Postwar Hungary
[Excerpted from Hungary: A Country Study, Stephen R. Burant. ed. (Washington, D.C., 1989)]
Gombos's appointment marked the beginning of the radical right's ascendancy in Hungarian politics, which lasted with few interruptions until 1945. The radical right garnered its support from medium and small farmers, former refugees from Hungary's lost territories, and unemployed civil servants, army officers, and university graduates. Gombos advocated a one-party government, revision of the Treaty of Trianon, withdrawal from the League of Nations, anti-intellectualism, and social reform. He assembled a political machine, but his efforts to fashion a one-party state and fulfill his reform platform were frustrated by a parliament composed mostly of Bethlen's supporters and by Hungary's creditors, who forced Gombos to follow conventional policies in dealing with the economic and financial crisis. The 1935 elections gave Gombos more solid support in the parliament, and he succeeded in gaining control of the ministries of finance, industry, and defense and in replacing several key military officers with his supporters. In September 1936, Gombos informed German officials that he would establish a Nazi-like, one-party government in Hungary within two years, but he died in October without realizing this goal.
In foreign affairs, Gombos led Hungary toward close relations with Italy and Germany; in fact, Gombos coined the term Axis, which was later adopted by the German-Italian military alliance. Soon after his appointment, Gombos visited Italian dictator Benito Mussolini and gained his support for revision of the Treaty of Trianon. Later, Gombos became the first foreign head of government to visit German chancellor Adolf Hitler. For a time, Hungary profited handsomely, as Gombos signed a trade agreement with Germany that drew Hungary's economy out of depression but made Hungary dependent on the German economy for both raw materials and markets. In 1928 Germany had accounted for 19.5 percent of Hungary's imports and 11.7 percent of its exports; by 1939 the figures were 52.5 percent and 52.2 percent, respectively. Hungary's annual rate of economic growth from 1934 to 1940 averaged 10.8 percent. The number of workers in industry doubled in the ten years after 1933, and the number of agricultural workers dropped below 50 percent for the first time in the country's history. Hungary also used its relationship with Germany to chip away at the Treaty of Trianon. In 1938 Hungary openly repudiated the treaty's restrictions on its armed forces. With German help, Hungary extended its territory four times and doubled in size from 1938 to 1941. It regained parts of southern Slovakia in 1938, Carpatho-Ukraine in 1939, northern Transylvania in 1940, and parts of Vojvodina in 1941.
Hitler's assistance did not come without a price. After 1938 the fuhrer used promises of additional territories, economic pressure, and threats of military intervention to pressure the Hungarians into supporting his policies, including those related to Europe's Jews, which encouraged Hungary's anti-Semites. The percentage of Jews in business, finance, and the professions far exceeded the percentage of Jews in the overall population. The 1930 census showed that Jews made up only 5.1 percent of the population but provided 54.5 percent of its physicians, 31.7 percent of its journalists, and 49.2 percent of its lawyers. Jews controlled an estimated 19.5 percent to 33 percent of the national income, four of the five leading banks, and 80 percent of Hungary's industry. After the depression struck, anti-Semites made the Jews scapegoats for Hungary's economic plight.
Hungary's Jews suffered the first blows of this renewed anti-Semitism during the government of Gombos's successor, Kalman Daranyi, who fashioned a coalition of conservatives and reactionaries and dismantled Gombos's political machine. After Horthy publicly dashed hopes of land reform, discontented rightwingers took to the streets denouncing the government and baiting the Jews. Daranyi's government attempted to appease the anti-Semites and the Nazis by proposing and passing the first socalled Jewish Law, which set quotas limiting Jews to 20 percent of the positions in certain businesses and professions. The law failed to satisfy Hungary's anti-Semitic radicals, however, and when Daranyi tried to appease them again, Horthy unseated him in 1938. The regent then appointed the ill-starred Bela Imredy, who drafted a second, harsher Jewish Law before political opponents forced his resignation in February 1939 by presenting documents showing that Imredy's own grandfather was a Jew.
Imredy's downfall led to Pal Teleki's return to the prime minister's office. Teleki dissolved some of the fascist parties but did not alter the fundamental policies of his predecessors. He undertook a bureaucratic reform and launched cultural and educational programs to help the rural poor. Illiteracy dropped to about 7 percent by 1941. But Teleki also oversaw passage of the second Jewish Law, which broadened the definition of "Jewishness," cut the quotas on Jews permitted in the professions and in business, and required that the quotas be attained by the hiring of Gentiles or the firing of Jews. By the June 1939 elections, Hungarian public opinion had shifted so far to the right that voters gave the Arrow Cross Party--Hungary's equivalent of Germany's National Socialist German Workers' Party (the Nazi Party)--the second highest number of votes. In September 1940, the Hungarian government allowed German troops to transit the country on their way to Romania, and on November 20, 1940, Hungary signed the Tripartite Pact, which allied Germany, Italy, and Japan.
In December 1940, Teleki signed a short-lived Treaty of Eternal Friendship with Yugoslavia. The Yugoslav government, however, was overthrown on March 27, 1941, two days after it succumbed to German and Italian pressure and joined the pact. Hitler considered the overthrow a hostile act and grounds to invade. Again promising territory in exchange for cooperation, he asked Hungary to join the invasion by contributing troops and allowing the Wehrmacht (German armed forces) to march through its territory. Unable to prevent the invasion, Teleki committed suicide on April 3. Three days later, the Luftwaffe mercilessly bombed Belgrade without warning, and German troops invaded. Shortly thereafter, Horthy dispatched Hungarian military forces to occupy former Hungarian lands in Yugoslavia, and Hungary eventually annexed sections of Vojvodina.
Horthy named the right-wing radical Laszlo Bardossy to succeed Teleki. Bardossy was convinced that Germany would win the war and sought to maintain Hungary's independence by appeasing Hitler. Hitler tricked Horthy into committing Hungary to join his invasion of the Soviet Union in June 1941, and Hungary entered the war against the Western Allies the following December. In July 1941, the government deported the first 40,000 Jews from Hungary, and six months later Hungarian troops, in reprisal for resistance activities, murdered 3,000 Serbian and Jewish hostages--near Novi Sad in Yugoslavia. By the winter of 1941-42, German hopes of a quick victory over the Soviet Union had faded. In January the German foreign minister visited Budapest asking for additional mobilization of Hungarian forces for a planned spring offensive and promising in return to hand Hungary some territory in Transylvania. Bardossy agreed and committed onethird of Hungary's military forces.
Horthy grew dissatisfied with Bardossy, who resigned in March 1942, and named Miklos Kallay, a conservative veteran of Bethlen's government, who aimed to free Hungary from the Nazis' grip. Kallay faced a terrible dilemma: if he broke with Hitler and negotiated a separate peace, the Germans would occupy Hungary immediately; but if he supported the Germans, he would encourage further pro-Nazi excesses. Kallay chose duplicity. In 1942 and 1943, pro-Western Hungarian government officials promised British and American diplomats that the Hungarians would not fire on their aircraft, sparing for a time Hungarian cities from bombardment.
In January 1943, the Soviet Red Army annihilated Hungary's Second Army during the massive counterattack on the Axis troops besieging Stalingrad. In the fighting, Soviet troops killed an estimated 40,000 Hungarians and wounded 70,000. As anti-Axis pressure in Hungary mounted, Kallay withdrew the remnants of the force into Hungary in April 1943, and only a nominal number of poorly armed troops remained of the country's military contribution to the Axis Powers. Aware of Kallay's deceit and fearing that Hungary might conclude a separate peace, Hitler ordered Nazi troops to occupy Hungary and force its government to increase its contribution to the war effort. Kallay took asylum in the Turkish legation. Dome Sztojay, a supporter of the Nazis, became the new prime minister. His government jailed political leaders, dissolved the labor unions, and resumed the deportation of Hungary's Jews.
While Kallay was prime minister, the Jews endured economic and political repression, but the government protected them from the "final solution." The government expropriated Jewish property; banned the purchase of real estate by Jews; barred Jews from working as publishers, theater directors, and editors of journals; proscribed sexual relations between Jews and non-Jews; and outlawed conversion to Judaism. But when the Nazis occupied Hungary in March 1944, the deportation of the Jews to the death camps in Poland began. Horthy used the confusion after the July 20, 1944, attempt to assassinate Hitler to replace Sztojay in August 1944 with General Geza Lakatos and halt the deportation of Jews from Budapest. Of the approximately 725,000 Jews residing within Hungary's expanded borders of 1941, only about 260,500, mostly from Budapest, survived.
In September, Soviet forces crossed the border, and on October 15 Horthy announced that Hungary had signed an armistice with the Soviet Union. However, the Germans abducted the regent and forced him to abrogate the armistice, depose the Lakatos government, and name Ferenc Szalasi--the leader of the Arrow Cross Party--prime minister. Horthy abdicated, and soon the country became a battlefield. Hungary was sacked first by the retreating Germans, who demolished the rail, road, and communications systems, then by the advancing Soviet Red Army, which found the country in a state of political chaos. Germans held off the Soviet troops near Budapest for seven weeks before the defenses collapsed, and on April 4, 1945, the last German troops were driven out of Hungary.
In the aftermath of World War II, a victorious Soviet Union succeeded in forcing its political, social, and economic system on Eastern Europe, including Hungary. But the Hungarians never reconciled themselves to Soviet hegemony over their country and rebelled against the Soviet Union and its Hungarian vassals in 1956. That revolution was crushed by Soviet tanks, but it brought to power Janos Kadar, who then attempted to institute a milder form of communist rule.
The Hungarian Communist Party (HCP) enjoyed scant popular support after the toppling of Bela Kun's short-lived Hungarian Soviet Republic in 1919 and the subsequent white terror. During World War II, a communist cell headed by Laszlo Rajk, a veteran of the Spanish Civil War (1936-39) and a former student communist leader, operated underground within the country. Matyas Rakosi led a second, Moscow-based group whose members were later called the "Muscovites." After the Soviet Red Army invaded Hungary in September 1944, Rajk's organization emerged from hiding, and the Muscovites returned to their homeland. Rakosi's close ties with the Soviet occupiers enhanced his influence within the party, and a rivalry developed between the Muscovites and Rajk's followers. Between the invasion and the end of the war, party membership rose significantly. Although party rolls listed only about 3,000 names in November 1944, membership had swelled to about 500,000 by October 1945.
Hungary's postwar political order began to take shape even before Germany's surrender. In October 1944, Britain's Prime Minister Winston Churchill and Foreign Minister Anthony Eden agreed with Stalin that after the war the Soviet Union would enjoy a 75 percent to 80 percent influence in Hungary, Bulgaria, and Romania, while the British would have a 20 percent to 25 percent share. On December 22, 1944, a provisional government emerged in Debrecen that was made up of the Provisional National Assembly, in which communist representatives outnumbered those of the other "antifascist" parties, and a cabinet, whose members included a general and two other military officers of the old regime, two communists, two Social Democrats, two members of the Independent Smallholders' Party, one member of the National Peasant Party, and one unaffiliated member. The provisional government concluded an armistice with the Soviet Union on January 20, 1945, while fighting still raged in the western part of the country. The armistice established the Allied Control Commission, with Soviet, American, and British representatives, which held complete sovereignty over the country. The commission's chairman, Marshal Kliment Voroshilov, a member of Stalin's inner circle, exercised absolute control.
Stalin decided against an immediate communist seizure of power in Hungary; rather, he instructed HCP leaders to take a gradualist approach and share power with other parties in freely elected coalition governments. Stalin informed Rakosi that a communist takeover would be delayed ten to fifteen years in order to deflect Western criticism of rapid communist takeovers in Poland, Bulgaria, Romania, and the Soviet zone of Germany. Stalin desired a quick return to normal economic activity to rebuild the Soviet Union and sought to avoid a confrontation with the Allies, who still had troops in Europe. The members of the HCP who had worked underground during the war opposed Stalin's gradualist approach and argued for immediate establishment of a dictatorship of the proletariat.
In April 1945, after Soviet troops had rid Hungary of the Nazis, the government moved from Debreceu to Budapest, and a second, expanded Provisional National Assembly was chosen. With the support of representatives of the trade unions and the Social Democratic Party, the HCP enjoyed an absolute majority of the assembly's 495 seats. The provisional government remained in power until November 15, 1945, when voters dealt the HCP an unexpected setback in a free election. The Independent Smallholders' Party won 245 seats in the National Assembly; the HCP, 70; the Social Democratic Party, 69; the National Peasant Party, 21; and the Civic Democratic Party, 2. The National Assembly proclaimed the Hungarian Republic on February 1, 1946, and two Smallholder-led coalitions under Zoltan Tildy and Ferenc Nagy governed the country until May 1947.
The HCP soon formed a leftist alliance with the Social Democratic Party and the National Peasant Party and gained control of several key offices, including the leadership of the security police and the army general staff. Voroshilov vetoed an agreement reached by the coalition members to name a member of the Independent Smallholders' Party to head the Ministry of Interior. A National Peasant Party member loyal to the HCP won the post and made the police a powerful tool of the communists. The National Assembly undermined freedoms guaranteed in Hungary's constitution when it banned statements that could be interpreted as hostile to the democratic order or the country's international esteem. Later, as Hungary's democratic order became identified with HCP policies, the law was used to silence legitimate opponents.
In the immediate postwar period, the government pursued economic reconstruction and land reform. Hungary had been devastated in the last years of World War II. About 24 percent of its industrial base was destroyed. Many of the large landowners and industrialists fled Hungary in advance of the Soviet Red Army. Reconstruction proceeded rapidly, expedited by gradual nationalization of mines, electric plants, the four largest concerns in heavy industry, and the ten largest banks. In 1945 the government also carried out a radical land reform, expropriating all holdings larger than fifty-seven hectares and distributing them to the country's poorest peasants. Nevertheless, the peasants received portions barely large enough for self-sufficiency. Finally, the government introduced a new currency--the forint--to help curb high inflation.
Using methods Rakosi later called "salami tactics," the HCP strengthened its position in the coalition by discrediting leaders of rival parties as "reactionaries" or "antidemocratic," forcing their resignation from the government and sometimes prompting their arrest. In 1945 ex-members of Horthy's regime lost their positions. A year later, members of the Smallholders' Party and the Social Democratic Party were ousted from power. In late 1946, leaders of the Smallholders' Party were arrested. In 1947 the Soviet Union ordered the arrest of Bela Kovacs, the secretary general of the Independent Smallholders' Party, on the false charge of plotting to overthrow the government. The Independent Smallholders' Party was dissolved after Ferenc Nagy resigned his position as prime minister. The leftist bloc gained a small lead over its rivals in the 1947 general elections. The HCP tallied only 22 percent of the vote, but fraud tainted the election, and suspicions arose that the party actually enjoyed less support.
The Treaty of Paris, signed on February 10, 1947, required Hungary to pay US$200 million in reparations to the Soviet Union, US$50 million to Czechoslovakia, and US$50 million to Yugoslavia. Hungary also had to transfer a piece of territory to Czechoslovakia, leaving Hungary with slightly less territory than it had had after the Treaty of Trianon. Stalin had already returned Transylvania to the Romanians to reinforce the position of the procommunist Prime Minister Petru Groza. Thereafter, the Romanians' treatment of the Hungarian minority in Transylvania became an irritant in relations between the two countries.
In 1947 the postwar cooperation between the Soviet Union and the West collapsed, marking the beginning of the Cold War and the beginning of the end for Hungary's democratic coalition government. Having seen communist parties seize power in Poland, Romania, Bulgaria, and Yugoslavia and a communist insurgency threaten Greece, the Western powers dedicated themselves to containing Soviet influence. In May communists were expelled from the governments of Italy and France, and a month later the United States promulgated the Marshall Plan for the economic reconstruction of Europe, which was appealing to the to East European governments.
Stalin feared a weakening of the Soviet Union's grip on Eastern Europe. Anticommunist forces in the region remained potent, and most of the communist governments were unpopular. In addition, East European parties began taking positions independent of Moscow; for example, communists in the Polish and Czechoslovak governments favored participation in the Marshall Plan, and Yugoslavia and Bulgaria broached the idea of a Balkan confederation. By September Stalin had abandoned gradualism and reversed his earlier advocacy of independent, "national roads to socialism." He now pushed for tighter adherence to Moscow's line and rapid establishment of Soviet-dominated communist states in Hungary and elsewhere. The policy shift was indicated in September 1947 at the founding meeting of the Cominform, an organization linking the Soviet communist party with the communist parties of Eastern Europe, France, and Italy.
The HCP proceeded swiftly to assume full control of the government. First Secretary Rakosi became the country's most powerful official and dictated major political and economic changes. In October 1947, noncommunist political figures were told to cooperate with a new coalition government or leave the country. In June 1948, the Social Democratic Party merged with the HCP, forming the Hungarian Workers' Party (HWP). In 1949 the regime held a single-list election, and on August 20 of that year the government ratified a Soviet-style constitution. The official name of the country became the Hungarian People's Republic, and the HWP's control of the government was assured. In 1952 Rakosi also became prime minister.
In 1948 Yugoslavia was expelled from the Cominform, and the Soviet-Yugoslav rift broke into the open. Almost overnight it became treasonous for communists to display any approval of Yugoslav leader Josip Broz Tito or to advocate national roads to socialism. Beginning in 1949, the Soviet Union unleashed a four-year reign of terror against "Titoists" in Eastern Europe. Rakosi purged members of the party's wartime underground, potential rivals, and hundreds of others. Rajk, who continued to support a Hungarian road to socialism, "confessed" to being a Titoist and a fascist spy and was hanged in 1950. Another victim was future party chief Janos Kadar, who was jailed and tortured for three years.
Between 1948 and 1953, the Hungarian economy was reorganized according to the Soviet model. In a campaign reminiscent of the Soviet Union's forced collectivization of agriculture in the 1930s, the regime compelled most peasants to join collective farms and required them to make deliveries to the government at prices lower than the cost of production. The regime accelerated nationalization of banking, trade, and industry, and by December 1949 nearly 99 percent of the country's workers had become state employees. The trade unions lost their independence, and the government introduced Soviet-style central planning. Planners neglected the production of consumer goods to focus on investment in heavy industry, especially steel production, and economic self-sufficiency. In January 1949, Hungary joined the Council for Mutual Economic Assistance, an organization designed to further economic cooperation between the Soviet Union's satellites. The authorities also agreed to form joint-stock companies with the Soviet Union. These companies allowed the Soviet Union to dominate Hungary's air and river transportation, as well as its bauxite, crude oil, and refining industries and other sectors.
With the opposition parties disbanded and the trade unions collared, the churches became the communists' main source of opposition. The government had expropriated the churches' property with the land reform, and in July 1948 it nationalized church schools. Protestant church leaders reached a compromise with the government, but the head of the Roman Catholic Church-- Cardinal Jozsef Mindszenty--resisted. The government arrested him in December 1948 and sentenced him to life imprisonment. Shortly thereafter, the regime disbanded most Catholic religious orders, and it secularized Catholic schools.
Stalin died in March 1953. The new Soviet leadership soon permitted a more flexible policy in Eastern Europe known as the New Course. In June, Rakosi and other party leaders--among them Imre Nagy--were summoned to Moscow, where Soviet leaders harshly criticized them for Hungary's dismal economic performance. Soviet communist party Presidium member Lavrenti Beria reportedly upbraided Rakosi for naming Jews to Hungary's top party positions and accused him of seeking to make himself the "Jewish King of Hungary." (Communists of Jewish origin had dominated the party leadership and the secret police for a decade after the war, and every party leader from Bela Kun to Erno Gero had Jewish roots.) Rakosi retained his position as party chief, but the Soviet leaders forced the appointment of Nagy as prime minister. He quickly won the support of the government ministries and the intelligentsia. Nagy also ended the purges and began freeing political prisoners. In his first address to the National Assembly as prime minister, Nagy attacked Rakosi for his use of terror, and the speech was printed in the party newspaper.
Nagy charted his New Course for Hungary's drifting economy in a speech before the Central Committee, which gave the plan unanimous approval . Hungary ceased collectivization of agriculture, allowed peasants to leave the collective farms, canceled the collective farms' compulsory production quotas, and raised government prices for deliveries. Government financial support and guarantees were extended to private producers, investment in the farm sector jumped 20 percent in the 1953-54 period, and peasants were able to increase the size of their private plots. The number of peasants on collective farms thus shrank by half between October and December 1953. Nagy also slashed investment in heavy industry by 41.1 percent in 1953-54 and shifted resources to light industry and the production of consumer goods. However, Nagy failed to fundamentally alter the planning system and neglected to introduce incentives to replace compulsory plan targets, resulting in a poorer record of plan fulfillment after 1953 than before. Rakosi used his influence to disrupt Nagy's reforms and erode his political position. In 1954 Soviet leaders who favored economic policies akin to Nagy's lost a Kremlin power struggle. Rakosi seized the opportunity to attack Nagy as a right-wing deviationist and to criticize shortcomings in the economy. Nagy was forced to resign from the government in April 1955 and was later expelled from the Politburo, Central Committee, and finally the party itself. Thus, the Central Committee that had lauded the New Course in June 1953 unanimously condemned its architect less than two years later.
After Nagy's fall, collectivization and development of heavy industry again became the prime focus of Hungary's economy. The purges did not resume, however, as Rakosi did not enjoy the same amount of power or Soviet support that he did while Stalin was alive. Moreover, he now had to contend with many outspoken opponents within the party, including numerous victims of the purges who had been readmitted to the HWP on Moscow's orders. A schism soon split the party leadership from the rank and file, and the party organization within the Writers' Association became a forum for intraparty opposition. In 1955 a rapprochement between the Soviet Union and Yugoslavia produced the Belgrade Declaration, in which Moscow confirmed that each nation had the right to follow its own road to socialism. One year later, Soviet leader Nikita S. Khrushchev denounced Stalin in his "secret speech" before the Twentieth Party Congress of the Soviet communist party. These external events shook Rakosi, who was a strong opponent of Titoism and the instigator of Hungary's purges.
HWP members opposed to Rakosi compelled him to admit that the purges involved abuse of power and that Rajk and others had been its innocent victims. Rakosi ordered an investigation, but it cleared him and blamed the state security police instead. This result not only inflamed the party opposition but also alienated Rakosi from the police. In June 1956, Rakosi's position became untenable. The party press printed open attacks. The Writers' Association, the newly created Petofi Circle, and student organizations clamored for Rakosi's ouster and arrest. On June 30, the Central Committee dissolved the Petofi Circle and expelled intellectuals from the party. By mid-July, however, Soviet leaders began to fear outright revolution and called for Rakosi to step down. He resigned after a meeting of the Central Committee on July 17. Gero, Rakosi's deputy, was appointed first secretary. Moscow hoped to introduce a slow liberalization, but Gero was too closely identified with Rakosi, and party discipline subsequently broke down completely.