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Hungary risk: Political stability risk
(RiskWire Via Thomson Dialog NewsEdge) COUNTRY BRIEFING
FROM THE ECONOMIST INTELLIGENCE UNIT
RISK RATINGSCurrentCurrentPreviousPreviousRatingScoreRatingScoreOverall assessmentB28B28Political stability riskA20A20Note: E=most risky; 100=most risky.SUMMARY
The ruling Hungarian Socialist Party (MSZP) won a decisive victory in a second round of the country's general election, securing a second term for the current Socialist-liberal coalition. The smooth transition to a new prime minister in 2004 demonstrated the inherent stability of the political system. The opposition espouses a strong role for the state, but has minimal prospects of taking power during the forecast period. However, the party's propensity to hinder the government agenda in parliament represents a threat to stability.
SCENARIOS
The new government fails to push through vital reforms (High Risk)
The parliamentary election resulted delivered a second term to the ruling coalition of the Hungarian Socialist Party (MSZP) and the liberal Alliance of Free Democrats (SZDSZ), and the prime minister, Ferenc Gyrucsany. There is a risk that the new government will not push through with substantive reform owing to concerns that it would lose out to the opposition. However, the Hungarian economy is now facing a potential crisis, unless a new government quickly takes steps to address high fiscal deficits. Both of the main parties endorsed plans for implementing structural changes in government, but it is unclear whether the proposed changes will bring down expenditure significantly. Over the longer-term uneasiness within the MSZP, which is relatively united at present, is likely to increase as fiscal austerity measures start to bite, which will result in some pressure to weaken reforms. Businesses should emphasise the importance of further reform to all political parties, but lobbying efforts are unlikely to be successful.
Obstructionist tactics by the main opposition Fidesz party affect the governments ability to govern (Moderate Risk)
Ever since losing a hard-fought general election in 2002, Fidesz has been active in building right-wing grassroots organisations. The party has also maintained a high profile, often driving political debate and the policy agenda. One of Fideszs primary tactics in opposition has been to be as obstructionist as possible in parliament and to contradict the governments every policy move. By forcing close votes even on the most minor of matters--including the acceptance of ministers answers to question-time queries--Fidesz insures that ministers must spend an inordinate amount of their time in parliament instead of taking care of the business of governing. This has slowed the progress of the structural and fiscal reforms needed to insure Hungarys future competitiveness. Moreover, the government's most important fiscal austerity measures--which it needs to implement in order to stave off a crisis--will require a two-thirds majority in parliament, and therefore the co-operation of Fidesz, and this may not be forthcoming. Over the longer term the main question is whether Fidesz will remain a radical, populist grouping, or become a more conventional centre-right opposition party. There is a chance that the government's loss of popularity will make it tempting for Fidesz to retain its populist orientation and oppose reforms.
BACKGROUND
(Background material is updated twice yearly. Last update: April 4th, 2006)
Political Forces
Hungarian public life is strongly polarised around a historically and culturally rooted split between the left and the right, now dominated by the Hungarian Socialist Party (MSZP) and the Fidesz-Hungarian Civic Union (Fidesz), respectively. In the Hungarian context, the liberal Free Democrats are in effect on the left, because of their internationalist outlook--and perhaps more importantly because they decided to form a coalition government with the MSZP in 1994-98, a move that was heavily criticised and is still not forgotten by Fidesz, another former anti-communist opposition force. Government-opposition conflict is often bitter, but opposition parties have sometimes been willing to co-operate over more technical issues of bipartisan concern. Under normal circumstances, the need for a two-thirds majority to amend some laws can give the opposition some leverage.
The Hungarian Socialist Party, the name the ruling MSZMP adopted in October 1989 after agreeing to democratic politics, has steadily transformed itself into a traditional social-democratic party. Under the leadership of the former MSZMPs reformist wing, the party received only 11% of the proportional vote in 1990 and went into opposition. After the election the former foreign minister, Gyula Horn, became party chairman and united the partys various factions: liberal economists who sought radical reform of the state-centred economy, social democrats, trade unionists and middle- and lower-level officials from the previous regime. Mr Horn led the Socialists to victory in the 1994 election. Austerity measures implemented by the Socialist-led government provoked popular dissatisfaction with the party, dooming it to defeat in the 1998 election. Mr Horn retired and was replaced by his protege, Laszlo Kovacs (the foreign minister in both the previous and the current Socialist-led governments). Unable to expand the Socialists appeal among voters, Mr Kovacs remained as party leader but stepped aside in June 2001 to allow Peter Medgyessy to be nominated as the partys compromise candidate for the post of prime minister. Mr Medgyessy, who was a finance minister for part of the 1994-98 administration and is not even a member of the party, led the Socialists to victory partly by moving their policies ever closer to the centre.
Mr Medgyessy stepped down as prime minister in August 2004, resulting in a technical change in government, and the make-up of the cabinet remained largely unchanged at first. MrMedgyessy's replacement, Ferenc Gyurcsany, took office in September 2004. The smooth transition demonstrates the inherent stability of the political system, as even in a period of relative crisis the opposition was able to do nothing to force an early election. As a result, the current coalition, comprising the Hungarian Socialist Party (MSZP) and the liberal Alliance of Free Democrats, looks set to serve out the remainder of its term in office. The new prime minister, Ferenc Gyurcsany, is consolidating his position and taking action to establish his personal popularity.
The Fidesz-Hungarian Civic Union (commonly known as Fidesz), the senior government party in 1998-2002, is the main right-wing force in Hungary. It was formed in 1988 by students in the law faculty at Budapests Eotvos University. During the conservative government of 1990-94, Fidesz espoused a liberal ideology and often co-operated with the Free Democrats in opposition. Under the leadership of Viktor Orban, the party began to transform itself into a conservative party, which resulted in the departure of its more liberal leaders in 1993. In an effort to change its image from that of a youth movement, the party dropped its upper age limit of 35 and officially excised Federation of Young Democrats from its name, although it kept its Hungarian acronym Fidesz. Fidesz added Hungarian Civic Party to its name in 1995, with Party changed to Union in 2003.
MrOrban served as prime minister in 1998-2002, but his abrasive style of governing and campaigning alienated voters in the centre, and this helped the Socialists to a surprise election victory in 2002. Fidesz fell into disarray after its narrow defeat, and MrOrban himself was conspicuously absent from public life. However, the governments errors in economic policy in 2003 created the opportunity for a strong rebound in support for Fidesz. The party gave itself a facelift at its 2003 congress, changing its name to Fidesz-Hungarian Civic Union, a move designed to signal a shift from a strictly political organisation to a grassroots movement uniting people with conservative and national values. Although nominally widening the base of Fidesz membership, the changes also concentrated more power in the hands of MrOrban and the party presidency, which was given the authority to decide on the identity of local party leaders. Fidesz recorded an overwhelming victory at the European election in June 2004, which came almost precisely at mid-term in the domestic political cycle. In the long term, Fideszs heavy reliance on MrOrban as the partys dominant personality is a strategic weakness for Fideszs future as a viable political party, although MrOrban is still young and will presumably be a major figure over the course of many political cycles to come.
The Alliance of Free Democrats is the countrys main liberal party. It has its roots in the dissident democratic opposition of the 1980s, which was prominent in the political transformation of 1988-89. In the 1990 election the Free Democrats finished a strong second to the Hungarian Democratic Forum. In 1994 the Free Democrats again finished second, but entered what turned out to be a difficult coalition with the Socialists, who did not need the liberals support to stay in government. By the 1998 election the partys support had dropped substantially and has subsequently failed to recover, although it has remained above the 5% threshold needed for parliamentary representation. Some voters, especially those with ties to the dissident movement under the previous regime, have never forgiven the Free Democrats for entering into government with a party descended from the communists. However, in current political circumstances, the MSZP remains the partys natural partner, and the two have once again formed a ruling coalition, although this time the liberals carry considerably more weight than in the 1994-98 coalition, when the MSZP enjoyed a parliamentary majority on its own. The Free Democrats draw their main support from wealthier, well-educated urban voters, which explains their hold on the Budapest mayoralty, with Gabor Demszky in the post since 1990.
Once the leading force in government, but now a minor partner of Fidesz on the right, the Hungarian Democratic Forum was formed in 1987 by a group of populist-oriented intellectuals and cultural figures. As prime minister and party leader, Jozsef Antall consolidated control over the party and moved it away from its more populist roots and towards a more conservative and Christian Democratic profile. This change angered many radicals within the Democratic Forum, which had difficulty regaining unity after the expulsion of one of its founders, the ultra-nationalist Istvan Csurka, and the subsequent death of MrAntall. After a heavy defeat in the 1994 election, many moderates left to form their own party.
The MDFs political viability is now dependent on its alliance with Fidesz. Without Fidesz co-operation the party would not have secured a presence in parliament in either 1998 or 2002. The party abandoned all hope of achieving parliamentary representation alone in 2002, and in effect merged with Fidesz for electoral purposes, as the two parties stood on the first joint lists in Hungarys post-communist electoral history. The MDFs president, Ibolya David, continues to reject Fideszs attempts at a full consolidation of the two parties, instead positioning her party as a true conservative alternative to the more populist Fidesz. This strategic gamble has apparently paid off in the short term, as the MDF defied expectations and just achieved the 5% threshold needed in the recent European election.
Parliamentary election results19982002% vote for party listDistricts wonSeats in parliament% of seats% vote for party listDistricts wonSeats in parliament% of seatsAlliance of Free Democrats7.62246.25.63205.2Fidesz-Hungarian Civic Party (Fidesz)(a)29.49014838.341.19518848.7Hungarian Democratic Forum(a)2.817174.4----Hungarian Justice and Life Party5.50143.64.4000.0Hungarian Socialist Party32.95413434.742.17817846.1Independent Smallholders Party13.2124812.40.8000.0Other parties8.6000.06.0000.0Independent candidates-110.3-000.0Total100.0176386100.0100.0176386100.0Memorandum itemTotal votes cast4,547,682---5,616,750---(a) Fidesz and Democratic Forum ran 78 joint candidates in 1998 and all joint lists and candidates in 2002. Fidesz now holds 164 seats, the Democratic Forum 24.Source: National Election OfficeMain political figures
Ferenc Gyurcsany
Ferenc Gyurcsany took over as prime minister from Peter Medgyessy in September 2004. He previously served as minister of youth and sport under the Medgyessy administration. As of mid-2005, his position appears secure, and he has begun to come forward with his own policy proposals. However, his party is faring poorly in the polls. MrGyurcsany has continued to reshuffle his cabinet, most notably through the replacement of the finance minister, Tibor Draskovics, with Janos Veres, a strong figure within the MSZP. The reason behind the change was to help MrGyurcsany to muster support for his governments policy programme within the MSZP, which remains fragmented, even following MrGyurcsany's rise to power and the election in 2004 of his ally Istvan Hiller to the party presidency. MrGyurcsany and MrHiller face the task of carrying out a major political campaign in the country while also trying to implement change within the MSZP.
Viktor Orban
Prime minister in the last conservative government (1998-2002) and leading figure of the Fidesz-Hungarian Civic Party (Fidesz), although he gave up the party leadership at the end of 1999. From the fiery speech at the reburial of Imre Nagy in 1989 demanding the withdrawal of Soviet troops with which he first made his mark, MrOrban has often courted controversy with outspoken rhetoric. Under his unchallenged leadership since 1993, Fidesz has shed its liberal political identity and moved steadily to the right. He was an energetic prime minister, but his imperious style alienated many. After his partys narrow defeat in the April 2002 election, MrOrban receded from party and parliamentary politics. As part of his continuing efforts to consolidate the right, he actively encouraged supporters to organise into small local groups, called civic circles, to be mobilised for street protests. MrOrban remains the unofficial leader of the civic circle movement, dubbed Hajra, Magyarorszag! (Go Hungary!)--a popular football chant and MrOrbans own sign-off at public speaking appearances during the campaign season. It is also a deliberate echo of Italys Forza Italia!, a similar political movement led by Silvio Berlusconi, the Italian prime minister. Since mid-2002 Mr Orban has adopted a more Eurosceptic tone, and more recently an anti-US stance as part of his open criticism of the governments support for the USs war effort in Iraq. His rhetoric, however, tends to be much more radical than the actions of his party in parliament.
Janos Veres
In reshuffling the government he inherited from his predecessor, Ferenc Gyurcsany dismissed Tibor Draskovics as finance minister on April 26th 2005, and replaced him with Janos Veres, the prime ministers chief of staff and a younger figure with significant influence in the Hungarian Socialist Party (MSZP). MrGyurcsany said that he had to make the change because MrVeres could muster greater political support for the changes he has planned in economic policy and public administration.
Zsigmond Jarai
Appointed governor of the National Bank of Hungary (NBH, the central bank) for a six-year term in March 2001, after serving almost three years as finance minister in the Orban administration. His tenure as finance minister followed a career in senior private- and public-sector finance posts. His previous relations with the Fidesz-led government probably explains his tolerance of pre-election fiscal loosening and his often contentious relations with the current government. Before the Socialists returned to power, Mr Jarai saw the adoption of a new central bank act that enhanced its independence and enshrines price stability as its overriding goal. Mr Jarai was also responsible for the surprising widening of the forints exchange-rate band in May 2001, which helped to halve inflation within a year. However, the NBHs strong forint policy elicited strong criticism from groups worried about the competitiveness of Hungarian exports, mostly employers organisations with strong ties to the current government. This only added to the strong political backdrop to monetary policy, with the current government even threatening to curb the NBHs independence before the European Commission intervened in mid-2002. Mr Jarai has received praise for the NBHs successful defence of the exchange-rate regime, which thwarted speculative interest in the forint in early 2003, but he has also received criticism for the damage done in the process to the NBHs inflation-fighting credentials.
Ferenc Madl
MrMadl began his first five-year presidential term in August 2000. After a career as an academic lawyer, he ran previously as the rights candidate for the post in 1995. He was nominated again in 2000 as a compromise candidate intended to bridge a rift between Fidesz and a junior coalition partner, the Independent Smallholders Party. MrMadl seems to have been accepted by the opposition as a non-partisan head of state.
Political Development
The head of state is the president, currently Ferenc Madl, who was elected by parliament for a five-year term on June 6th 2000, although power rests mostly with parliament. A centre-left coalition government, comprising the Hungarian Socialist Party and the liberal Alliance of Free Democrats, took office in May 2002, and is led by the prime minister, the Socialists Peter Medgyessy. The Socialists and Free Democrats also co-operated in government in 1994-98 and replace a right-of-centre coalition, led by the Fidesz-Hungarian Civic Party (commonly referred to as Fidesz). Since the end of communist rule, reform-minded centre-right and centre-left coalitions have alternated in power.
Important recent events
July 1997
Hungary is invited to begin accession negotiations with the EU and NATO. EU accession negotiations begin in 1998.
May 1998
The Fidesz-Hungarian Civic Party (Fidesz) wins the general election and forms a right-wing coalition government under Viktor Orban.
March 1999
Hungary, the Czech Republic and Poland join NATO.
January 2001
Industrial trade with the EU becomes fully liberalised.
May 2001
Preparations begin for full convertibility of the forint, after the currencys exchange-rate bands are widened.
October 2001
The forint becomes fully convertible.
April 2002
The Hungarian Socialist Party wins the general election and forms a centre-left coalition government under Peter Medgyessy.
December 2002
Hungary completes accession negotiations with the EU and receives a formal invitation to join at the EUs Copenhagen summit.
December 2002
The government permits the US to train members of the Iraqi opposition at the Taszar air base.
January 2003
Mr Medgyessy signs the Gang of Eight letter in support of US policy on Iraq, joining leaders from the UK, Spain, Italy, Portugal, Denmark, Poland and the CzechRepublic.
March 2003
The government permits US-led coalition forces to use Hungarian airspace and air bases as part of the war in Iraq.
April 2003
Hungarians vote overwhelmingly in favour of EU membership in a referendum.
May 2004
Hungary, along with nine other countries (mostly from Eastern Europe), joins the EU.
June 2004
Fidesz-Hungarian Civic Union, the main opposition party, scores a significant victory in Hungarys first election to the European Parliament.
September 2004
Ferenc Gyurcsany takes over as prime minister from Peter Medgyessy.
December 2004
Hungary withdraws its 300 troops from Iraq, but soon after announces that it would send another contingent of 150 troops to the country--this time within the framework of a NATO mission to train Iraqi security forces.
When the 13th Congress of the MSZMP in 1985 failed to bring substantial changes in policy, unrest among reformers within the party and state apparatus began to increase. Karoly Grosz replaced MrKadar as general secretary of the MSZMP in May 1988, and reformists (led by Imre Pozsgay and the architect of the 1968 economic reform, Rezso Nyers) gained control of the party in 1989. The prime minister, Miklos Nemeth, also enacted political liberalisation. In a dramatic break with the past, Imre Nagy, who had been secretly executed following the 1956 revolution, was given a public funeral and reburial in June 1989. The MSZP joined with opposition groups in national roundtable negotiations about establishing democracy and, in October 1989, transformed itself into the Hungarian Socialist Party.
Post-communist Hungary has benefited from a high level of political stability. Despite often bitter conflict between government and opposition, democratic procedures have become accepted and ensure a smooth and orderly transfer of power. The four democratic parliamentary elections since 1990 have each brought changes in direction--an alternation between centre-right and centre-left--with all three previous governments retaining a working majority and serving out their four-year term. The current Socialist-liberal coalition looks likely to do the same. Party politics have also been relatively stable, with all four parties in the current parliament present in the legislature since 1990, although several other parties have disappeared from mainstream politics. Political stability has been reinforced by NATO membership since March 1999 and EU accession in 2004.
In the March-April 1990 parliamentary election the opposition Hungarian Democratic Forum emerged as the most popular party and formed a coalition government with two other conservative parties, the Independent Smallholders Party and the Christian Democratic Peoples Party. The liberal parties, the Alliance of Free Democrats and the Federation of Young Democrats (Fidesz), joined the Socialists in opposition. Jozsef Antall, the president of the Hungarian Democratic Forum, became the prime minister and made a post-election deal with the Free Democrats that increased his powers, as well as eliminating the two-thirds majority requirement on most legislation. Although the MDF government set some institutional reforms in motion, in 1993-94 it pursued an undisciplined spending programme that left the budget in severe deficit and had a negative effect on the current account.
The May 1994 election returned the Socialists to power. Despite having an absolute majority, the Socialists formed a coalition government with the Free Democrats. The government introduced an austerity programme (the Bokros Package) in March 1995 designed to curb the government deficit and the external account imbalances. Economic growth decelerated and real wages fell sharply as a result, but by 1997 the governments policies began to yield results, with real GDP growth hitting a post-communist high. However, economic recovery came too late for the Socialist-led government, which was punished by voters for the effects of its earlier austerity measures. Fidesz--which by this time had added the Hungarian Civic Party to its official name and had evolved into a right-of-centre party--emerged the clear winner in the 1998 parliamentary election and formed a new coalition government with two other right-wing opposition parties, the Hungarian Democratic Forum and the Independent Smallholders Party. Like both its predecessors, this government served out its four-year term, while continuing with economic reform.
The April 2002 parliamentary election resulted in another change in government, but only after an emotional and often negative campaign--dominated by the Socialists and Fidesz--divided the country sharply between left and right. The Socialists and the Free Democrats, which had formed an election alliance, emerged after the second and final round of the election with a slim, ten-seat majority in Hungarys 386-seat parliament. Two parties from the previous, conservative government, Fidesz and the Hungarian Democratic Forum, went into opposition. No other party won more than 5% of the vote, the threshold for parliamentary representation.
Hungarian society remained highly politicised for most of 2002. But despite controversies, including anti-Socialist demonstrations that turned into violent clashes with police, and revelations that the new prime minister, PeterMedgyessy, had been a counter-intelligence officer in the secret service of the former communist regime, the MSZP achieved a landslide victory in the October 2002 local elections. This, along with the successful completion of EU accession negotiations in December, strengthened the government and sent the opposition into disarray.
By mid-2004, however, the tables had turned again. Public dissatisfaction with the government was high, as pay rises implemented immediately after the 2002 election were forgotten. Economic policy was also in disarray by the end of 2003, as half-hearted attempts to rein in budget spending were insufficient to curb the fiscal deficit. The National Bank of Hungary (NBH, the central bank) compounded the damage by making repeated missteps in monetary policy and communication, sending the local currency, the forint, on a rollercoaster ride in 2003. Despite the pomp surrounding Hungarys long-awaited accession to the EU in May 2004, Fidesz won an overwhelming victory in Hungarys first election to the European Parliament in June 2004, as Socialist popularity fell substantially. Nevertheless, the Socialist-liberal government looks likely to serve out its term, which runs until mid-2006, despite its slim parliamentary majority and low popular support at mid-term.
International Relations and Defence
The presence of large Hungarian minorities in neighbouring countries has been a source of problems for Hungary since the 1920 Treaty of Trianon, which reallocated more than two-thirds of the countrys pre-first world war territory (mostly to Romania, Czechoslovakia and Yugoslavia). During the 1980s the difficulties faced by Hungarian minorities, particularly in Romania, were an important mobilising element for the opposition parties. Since the collapse of communist rule, Hungarian governments have sought to balance the need to build constructive relations with neighbours with the wish to extend greater support to the Hungarian minorities. There are perhaps 2.7m-3.3m Hungarians in Hungarys neighbouring states, including upwards of 1.6m in Romania and around 500,000 in Slovakia. Generally, the Hungarian left has prioritised state-to-state relations, whereas the right has given greater weight to the claims of the minorities.
Relations with Romania and Slovakia, in particular, improved steadily under the 1994-98 Socialist-led regime--basic treaties were signed guaranteeing existing borders as well as minority rights--but were again put under severe strain by the so-called Status Law, passed by the Hungarian parliament in June 2001. The legislation offered Hungarians living in Hungarys neighbouring states the opportunity to apply for a Hungarian identity card that would entitle them to education, healthcare, travel and cultural discounts, and short-term work opportunities in Hungary. Romania and Slovakia, however, regarded the Status Law as discriminatory and extra-territorial and feared that quasi-citizenship among Hungarian minorities could lead to territorial claims in the future. Under international pressure from the EU and elsewhere, the available benefits under the law were limited mainly to cultural support measures--a development bemoaned by the political right, which was in opposition when final agreement was reached. Fidesz has since come out strongly in favour of granting dual citizenship to Hungarian minorities abroad, a move that is also opposed by Hungarys neighbours.
Hungary joined the EU in May 1st 2004, completing a process of progressive integration into international economic and political structures that began well before the 1991 dissolution of the Warsaw Pact and the Council for Mutual Economic Assistance (CMEA, or Comecon). It joined the UN in 1955, and the IMF and the World Bank in 1982. Entry into the General Agreement on Tariffs and Trade (GATT) in 1973 allowed it to become a founding member of the World Trade Organisation (WTO). Hungary signed a trade and co-operation agreement with the European Community in 1988 and was a founding member of the European Bank for Reconstruction and Development (EBRD) in 1991. In 1991 Hungary, Poland and Czechoslovakia formed the Central European Free-Trade Agreement (CEFTA, membership in which was terminated upon EU accession). Hungary joined the OECD in 1996, and joined the International Energy Agency (IEA) in 1997.
Admission talks with NATO began in September 1997, and Hungary formally joined the alliance, along with Poland and the Czech Republic, on March 12th 1999. Close co-operation between NATO and Hungarian armed forces was fostered by Hungarys participation in the NATO-led Stabilisation Force (SFOR) and the earlier Implementation Force (IFOR) in Bosnia and Hercegovina (BiH). Hungary also served as a forward base for both operations.
Hungarys early experience in NATO was not a completely happy one, however, as the country drew sharp criticism for its lack of material commitment to the alliance. In November 2002 Hungarys performance as a NATO ally was even held up as a warning signal against further NATO expansion, when an article in a US journal, Foreign Affairs, quoted allegations that Hungary was the most disappointing new member of NATO and would have already been expelled [from the alliance] if an expulsion were possible. In subsequent statements the defence minister, Ferenc Juhasz, confirmed that Lord Robertson, the NATO secretary-general at the time, had vehemently demanded that Hungary fulfil its pledges to modernise its forces.
The government has sought to repair Hungarys relations with NATO through renewed commitments to strengthen its defence capabilities. A vital step was the passage of a constitutional amendment in November 2003 that allowed the government to decide whether to allow the use of Hungarian airspace and ground transport for transit to NATO allies. Previously, a two-thirds majority in parliament was necessary, causing substantial delays that increased the dissatisfaction of NATO allies.
The country has also sought to repair relations with the US, and, in action independent of NATO channels, the government allowed the US to train members of the Iraqi opposition at the Taszar airbase in early 2003, and permitted coalition forces to use Hungarys airspace and airbases for the war in Iraq. In June 2003, all four parliamentary parties supported a resolution to send a 300-strong transport contingent for the post-war stabilisation effort in Iraq. The missions original mandate of six months was later extended to the end of 2004. In June 2004 the government finalised plans to eliminate conscription--Hungarys final conscripts will be discharged in November 2004, and Hungarys army will stabilise at approximately 30,000 troops thereafter, according to MrJuhasz.
Military forces, 2003Active forcesArmy12,870Border guards12,000Air force6,600UN & peacekeeping830Total incl others32,300Conscripts2,000ReservesArmy35,200Air force8,800Source: International Institute for Strategic Studies, The Military Balance, 2004-2005.
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