Hungary

Hungary was part of the polyglot Austro-Hungarian Empire, which collapsed during World War I. The country fell under Communist rule following World War II. In 1956, a revolt and announced withdrawal from the Warsaw Pact were met with a massive military intervention by Moscow. Under the leadership of Janos KADAR in 1968, Hungary began liberalizing its economy, introducing so-called "Goulash Communism." Hungary held its first multiparty elections in 1990 and initiated a free market economy. It joined NATO in 1999 and the EU in 2004.

Country profile: Hungary

It was admitted to Nato in 1999 and joined the EU in May 2004.

A landlocked country, Hungary is home to Lake Balaton, the largest in central Europe, and to a large number of spa towns and hot springs.

It has rich traditions in folk and classical music and was the birthplace of numerous well loved performers and composers, including Franz Liszt, Bela Bartok and Zoltan Kodaly. It also has a long history of wine making.

Once part of the Ottoman and Hapsburg empires, it became a partner in the Austro-Hungarian empire in the mid-19th century. After a period of turmoil following World War I, an independent kingdom of Hungary was established.

Following World War II, the country found itself under communist rule. An uprising against Soviet domination in 1956 was crushed by Red Army forces but Hungary did later become the first Eastern European country to gain some economic freedom. It embraced aspects of the free market while still under communist rule and in 1968 the authorities allowed limited decentralisation of the economy.

This helped to smooth economic transition. Within four years of the collapse of communism nearly half of the country's economic enterprises had been transferred to the private sector, and by 1998 Hungary was attracting nearly half of all foreign direct investment in its region.

Hungary played an important part in accelerating the collapse of communism across Eastern Europe when in 1989 it opened its border with Austria, allowing thousands of East Germans to escape to the West. Just a few months later the Berlin Wall was history.

The redrawing of European borders that took place after World War I left about five million ethnic Hungarians living in neighbouring countries. Their status remains a sensitive issue. Low turnout invalidated a December 2004 referendum on whether or not to offer them citizenship.

• Full name: Republic of Hungary
• Population: 9.8 million (UN, 2005)
• Capital: Budapest
• Area: 93,030 sq km (35,919 sq miles)
• Major language: Hungarian
• Major religion: Christianity
• Life expectancy: 68 years (men), 77 years (women) (UN)
• Monetary unit: Forint
• Main exports: Machinery and transport equipment, foodstuffs, chemicals
• GNI per capita: US $10,030 (World Bank, 2006)
• Internet domain: .hu
• International dialling code: +36

President Laszlo Solyom

Prime minister: Ferenc Gyurcsany

Ferenc Gyurcsany's Socialist-led coalition won a decisive victory in parliamentary elections in April 2006, becoming the first government to win consecutive terms since the restoration of democracy in 1990.

Between them, the Socialists and Free Democrats won 210 of the 386 seats in parliament after campaigning on promises of further reforms.

After his re-election, the prime minister unveiled plans to cut public sector jobs and raise taxes in a bid to boost growth and steer Hungary toward eurozone membership in 2010. He also pledged to reduce the budget deficit.

But he came under intense opposition pressure in September 2006 when a tape recording was made public of him admitting at a party meeting that the government had lied about the state of the economy during the election.

The comments sparked the first violent protests in the capital since the fall of communism. The prime minister said he had been trying to convince his party about the urgent need for reform.

The former sports minister was first formally approved by parliament as prime minister in late September 2004.

He had been chosen by the Socialist Party to succeed Peter Medgyessy who resigned when tensions flared with the Free Democrats, the Socialists' coalition partners, over a cabinet reshuffle. The coalition has been in government since 2002.

Ferenc Gyurcsany was born in 1961 and was a member of the communist youth movement in the 1980s. He went on to become a millionaire from buying state assets in the early years of privatisation. He entered politics in 2002 as a strategic adviser to the former premier.