The Danube River flows north to south through the middle of Hungary, splitting this landlocked central European country almost in half. Hungarians (Magyars) migrated here from Asia more than a thousand years ago and are distinct from the Germanic and Slavic peoples that surround them.
Fertile plains lie east of the Danube, with hills to the west and north. Soviet tanks crushed an uprising for democracy in 1956, but Hungary rebounded to become Eastern Europe's first purveyor of "goulash communism," blending personal freedom, prosperity, and a pinch of free enterprise. While other countries in the region suffered shortages, boutiques displaying designer fashions and cafés selling caviar lined Budapest streets.
By the late 1980s reform-minded Hungary had lost faith in communism, shaken by sagging productivity and the highest per capita foreign debt in Eastern Europe. In 1989 the government abolished censorship, dismantled barriers along the Austrian border, and called for privatization of industry, religious freedom, and free elections.
Foreign investment and private companies are flourishing. The economy is strong, with low inflation and falling interest rates. European Union member countries account for more than 60 percent of Hungarian exports. Now a member of NATO, Hungary also joined the European Union in 2004.1