After Uprise of 1956 János Kádár became prime minister of the “Revolutionary Worker-Peasant Government” and General Secretary of the Hungarian Communist Party. In the early 1960’s Kádár announced a new policy : He declared a general amnesty, gradually curbed some of the excesses of the secret police, and in 1968 introduced a relatively liberal cultural and economic course. The „New Economic Mechanism”, as the new policy was called moved away from a strictly planned economy towards a system more reminiscent of the decentralized Yugoslavian model. Even private ownership was noot banned anymore, and little private shops and manufactures arised all over Hungary. The shortage of supplies was gradually ceased, even some „capitalist” products like Coca Cola and blue jeans were avaible in the shops, the overall level of the wages went up. Travelling to abroad became easier, though dissidents and opponents of the system still remained closely watched by the secret police, particularly during the anniversaries of the 1956 uprising in 1966, 1976, and 1986. Hungarians enjoyed more freedom in culture too, more and more western movies were on show in movies and in the Hungarian Television, and novels of writers from US and Western Europe were translated and published regularly.

In 1961 according the new agreement between Hungary’s goverment and  the Chatolic Church eight secondary schools were allowed to be operated by the church and to distribute christian values. By the early 1980’s some lasting economic reforms and limited political liberalization were achieved,  and the foreign policy encouraged more trade with the West. Nevertheless, the New Economic Mechanism led to mounting foreign debt, incurred to subsidize unprofitable industries. Many of Hungary’s manufacturing facilities were outmoded and unable to produce goods that were salable on world markets. Despite this, they succeeded in obtaining sizable financial loans from Western countries without much difficulty. During his 1983 visit to Hungary, Soviet leader Andropov expressed interest in adopting some of the country’s economic reforms in the Soviet Union. But Hungary remained committed to a pro-Soviet foreign policy and openly criticized US president Ronald Reagan’s  deployment of intermediate-range nuclear missiles in Europe. In 1986 Reagan’s visit to Hungary was refused by Janos Kadar, as he critized firmly the policy of the Soviet block, and was the greatest opponent of the communist system, declaring is task as “bringing the Cold War to a conclusion, and regain Hungary’s sovereignty in the process”. Today Ronald Reagan’s statue – inaugurated on its 100th birthday in 2011 – stands on Szabadsag Square of Budapest, near to the Hungarian Parliament, Imre Nagy’s statue, the American Embassy and the only Soviet memorial left untouched in Budapest after 1989 (after the fall of the Communist regime in Hungary many of the Communist statues and monuments were immediately removed and melted down, or diminished in other way. Only 42 statues remained – including „Stalin’s boots”, remnant of the famed satue of Stalin destroyed during Uprise 1956 – , wich formed the basis for the current collection of Memento Park Budapest).

Hungary’s transition to a Western-style democracy was one of the smoothest among the former Soviet bloc’s countries. By late 1988 activists within the party and bureaucracy and Budapest-based intellectuals were increasing pressure for change. Young liberals formed the Federation of Young Democrats  -FIDESZ -, and the national opposition established the Hungarian Democratic Forum -MDF. Civic activism intensified to a level not seen since the 1956 revolution, and as a result in 1988 János Kádár was resigned.  One year later, in 1989, the Parliament adopted a “democracy package”, which included trade union pluralism; freedom of association, assembly, and the press; futhermore a new electoral law. In August 1989 one more important thing happened: the Iron Curtain was cut over in Hungary. The Iron Curtain wasn’t simply a phrase made famous by Winston Churchill to describe the line separating the Soviet-dominated eastern Europe from the sovereign nations of the west. It was literally a guarded, roughly 7000 km long wirefence barrier, spotted with watchtowers, what millions of people couldn’t cross because they were imprisoned in their home countries. But in 1989 reformers inside the Hungarian government decided to open their border to the west and allow Hungarians to leave for Austria. The same year they began allowing East Germans on Hungarian soil to leave for Austria as well, then to West Germany. (On 9th November 1989 also the Berlin Wall was demolished. A piece of the original Berlin Wall can be see today in front of Terror Museum Budapest.)  In October 1989  with  a radical revision of the constitution Hungary started to move gradually to Western-style democracy. The Soviet Union reduced its involvement by signing an agreement in April 1989 to withdraw Soviet forces by June 1991. National unity culminated in June 1989 as the country reburied Imre Nagy, his associates, and, symbolically, all other victims of the 1956 revolution. In October 1989, the Communist Party convened its last congress and re-established itself as the Hungarian Socialist Party (MSZP). In a historic session on October 16th–20th 1989, the Parliament adopted legislation providing for multiparty parliamentary elections and a direct presidential election. The legislation transformed Hungary from a People’s Republic into the Republic of Hungary, guaranteed human and civil rights, and created an institutional structure that ensures separation of powers among the judicial, executive, and legislative branches of government. On 23rd October 1989, (on the 33rd anniversary of the Revolution of 1956 ) the present Republic of Hungary was proclaimed on Kossuth square in Budapest. The revised constitution gave equal status to public and private property. Hungary decentralized its economy and strengthened its ties with western Europe; in May 2004 Hungary became a member of the European Union.