The social-economic transition to capitalism in Hungary featured a heavy external debt and the consequent limitations stemming from it. Without knowing these limitations no present problems can be properly understood. First of all, the determination of the economic structure of Hungary – which supports external debt accumulation – has its roots in this fact. The operation of the political system is adequate for the "banana republic status" of Hungary. Parochial political decisions also contribute to the creation of an environment in which the forint can successfully be attacked.