Hungary was shocked (and embarrassed) by the Kosovo War. Coming just 12 days after Hungary formally joined NATO, the Kosovo War shook the Hungarians out of their dream that joining NATO meant an end to conflict and instead put them on the front line of an entirely new war likely to go on for decades. Hungary was embarrassed that its own fighters could not fly patrols over its own territory because the MiG-29s lacked NATO identification-friend-or-foe devices and would likely have been shot down by US aircraft operating from Hungarian airfields. When the Kosovo War was over, the Army asked for an got $14 million to create a 325-man battalion to join the NATO stabilization force in Kosovo, but then needed four weeks to assemble even so small a force. As a result of this, Hungary has finally begun a serious reform of its armed forces. While the Cold War army of 160,000 had been cut to 60,000, it had insisted on retaining bases and old generals it no longer needed. Thousands of young officers and new sergeants left the Army at the end of their first tour for better civilian jobs. Morale plummeted. The defense budget, which had fallen to half of the Cold War level, has now been increased again and the force will be cut from 60,000 to 45,000 to free money for modernization. Many old generals have been forced to retire and 24 small garrisons have been closed. With older officers forced out, Hungary wants to have a ratio of three professional sergeants to each officer. New NCO schools are actually teaching Western concepts of troop leadership, rather than the Cold War era system wherein sergeants were mostly figureheads. The first phase (through 2002) will focus on restructuring the military for more rapid deployment, and urgent technical needs such as IFFs for the MiG-29s. The second phase, 2003-2006, will focus on training troops and the replacement of old equipment. Hungary has two divisions, the 2nd (which is part of the NATO Main Defense Force and primarily exists to train troops) and the 3rd (which is to become part of the NATO rapid reaction force). The 3rd Division has three mechanized brigades, two recon battalions, a rapid reaction battalion, and an artillery brigade. Troops are carried in new BTR-80s delivered by Russia as payment for Moscow's debts to Hungary. Tanks include 200 relatively new T-72s.The most significant purchase of Western weapons to date is 45 truck-mounted Mistral air defense missile launchers.--Stephen V Cole