Like several other countries in Eastern Europe, Hungary swung from one political extreme to the other at the end of the Second World War. Having embraced fascism for years, Hungary became a communist satellite of the USSR after its occupation by the Soviet Union during the war. In the decade after the war, postwar Hungary’s leaders generally followed Stalin’s instructions from Moscow. Their unpopular actions set the stage for the Hungarian Uprising of 1956.
Hungary in WWII
Throughout the 1920s and the 1930s, the Hungarian government was controlled by Admiral Miklós Horthy. Horthy was a fascist whose rule was motivated by three key principles. The first to reverse the humiliation of the Treaty of Trianon signed in 1920 after the First World War, which saw the country lose more than half its territory. The second was that Hungary could not embrace liberal democracy because the country was too underdeveloped for that system of government. Finally, Hungary must be for Hungarian people; minorities were considered a threat to the state. Horthy’s policies ensured that he aligned with other European fascist leaders like Hitler and Mussolini and that Hungary joined the Axis powers.
Hungary signed the Anti-Comintern Pact and Tripartite Pact in 1939 and 1940, respectively. Hungarian military and civilian officials hoped to regain the territories it had lost at Trianon. Even though one of Hungary’s greatest foes, Romania, was also a member of the Axis, concerns about Soviet policy outweighed any qualms about joining the fascist alliance. Large numbers of Hungarian forces found themselves committed to major battles on the Eastern Front and occupation duty in Yugoslavia. An estimated 200,000 Hungarians died on the Eastern Front, a death toll that led to calls for Hungary to withdraw from the war. By 1944, efforts by Hungary to do so led to a coup by German-backed elements of the Arrow Cross party. The coup’s success meant Hungary remained part of the Axis until the end of the war.
The Impact of the War
Admiral Horthy’s decision to enter WWII was one of the most costly decisions ever made by a Hungarian leader. When the city of Budapest came under siege by the Red Army, it was clear the war had been lost, but the Germans and their diehard allies from the Arrow Cross party insisted on fighting. As a result, 80% of the city was destroyed in the fighting. Much of the country was devastated by war and the economy lay in tatters.
The human toll on the country was very heavy. Hungary lost an estimated 864,000 deaths from 1940 to 1945. Little over 200,000 of these were military personnel, mostly lost fighting the Soviets on the Eastern Front. Around 664,000 Hungarian civilians died during the war either from the fighting, starvation, or the Holocaust. This was nearly 9.5% of the country’s prewar population. The death and destruction was not solely caused by the Soviets; Allied air raids over the country caused severe damage and possibly thousands of deaths. This devastation would take years to recover from. The country’s involvement in the Holocaust also cast a pall over its reputation that remains in place to this day. While Hungary initially did not participate in the Holocaust, by the end of the war, Hungarian Jews faced deportation or death on the spot. Of the 563,000 Jews living in Hungary who died during the war, 500,000 perished after the 1944 coup.
Establishment of Communist Rule
The Soviets did not just aim to knock Hungary out of WWII; they intended to introduce communism. The veteran Hungarian communist leader and Stalin’s friend Mátyás Rákosi was thrust into power right after the Soviets took control of all of Hungary. Rákosi had been a commissar in Béla Kun’s short-lived communist government in 1920 and spent many years in exile in the USSR during Horthy’s rule. When he returned to power, he had scores to settle.
While the first postwar elections saw the communists gain a mere 17% of the vote, Rákosi sought to undermine these results almost immediately. He began cracking down on opposition factions, using the support of the Soviet army and NKVD. Within a couple of years, he set up a secret police that perpetrated a brutal reign of terror. Additionally, the government launched a collectivization program to bring privately owned land under state control. All religious institutions in the country were shut down in line with traditional communist doctrine. An estimated 2,000 people died in the reign of terror following the creation of the Hungarian People’s Republic.
To prove his loyalty to Stalin, Rákosi agreed to sign a reparations agreement with Moscow, and indemnity of $200 million to the USSR for their involvement in the 1941 invasion. His economic policies mirrored Stalin’s collectivization and industrialization programs from the 1930s. The lack of any meaningful opposition meant that he could do whatever he felt was necessary to consolidate his rule.
Postwar Border Changes
Hungary had joined the Axis in WWII in an effort to reconquer land Horthy believed was rightfully Hungarian. When the Treaty of Trianon was signed in 1920 after WWI, Hungary lost two-thirds of the territory it had during its union with Austria and close to three million Hungarians were forced to live outside the country’s borders. The loss of northern Transylvania was especially traumatic because of the large Hungarian community there and its proximity to the Hungarian homeland. As part of his agreement to get Hungary into WWII on his side, Hitler agreed to recognize Hungarian claims over Transylvania.
When Romania switched sides to support the Soviets at the end of the war, they were rewarded by Soviet recognition of Romanian control over northern Transylvania. In a treaty signed in 1947, Hungary’s new government agreed to recognize Romanian sovereignty over the disputed zone. This treaty stated that Hungary’s borders were to be what they were in 1938. One exception was that Czechoslovakia gained a strip of territory that was disputed before the war. Any Hungarian that wished to move to their homeland was free to do so.
Hungarian nationalists were appalled, earnestly believing that they had a right to control northern Transylvania and much of the Carpathian region. The willingness of the Hungarian People’s Republic to sign this treaty convinced many Hungarians that their state was totally controlled by Moscow. This further undermined the popularity of the Hungarian communist government.
The Economy of Postwar Hungary
Postwar Hungary suffered terrible economic hardship due to several factors: The destruction and costs of the war, economic mismanagement by the communist leadership, and the loss of so many young men in the war. The war cost Hungary money it could not afford and the destruction of its Jewish population meant the destruction of much of its middle class. The challenges faced by Rákosi’s government would have daunted a team of professional economists. His cabinet was woefully unprepared for the problems they faced.
For several years after 1945, Hungary suffered from some of the worst hyperinflation of any country in modern history. Prices boomed due to reconstruction costs and lack of available funds. Only major government intervention through price controls brought hyperinflation down. 90% of the country’s industrial capacity was damaged and basic transportation could not function. Being a member of the Eastern Bloc meant Hungary could not receive relief funds from the United States through the Marshall Plan.
Rákosi’s government responded with a Stalinist approach to economic management. Forced industrialization led to the return of much of Hungarian industry, but output remained low. The Three Year Plan brought limited recovery and abolished the feudal elements of the Hungarian economy during Horthy’s regime. However, it also created a culture of dependency on state management due to the lack of private business and investment. Worker’s unions were entirely controlled by the state, meaning they had no power to protest poor working conditions. The poor economic recovery contributed to popular discontent with the government.
Imre Nagy and the Hungarian Uprising
As a result of poor economic management, heavy losses incurred in the Second World War, and Hungary’s membership of the Warsaw Pact, tensions in Hungarian society reached a boiling point. After the death of Stalin in 1953, the new Soviet leader Nikita Khrushchev criticized Stalinist repression in 1956 and signaled a more conciliatory approach towards the West. In Hungary, Rákosi was obliged to step aside as party leader in July 1956 and was replaced by Erno Gero. Gero remained unpopular with the people, and student demonstrations in October brought the reformer Imre Nagy back into power as prime minister.
Although still a member of the ruling Hungarian Working People’s Party, Nagy set out to reform the Stalinist system during an earlier stint as prime minister from 1953 to 1955. He eased government control of the economy, believing that the economy could only grow with private investment. He also released hundreds of thousands of political prisoners held by his predecessor’s regime.
Although Nagy and the student protestors who brought him to power had been encouraged by Khrushchev’s denunciation of Stalin, his intention to hold free democratic elections and leave the Soviet-dominated Warsaw Pact rang alarm bells in the Kremlin. The prospect of Hungary drifting away from the Eastern Bloc and perhaps abandoning communism entirely was unacceptable to Khrushchev. On November 4th, 1956, Soviet tanks rolled into Budapest and put an end to the Hungarian Uprising. Despite a promise of safe conduct from party leader János Kádár, Nagy was arrested and executed two years later.
