Budapest’s sights, sounds and tastes will all stimulate your senses to form indelible memories, but all that you might experience today is the product of a fascinating history.

The Romans settled in the territory in the first century AD. Then, in 896, came the conquest of the Carpathian basin by Magyar tribes and, with the coronation of King Stephen, came the foundation of the Hungarian state in the year 1000.

While in Budapest keep your eyes open for the architectural relics of the 1541-1686 period—the Turkish baths. The Turks inflicted a crushing defeat on the Hungarian army in 1526 and the Ottoman Empire seized full control. The Turks were eventually driven out by the forces of several Western governments and the nation was absorbed into the Austrian Hapsburg empire for 200 years.

With the 1873 administrative unification of the previously autonomous towns of Obuda, Buda and Pest came the birth of Budapest, which was set to prosper rapidly. The Austro-Hungarian Empire collapsed at the end of the First World War and the 1920 Trianon settlement treaty left the city as the capital of a country only a third of its previous size.

The Second World War saw Hungary enter allied to Hitler, and German occupation in 1944. By the end of the fighting and Soviet 'liberation’, Budapest was in ruins, with scars that can still be seen today alongside those of a failed 1956 uprising violently crushed by Moscow. In 1989, however, fences that separated the nation from Austria were torn down while Gorbachev watched motionless. By 1991 there were no more Soviet troops in Hungary.

So the Budapest that you see today, now the capital of a NATO and European Union member state, is a city of many layers, each created by experiences of the past

POLITICS

Not surprisingly, Hungary’s past also still has a massive bearing on present-day politics. Problem legacies of periods in its history, for example environmental damage, discrimination against the Roma minority, corruption, organised crime and the status of about 5 million ethnic Hungarians left living in neighbouring countries by Trianon, are issues that still figure hugely. However, since the collapse of Communism, economic growth has been strong and the country’s accession to the EU in May 2004 was an acknowledgement of huge steps forward in many areas. Current Prime Minister Ferenc Gyurcsany was approved by Parliament in September 2004, after being chosen by the Socialist Party to succeed Peter Medgyessy, who resigned after disagreements with coalition partners the Free Democrats over a cabinet reshuffle. The coalition has been in power since 2002. Gyurcsany has pledged to further boost economic growth, cut the budget deficit and achieve successful Euro Zone membership in 2010, as well as lead the Socialists to a further election victory in 2006.

RELIGION

Hungary’s constitution provides for freedom of religion and this is generally respected in practice. There is no state religion and an amicable relationship exists between members of the four historic faiths of the nation—the majority Roman Catholics, Calvinists, Lutherans and followers of Judaism. Hungary’s Jews number about 80,000, down from a prewar population of almost 10 times that size. Other denominations include a range of Christian groups as well as Buddhists and Islamic communities. Easter Monday, Whit Monday, All Saints Day and Christmas Day are all celebrated as national holidays.

POPULATION

Hungary has a colourful, diverse culture reflecting its mix of peoples—Magyars
89.9%, Roma 4%, German 2.6%, Serb 2%, Slovak 0.8%, Romanian 0.7%—making up a population of 9.8 million in 2005. Nearly two-thirds of the population is urban, but the majority of towns have less than 40,000 inhabitants. About a third of the urban population lives within the boundaries of Budapest, which is several times larger than the biggest of the country’s other cities. Other cities include Debrecen, Miskolc, Szeged, Pecs and Gyor.

ECONOMY

Hungary has made a largely successful transition from a centrally planned economy to a market economy and strong economic growth has been maintained. The private sector now accounts for more than 80% of GDP. Foreign investment in Hungarian business has been widespread, with cumulative foreign direct investment totalling more than $23 billion since 1989. Germany is Hungary’s largest economic partner. Inflation has declined from 14% in 1998 to 7% in 2004, but unemployment has persisted around the 6% level. Hungary has always been an agricultural country, but following the Second World War it became heavily industrialised. Major industrial products include pharmaceuticals, textiles, chemicals and steel. Around a third of industry is located in and around Budapest.