From 1945 to 1990, Hungary was part of the Soviet Union's buffer zone that extended from the Baltic states to the Balkans, a zone in which Moscow had imposed clones of the Stalinist political system after 1945. It was a zone of political, military and economic interest, containing Marxist-Leninist client states whose leadership equated national interest with that of the world Communist movement and the Soviet Union. They performed imperial services—economic and military—for the Soviet Union. Hungary's sovereignty was usurped by the Soviet Union, which possessed unconstrained control of its foreign policy and its territory for military purposes. Initially Hungary, like other countries in the zone, constituted Soviet economic space and supplied the imperial centre with financial resources and raw materials. In later years the Soviet Union loosened its economic stranglehold but still kept Hungary in its commercial and economic orbit. The first ten years of Soviet rule in Hungary can be described as the most flagrant form of foreign control and dominance. From the 1960s, economic relations became somewhat more equal and Soviet control of Hungarian bilateral relations with the Western world was relaxed. However, the country remained under Soviet hegemony and was firmly embedded in the Sovietimposed military and economic alliances, the Warsaw Pact and Comecon.
Impending economic collapse, the fatal weakening of the Soviet Union and domestic changes that were rapidly spiralling out of control weakened the Hungarian Socialist Workers' Party (HSWP), which itself was split over the right course to take. But there were few options and concessions snowballed, each one leading to the next. The mushrooming of opposition movements, whose popular base grew exponentially from 1987, led first to the reintroduction of the multi-party system, then to the acceptance of free elections—which automatically entailed the renunciation of the monopoly of power by the party that had controlled and ruled the country since 1945. In an eventually successful effort to save itself, the reformers reinvented themselves and created a new formation that claimed to break with the past. Rapid and fundamental economic change was unavoidable: Hungary's debt trap had finally closed on the regime, with the estimation that by 1990 Hungary would be unable to service its debt.

After flirtation with a fictitious notion called market socialism, it became clear that nothing short of capitalism could save the country from impending catastrophe. Transparency, the liberation of the press from a half-century of totalitarian shackles, shook the foundations of the regime by revealing the crimes committed by the police state. There was a deluge of previously banned writings of all political hues. Last but not least, Communist political legitimacy rested on the myth that the uprising of 1956 had been a counter-revolution. This was shattered when a representative of the regime itself, Imre Pozsgai, publicly declared that 1956 had been a popular uprising.
However, from an external perspective the changes were taking place rapidly, even too rapidly. Might this not lead to a new 1956? Might not transformation turn into collapse and lead not to an orderly democracy but to an abyss? What was being brought into question was the foundations of the post-war international order. With the opposition and even Communist reformers raising the issue of Hungarian neutrality, might not the Warsaw Pact and with it European peace and security collapse?
What I wish to examine here is the attitude of the Soviet Union and the Western powers to the regime change in Hungary during that crucial year of 1989. The examination is primarily based on recently released documents in the Hungarian archives which reveal what Soviet and Western politicians told Hungarians about their attitude towards transition. It will be argued that there was a meeting of minds between Moscow and the West that the foundations of the Yalta structures should survive, albeit on a cooperative basis. As NATO's Assistant Secretary General for Political Affairs put it in November 1989, the "Warsaw Pact [...] could well perform useful functions and enhance stability" if reformed on the basis of strict equality. From early 1989, Hungarian officials had pushed for a radical transformation of the Warsaw Pact's decision-making process. But opposition parties began to question membership of the Pact early on in the year and top-level Hungarian officials broached the issue of neutrality in September. Quitting the pact enjoyed tremendous support: it would symbolise the regaining of sovereignty.