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CIA documents debunk


The Myth of Soviet “Colonialism” in Hungary


CIA: Stalin-era USSR did not steal Hungary’s industry but rather legally seized some Nazi German industrial compounds as war reparations. The Hungarian workers in these Soviet-owned factories enjoyed benefits far higher than Hungarian workers in non-Soviet-owned factories.



The History of the USSR & the Peoples’ Democracies

Chapter 15, Section 3 (C15S3) 



The CIA-MI6 media mercenaries charge that the USSR ‘stole’ Hungary’s industry, once the Red Army ‘occupied’ Hungary. In so propagating, they distort the picture of the reality. According to the Hague Convention, the army which defeats its enemy force in a specific territory has the legal right to seize those enemy economic assets as a type of reparation (see C18S2). The USSR exercised this legal right. Furthermore, the Yalta Agreement reaffirmed this right of the USSR:

2. Reparation in kind is to be exacted from Germany in three following forms:

(a) Removals within two years from the surrender of Germany or the cessation of organized resistance from the national wealth of Germany located on the territory of Germany herself as well as outside her territory (equipment, machine tools, ships, rolling stock, German investments abroad, shares of industrial, transport and other enterprises in Germany, etc.), these removals to be carried out chiefly for the purpose of destroying the war potential of Germany.


After the Soviet victory in the Great Patriotic War and the defeat of the Axis forces in Hungary, the USSR took over the Nazi German assets in Hungary as part of reparation, and converted them into the USSR’s stock companies (A/Os). The  CIA admitted:

Prior to 1 October 1952, all former German industrial plants and other economic enterprises in Hungary which were taken over by the USSR after World War II were united under so-called stock companies (aktsionernyye obschestva – A/Os). These A/Os were fully controlled by the Soviets and were directly subordinate to … Moscow. This organization in Hungary was called the Directorate for Soviet Property in Hungary (USIV). (SOVIET ECONOMIC ENTERPRISES IN HUNGARY, CIA, May 27, 1955 / June 21, 1955, p. 1) (IMG)

With the Soviets exercising their legal right according to the Hague Convention, the former Nazi German assets seized were fully subordinate to the Soviets:

All general directors and other key officials in these A/Os were Soviets. To all intents and purposes these A/Os were fully controlled and owned by the Soviets though the Hungarian Government may have owned a small percentage of the stock in some of the subordinate concerns. (SOVIET ECONOMIC ENTERPRISES IN HUNGARY, CIA, May 27, 1955 / June 21, 1955, p. 2) (IMG)

As with the rest of scientific central planning, the enterprises owned by the Soviets in Hungary would first draw up their own plans and would submit them to the central authorities in Moscow, so that the central authorities coordinate plans as part of the scientific central plan. The planning made with regards to the Soviet enterprises in Hungary would also be coordinated with the government of Hungary, such that the assets can be duly integrated into the Hungarian economy as well. As the CIA reported, information about the economic conditions in the Soviet-seized assets in Hungary would be collected and each enterprise would make plans:

such matters as yearly capital investment and yearly production plans for USIV enterprises … were first drawn up by individual plants for the coming year and submitted to the A/O under whose jurisdiction they happened to be. Each A/O administrative staff would then review these plans and work out a joint plan for the A/O. (SOVIET ECONOMIC ENTERPRISES IN HUNGARY, CIA, May 27, 1955 / June 21, 1955, p. 2) (IMG)

The central authorities of the A/O would:

then review these plans and work out a joint production and capital investment plan for all of USIV. After review … in Moscow, these plans were returned to .. Hungary and had to be integrated with the economic plans of Hungary. (SOVIET ECONOMIC ENTERPRISES IN HUNGARY, CIA, May 27, 1955 / June 21, 1955, p. 2) (IMG)

The CIA-MI6 mainstream media outlets propagate the narrative that the USSR utilized these joint-stock companies as means of importing cheap materials to its own economy. Such claims by media are debunked by the CIA, which not only admitted that the USSR coordinated its plans regarding its holdings in Hungary with the Hungarian government, but also admitted:

The majority of products manufactured by USIV plants were sold on the Hungarian internal market. Only a relatively small proportion of the goods was exported to the West or to the USSR. (SOVIET ECONOMIC ENTERPRISES IN HUNGARY, CIA, May 27, 1955 / June 21, 1955, p. 4) (IMG)

The majority of the goods produced by USIV plants was also sold to the Hungarian government. (SOVIET ECONOMIC ENTERPRISES IN HUNGARY, CIA, May 27, 1955 / June 21, 1955, p. 2) (IMG)

Furthermore, since the Hungarian government cooperated in integrating the Soviet enterprise plans with Hungary’s economic plans, the goods sold to the Hungarian government by these assets were for extremely low prices:

Industrial undertakings working for the Russians, mostly for reparation accounts, received all possible aid which the Hungarian government could offer, and the Russian military commanders, appointed for each of the factories up on the first day of occupation, did their utmost to increase the intensity of work. Governmental aid was, however, calculated only to stimulate production, since financial aid accorded to the industrial companies was compensated by setting of very low prices and backlogs in payments for deliveries made on orders placed by State agencies. (Foreign Holdings in Hungary, CIA, October 4, 1948, p. 3) (IMG)

Throughout the time in which the Soviets maintained their holdings in Hungary, the Soviets invested heavily in improving the conditions of the plants, multiplying its production. USSR also provided all kinds of welfare benefits for the predominantly-Hungarian workers in the plants:

From the time they were taken over by the Soviet Government after World War II until they were sold to the Hungarian government in October 1952, a large amount of capital was invested in USIV plants. On the average, the capacity of these plants was increased to double that of the prewar capacity by the construction of new shape and the addition of modern equipment and machinery. New living quarters for workers, nurseries for children of plant workers, rest centers, etc. were also constructed. In general these plants were more modern and better in every way than the average Hungarian plant. (SOVIET ECONOMIC ENTERPRISES IN HUNGARY, CIA, May 27, 1955 / June 21, 1955, p. 4) (IMG)

Note that the vast majority of those employed in the Soviet Property in Hungary were Hungarians:

Altogether there were perhaps 200 to 300 Soviets and several thousand Hungarians employed in USIV. (SOVIET ECONOMIC ENTERPRISES IN HUNGARY, CIA, May 27, 1955 / June 21, 1955, p. 1) (IMG)

By 1952, the USSR turned over several of these USIV enterprises to Hungary, as part of its aid to the Hungarian Peoples’ Democracy, and turned some of these USIV companies it owned into joint-stock companies wherein Hungary received 50% of the shares:

In October 1952, an agreement was reached whereby the enterprises in Hungary were turned over to the Hungarian government. Under this agreement the USSR received a sum of money for those plants and enterprises which were turned over but source did not know the specific terms of this exchange. At the same time the USSR formed four joint stock companies with the Hungarian government with the stock divided on a 50-50 basis. These four joint stock companies were composed of all former Soviet holdings not sold outright to the Hungarian government as well as Hungarian enterprises in the same economic field. In addition, USSR contributed a portion of perhaps all of the money received from the sale of their holdings in Hungary to this joint venture. These joint Soviet Hungarian companies were known as:

Maszolaj – the joint stock company which controlled the petroleum industry in Hungary. (…).

Mazobal – the joint stock company which controlled the Aluminum industry in Hungary. (…).

Maszovlet – the joint civil aid stock company in Hungary.

Meszhart – the joint stock company which controlled Danube shipping facilities in Hungary.

(SOVIET ECONOMIC ENTERPRISES IN HUNGARY, CIA, May 27, 1955 / June 21, 1955, p. 5) (IMG)


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