Prime minister of Hungary from 1994 to 1998 who initiated his country's entry into the Common Market and improved relations with the west
On 27 July 1989, the foreign secretaries of Austria, Alois Mock, and of Hungary, Gyula Horn, met up to cut the barbed-wire fencing that had been separating their two countries for decades. This act symbolically marked the end of the cold war. A few weeks later, Horn's government gave the go-ahead to the East German refugees who had been camping out on the premises of the West German embassy in Budapest to cross over to Austria, and to the west, without restrictions.
These two events were the highlights of Horn's career and the following year he was awarded the prestigious Charlemagne prize of Aachen, which is given to outstanding statesmen – Sir Winston Churchill had been an earlier recipient.
Horn, who has died aged 80, went on to become prime minister of Hungary from 1994 to 1998. Though he was not a great public speaker, his sense of humour and his earthy delivery set him apart from his rather stiff socialist colleagues, confirming his place as one of the most popular post-communist premiers.
Horn was born into a working-class family in Budapest. His father was killed by the Gestapo during the German occupation of Hungary in 1944, so Horn had to work from an early age. In 1949 he obtained his high school certificate and he went on to study accounting at Rostov-on-Don in the Soviet Union (1950-54). On his return, he joined Hungary's Communist party and was given a clerical post in one of the ministries.
The Hungarian revolution of October 1956 was a turning point for Horn's career. After the armed resistance was crushed by the Soviet army, communist police squads were set up all over Hungary. These so-called "padded-coated" brigades – pufajkások– were supposed to establish order, but were in fact there to terrorise the population. To his discredit, Horn joined one of these groups, apparently to avenge the death of his brother at the hands of the "counter-revolutionaries". His reputation was marred by this, though his past did not stand in the way of his eventually becoming premier.
From 1959 Horn was employed in the ministry of foreign affairs, where he had advanced to head of department by 1969. In 1985 he became undersecretary in the same ministry and according to Sir Malcolm Rifkind, who at the time was minister of state at the Foreign Office, it was Horn who – without the knowledge of Moscow – initiated negotiations for Hungary's entry into the Common Market. In 1989 Horn became foreign minister and his action of allowing the exit of East German refugees to the west made his reputation.
In March 1990 it was Horn who signed the agreement for Soviet troops to withdraw from Hungary, which took place a year later. He also signalled Hungary's wish to join Nato. In the first free elections in 1990, his party, the Hungarian Socialist party (formerly the Communist party), managed to win only a handful of seats. Horn took over the leadership and in the next election, four years later, his party swept to victory, winning 54% of the vote. In order to calm the fears of western investors, Horn invited the free-market Liberal Free Democrats to join the government. Hesitation in reforming the economy in 1994-95 decreased Horn's popularity, though eventually he agreed to budget cuts introduced by the finance minister, Lajos Bokros, which then stabilised the economy.
Apart from popular discontent following the "Bokros package", it was a corruption affair (a lawyer, Márta Tocsik, transferring funds to the Socialist party), in which Horn was personally not involved, which brought down the government in 1998. Prior to this, he had courted popularity by giving a 13th month's salary to all employees as well as increasing benefits for pensioners, neither of which was financially sustainable. The much younger and energetic Victor Orbán's rightwing coalition came to power at the 1998 elections and Horn once again had to take a seat on the opposition benches.
He did not play a significant role in the close victory of the Socialist-Liberal coalition in 2002. In 2007 he fell ill and was hospitalised for the remaining six years of his life. His international reputation remained good and until his final illness he was vice-president of the Socialist International.
Horn wrote two books of memoirs: Cölöpök(Stilts, 1999) relates his early life, including his student years in the Soviet Union; Azok a Kilencvenes Evek (Those Nineties, 2012) deals with his later political career.
He is survived by his wife, Anna, and their daughter, Anna, and son, Gyula Jr.
• Gyula Horn, politician, born 5 July 1932; died 19 June 2013