'good relationship between the government and the faithful'.

Two groups, in particular, deserve to be mentioned in this connection. The Bulányists, named after the Piarist priest, György Bulányi, were an active Catholic youth organisation based in Budapest. Its members were strongly committed on social issues and demanded greater freedom and genuine independence for the Church. The Regnumists, whose origins lay in a Catholic youth movement of the inter-war period, insisted on the moral and religious education of youth and concentrated mainly on giving private religious instruction. Both had links with the unofficial peace movement which was supported by young people, conscientious objectors and priests. This group sought closer contact with like-minded groups in the West.

Hungary's non-Catholic religious denominations, which were very much smaller in number, also made their peace with the state authorities and the MSzMP. This had a lot to do with the fact that the government rewarded churchmen who behaved themselves and showed a willingness to conform with generous pay-outs amounting annually to 74.6 billion forints. The largest of the Protestant churches was the Calvinist Reformed Church. Its membership numbered about 2 million, making it four times larger than the Lutheran Church with only 430,000 members. Among the remaining churches Baptists, Unitarians and Methodists formed the biggest groups. An estimated 13,000 citizens belonged to the Orthodox Church. Of Hungary's estimated 80,000 Jewish citizens, approximately 70,000 lived in Budapest. The country's 60 Jewish communities had over 30 synagogues and places of worship served by 30 rabbis. Apart from a Jewish hospital, three old-people's homes and a secondary school, the Jewish community possessed eastern Europe's last remaining rabbinical school, consisting of six professors and ten students. In June 1985 the first synagogue to be built since the Second World War was formally consecrated in Siófok on Lake Balaton. In 1987 Hungary's obvious efforts to combat any discrimination against its Jewish minority were formally acknowledged when the executive committee of the Jewish World Congress chose Budapest as the venue for its first meeting ever held in a Communist country.

But it was the situation of the Magyar minorities among Hungary's neighbours that was of much greater concern to the Hungarian leadership than the problems of a dissident opposition and coexistence with the churches. According to estimates, about 5 million Hungarians or people of Magyar origin resided abroad, including 1.3 million in the West. The latter's interests were looked after by the World Federation of Hungarians' ( Magyarok Világszövetsége) and their attitude towards their homeland could be described as one of loyalty or, at least, no longer hostility. But growing anger was felt within Hungary at the way in which the political, social and cultural rights of Magyars were being encroached upon in neighbouring Socialist countries, where they were being increasingly forced to assimilate with the host populations. This was especially the case in Rumania where the autocratic regime of Nicolai Ceauşescu was becoming increasingly intolerant of its 2 million Hungarian minority in Transylvania. In 1959, lacking any open support from Budapest, this minority had had to accept the closure of the Hungarian University in Kolozsvár

(Rumanian Cluj-Napoca). In 1967 the self-governing Magyar region, established fifteen years previously, was replaced by a new administrative region and large numbers of Rumanians were deliberately resettled in predominantly Magyar areas. The number of schools in which Hungarian was taught was systematically reduced and heavy restrictions were placed on Hungarian-language publications. Members of the Hungarian minority were denied equal job opportunities, visits by relatives were made extremely difficult and anyone applying to leave the country suffered negative consequences. Consequently, Magyars felt they were being treated as second-class citizens. Ceauşescu, for his part, believed that his intolerant minorities policy, which also threatened the existence of the Transylvanian Saxons, would help him achieve his main aim. As he expressed it, 'In the foreseeable future there will be no more national minorities in Rumania: only one Socialist nation.'

For a long time the Kádár régime exercised remarkable restraint. But at the beginning of the 1980s, as the harassment and grievances of Rumania's Hungarian minority increased, two meetings of 'frank and open discussion' took place between government and party officials from both countries in the summer and winter of 1982. These failed, however, to reconcile the two sides. Supported by opposition dissidents and sections of the Hungarian press, the Hungarian Samizdat magazine, Ellenpontok (Counterpoint), which was circulated within Rumania, highlighted the dramatically deteriorating situation of the Magyar minority. Its staff also directed an appeal by Hungarian dissidents on behalf of their co-nationals to the European Conference on Security and Cooperation which was meeting in Madrid. Since the Rumanian government's attitude continued to harden and petty-minded harassment of the more vocal spokesmen of the Hungarian minority increased, the government in Budapest attacked the 'flagrant violation of bilateral agreements' and considered similar retaliatory measures. After encountering the Rumanian government's opposition to granting its minorities greater autonomy, the first European Cultural Forum, held between 13 October and 25 November 1985 in Budapest and attended by representatives of the 35 signatory states at the European Conference on Security and Cooperation, broke up without producing any final accord. The apparent failure to obtain a satisfactory solution to the growing threat of ethnic conflict in Rumania damaged Kádár's prestige and that of the party.

For the 600,000 Hungarians who lived along Southern Slovakia's border with Hungary and who made up 4 per cent of Czechoslovakia's population, conditions, though not ideal, were more favourable. Here the Hungarians had their own schools and cultural organisations, and cross-border contact was permitted. But here, too, Hungarian dissidents complained of a 'step-by-step displacement of the language and culture' and accused the authorities of demanding loyalty to the host country to the extent that Hungarians were losing their ethnic identity. The 504,000 Magyars who lived under Yugoslavian sovereignty and predominantly inhabited the border region of the Voivodina also appeared to enjoy more tolerable conditions. Regular meetings held between the Hungarian and Yugoslavian leaders before 1991 repeatedly called for 'every socio-economic, cultural, educational and other opportunity' to be granted to the ethnic minorities on both sides of the border in order to strengthen and consolidate relations between their two countries.

The Hungarian government, for its part, boasted that it had made a complete break with its country's aggressively intolerant policy towards minorities in the past, claiming that it had granted them exemplary protection. This referred to Hungary's 230,000 Germans (who had in fact already been largely assimilated), 130,000 Slovaks scattered across the country, 30,000 South Slavs and 25,000 Rumanians. At the beginning of August 1985 Hungary's ethnic Germans were expressly encouraged to cultivate their own culture and language. But painstaking efforts to make Hungary's 320,000 gypsies settle permanently and integrate into society met with only limited success.

Concern for the situation of co-nationals was passionately debated in Hungary, but received little media coverage. The discussion raised the spectre of the extremely militant Magyar nationalism of the past and threatened to revive the problem which had dominated the country's history in the inter-war period, that of revising the borders laid down by the Trianon Treaty. The MSzMP thus found itself in a quandary. On the one hand, the need for solidarity among the Socialist Bloc countries meant that its hands were tied against doing more for the Hungarian minorities. On the other hand, it could not allow the problem to be exploited solely by dissidents and nationalists, since a groundswell of nationalism would have jeopardised its programme of reforms, against which there were already sufficient reservations among Hungary's Socialist partners. This could have undermined the domestic stability which the régime had achieved. Faced with the growing problems of implementing economic reforms and maintaining a more liberal climate, Hungary was particularly sensitive and vulnerable to external pressures.

In the rest of eastern Europe Communist party ideologues criticised the Hungarians for the freedom given to their scientists, playwrights, artists and film-makers. As part of its strategy of defusing internal criticism the Hungarian leadership had deliberately cultivated the arts and what it termed 'human intelligence'. Poets and writers not only received material privileges, better career opportunities and generous social benefits, they were given sufficient scope to publicise their works as long as they did not frivolously attack prevailing norms and exercised selfcensorship. Gyula Illyés, Miklós Mészőly, Iván Mándy, Miklós Szentkuthy and Géza Ottlik all enjoyed considerable respect. But the support given to György Konrád for his first two novels ( The Visitor and The Founder of the State) was withdrawn when he collaborated with the sociologist, Iván Szelényi, in producing a report on 'The Intelligentsia on the Road to becoming a Class Power'. The subsequent ban on his publications caused him to leave the country for a time. Others, like the essayist and scriptwriter, Sándor Csoóri, or the poet, György Petri, whose works were banned on account of their 'undesirable' subject matter, nevertheless found ways of having their volumes appear in Hungary. The cultural journals Élet és Irodalom (Life and Literature) and Mozgó Világ(World in Motion), which were especially popular with the younger generation, provided an important forum of intellectual discussion and pushed forward the barriers of social and intellectual freedom. Film-makers like Miklós Jancsó ( The Round Up and The Confrontation), Károly Makk ( Love), Péter Gothár ( Time Stands Still) and, above all, István Szabó ( Mephisto) won international acclaim for their productions.

In the autumn of 1986 a bitter conflict broke out between the Hungarian Writers' League and the MSzMP after the provincial cultural journal, Tiszatáj, was banned from publication for printing poems critical of the régime. At the same time, the works of István Csurka, a prominent writer and exponent of traditional Hungarian folk-literature, were also banned after Radio Free Europe had broadcast one of his short stories. When, at the League's annual meeting on 28 November, three-quarters of the governing committee refused to censure colleagues for signing a declaration on the thirtieth anniversary of the 1956 Uprising, uproar ensued. The offending statement had also been published abroad. The influential Central Committee Secretary for Agitation and Propaganda, János Berecz, delivered an intransigent speech threatening to dissolve the League. Since those who opposed censorship subsequently won a majority in elections to the committee, several writers professing loyalty to the party walked out of the League on the grounds that its views were incompatible with their principles. They subsequently announced their intention to found a new writers' organisation. These events demonstrated that the rapidly growing popular dissatisfaction caused by the worsening economic situation had reached artistic circles which were now also calling for leadership changes.

Figures for the previous economic year, published by the Central Office of Statistics in mid-February 1987, could not conceal the fact that the economy had again failed to meet the planners' targets and that the standard of living had fallen even further. Hungary's Gross Domestic Product had grown by only 0.9 per cent in real terms. New legislation introduced in late 1986 allowing the closure of bankrupt or chronically insolvent state-run enterprises, was not enough to eliminate the growing budget deficit. The government's intention to close down about 60 firms employing 200,000 workers resulted in general disquiet and caused the orthodox elements in the party to predict that the continuing reforms would fatally weaken if not destroy the state welfare system.

The pace of reform began to slow down as it became clear that the new competitiveness caused by participating in world markets had resulted in an inflationary spiral at home; that changing employment patterns meant the system could no longer artificially maintain full employment; and that freedom from 'the chains of bureaucratic-administrative control' could only be achieved by improving management efficiency. During preliminary talks between Kádár and Gorbachev in November 1986, and discussions between prime minister Lázár and his Soviet counterpart, Ryshkov, it was probably made clear to the Hungarians that they could not expect generous Soviet assistance to help them overcome their problems, though they could count on the Kremlin's goodwill and backing for introducing further economic reforms. But since they could not rely on the old party elements to make forward-looking decisions, it seemed clear that changes in the leadership were going to be necessary before any new strategy could be introduced. On one thing both sides agreed: since Kádár was so closely identified with the changes that had already taken place in Hungary, he remained for the time being the indispensable leader of the MSzMP.