In 1989-90 Hungary experienced a peaceful political and social changeover as part of the landslide transformation marked by the collapse of the Soviet empire and the fall of the communism. As a result of the agreement reached between the democratic opposition, formed by intellectual groups and movements, and the weakened communist power, the Constitution of 1949 was modified (Act XX of 1949 on the Constitution of the Republic of Hungary), and the Hungarian Republic was proclaimed on 23 October 1989. Since the promulgation of the Amendment of the Constitution on 23 October 1989 Hungary has been a parliamentary democracy. Hungary is a republic and an independent and democratic constitutional state.
Democratic conditions are characterised by parliamentary alternation. As a result of the first free elections in 1990, a coalition government was formed by centre right and conservative political parties (MDF-Hungarian Democratic Forum, FKGP-Smallholders’ Party and KDNP-Christian Democrats).The government launched an overall privatisation process in the industrial, agricultural and service sector, and also started to make political and economic restitution. The government submitted its membership application to the European Union.
In the 1994 spring elections, the left-sided Hungarian Socialist Party (MSZP) won an absolute majority and entered into a coalition with the liberal party, the Alliance of Free Democrats (SZDSZ). The government continued the privatisation process and implemented a comprehensive economic stabilization programme. After the 1998 elections Fidesz – the Hungarian Civic Party (FIDESZ-MPP) formed a coalition with the Smallholders (FKGP) and the new government was set up with the participation of the two parties. The general elections held in 2002 and in 2006 were won by the Hungarian Socialist Party. It entered into a coalition with the Alliance of Free Democrats. In 2006 a speech of the Prime Minister held in a closed party event became public, which led to wide-scale political protestations, however, the general discontent with the efficiency of the government did not cause the dissolution of the Parliament. In the 2010 spring elections, the alliance of FIDESZ and KDNP won a two-third majority In 2014 the same alliance obtained the 66,83% of seats in the Parliament.
On April 8, 2018, parliamentary elections were held.
The participation rate was high, 70.22% among those who have a Hungarian residence, overall 69.73% if we take into consideration the additional votes sent via letter (Hungarian citizens reside outside the country). From the 199 mandates available, the Hungarian Civic Party (FIDESZ-KDNP) acquired 133, the Hungarian Socialist Party (MSZP) obtained 20, the Politics Can Be Different (LMP) obtained 8, the Movement for a Better Hungary (Jobbik) got 26, the Democratic Coaliton (DK) enlisted 9, just as the Together – Party for a New Era (Együtt), the National Council for Germans living in Hungary (MNOÖ) won 1 mandate, and 1 independent representative was also included in the parliament.
Political stability that characterised the period after the political changeover, along with the overall reforms implemented in ownership conditions, the banking system, public administration and the education system as well as the legal and financial reforms in the regulation of the industrial, agricultural and service sector, made Hungary a reliable partner for both investors and international diplomatic partners. While the significant influx of foreign operating capital played a decisive role in economic growth and integration into international economy, local SMEs had an increasing share in employment.
As a result of efforts for Euro-Atlantic integration, Hungary became a member of the Council of Europe in 1990, of the OECD in 1996, of NATO in 1999 and the European Union in 2004. Through accession a new political and economic era started, which provided a beneficial environment for economic and social development and integration into Europe. On several occasions, Hungary played an active role in the establishment and consolidation of new international relations of the era following the break-up of the Soviet Union as well as in international crisis management and peace-keeping (in Kosovo, Iraq, Afghanistan etc.). In 1994 Hungary hosted the Conference on Security and Cooperation in Europe, and chaired the Organisation for Security and Cooperation in Europe. In the first half of 2011, Hungary held the rotating Presidency of the Council of the European Union. The adoption of a European Roma policy and the Danube Region Strategy as well as the removing obstacles to closing the accession negotiations with Croatia demonstrated the efficacy of the Hungarian presidency. On 18 April 2011, the Parliament adopted the Fundamental Law of Hungary, replacing the earlier Constitution. It was later amended several times. It determines the major segments of the social, political and economic arrangements of the country.
After the Millennium, the national social, political and economic processes of the past 18 years – along with the growth of the GDP that has always exceeded the EU average – could be characterised, on the one hand, before 2009 by a gradual decline in the macroeconomic balance, the relative weakening of the country’s international market position, an income outflow exceeding the economic performance, on the other hand in connection with these processes, by an increasing demand for a comprehensive reform of public administration and the social redistribution systems. In the period before 2010, the state overrun in expenditure not only hindered the country’s economic close-up to Europe, but resulted in a seriously imbalanced budget, the restitution of which called for urgent and radical austerity measures. The Hungarian Convergence programmes aimed at cutting back state expenditure, increasing revenues and comprehensively reforming state administration and the large social redistribution systems (health care, education, social services). Expectations about fulfilling the Maastricht criteria, preparing for the introduction of the Euro and ensuring sustainable growth have been reflected in the social and economic programme of the 2007-2013 and 2014-2020 as well.
In 2012 the fiscal deficit has dropped below 3% (decreased by 2.4% of GDP), base interest rate and inflation have become record low, as well as international certifications reflecting the state of economy have also improved. The criteria of joining the Euro zone have become closer to full step by step, however, joining is not on the agenda at the moment.