ABSTRACT
The transition of Hungary back to capitalism may have begun in 1988/1989 with the gradual realization of the Communist Party’s leadership that its time had come to open the way for a system change. The transition may have begun earlier, in 1988, when Janos Kadar, the long-time General Secretary of the Communist Party and leader of the state, was forced to step down and clear the way for a new generation of politicians. In the first half of 1996, 59% of Hungary’s exports went to its five largest trading partners, the largest being Germany, followed by Russia, Austria, Italy and France. Around 56% of imports came from these countries. The economic changes Hungary was going through, were contingent not only on economic, but also on political variables. In the spring of 1990, the first free elections brought a coalition of conservative parties, headed by Prime Ministers Antall and, later, Boross, to power that transformed the economy relatively cautiously.
