1. The country and the people

Hungary is located in East-Central Europe. Its neighbours are Austria, Croatia, Romania, Slovakia, Slovenia, Ukraine and Yugoslavia. Two-thirds of its territory are plain, not higher than 200 metres. Ninety per cent of its water resources come from outside the country, the two biggest rivers being the Danube and the Tisza. The largest lake of Central Europe, the Balaton, can also be found in this country. Hungary is a relatively small country, the population and the size of the country are very similar to those of Portugal or Austria. 10.3 million people (1.5% of the population of Europe) live on 93,030 square kilometres (0.9% of the territory of Europe). The population of Hungary has been decreasing since the 1980s. The density of population is on average 110 people/square kilometre. Urbanisation is accelerating: 62.2% of the population live in 196 towns (1994), and almost one-third of them live in Budapest. The capital is a city of 2.1 million inhabitants. Ninety-eight per cent of the population are Hungarian, the largest minorities in Hungary being Gypsies, Germans, Croats, Slovaks and Romanians.

Hungary is a parliamentary democracy with a multiparty government system. After the communist era, the first freely elected government in 1990 was a coalition of parties Christian Democratic in spirit. In 1994, the Hungarian Socialist Party obtained the majority of votes and formed a coalition government with the biggest liberal party in Hungary, the Alliance of Free Democrats. Hungary is a republic. Officially speaking, the head of state is the President of the Republic, who is elected by Parliament. In effect, he wields little political power. Real executive power is exercised by the Prime Minister, who is always appointed by the most powerful party in Parliament. The Constitutional Court, established in 1990, also retains relatively strong influence in political life.

The system of public administration is fairly decentralised. The elected bodies of local municipalities of villages and towns enjoy considerable political and financial independence. The country is divided into 19 counties and Budapest, the capital. There are locally and directly elected governing bodies at county level, but they hardly have any disposition over major resources, their importance and responsibilities being reduced since the change of regime in 1990. Several government agencies, like the Ministry of Labour and the Ministry of Home Affairs have decentralised regional units.