Where East meets West in Europe

Hungary has always been in the vanguard of former Communist Central European states in terms of economic development and was a clear candidate for early entry into the European Union. In keeping with this progressive approach the country was quick to respond to international criticism of deficiencies in its anti-money laundering regime but gaps remain, says Sue Grossey.

Hungary, like last month’s subject Slovakia, is a land-locked country right in the middle of Europe. However, it is much larger, covering 93,000 square kilometres, and shares borders with Austria, Croatia, Romania, Serbia and Montenegro, Slovakia, Slovenia and Ukraine. As befits its central position, Hungary was once part of the massive Austro-Hungarian Empire, which collapsed during World War I. Hungary then fell under Communist rule after World War II, until a revolt in 1956, which was met with massive (and ultimately unsuccessful) military intervention by Moscow. From 1968, Hungary began liberalising its economy under the banner of so-called “goulash Communism”. It held its first multi-party elections – and turned itself into a free market economy – in 1990.