Rákosi had difficulty managing the economy and the people of Hungary
saw living standards fall. His government became increasingly
unpopular, and when Joseph Stalin died in 1953, Mátyás Rákosi was
replaced as prime minister by Imre Nagy. However, he retained his
position as general secretary of the Hungarian Working People's Party
and over the next three years the two men became involved in a bitter
struggle for power.
As Hungary's new leader, Imre Nagy removed state control of the mass media and encouraged public discussion on political and economic reform. This included a promise to increase the production and distribution of consumer goods. Nagy also released anti-communists from prison and talked about holding free elections and withdrawing Hungary from the Warsaw Pact.
Mátyás Rákosi led the attacks on Nagy. On 9 March 1955, the Central Committee of the Hungarian Working People's Party condemned Nagy for "rightist deviation". Hungarian newspapers joined the attacks and Nagy was accused of being responsible for the country's economic problems and on 18 April he was dismissed from his post by a unanimous vote of the National Assembly. Rákosi once again became the leader of Hungary.
Rákosi's power was undermined by a speech made by Nikita Khrushchev in February 1956. He denounced the policies of Joseph Stalin and his followers in Eastern Europe. He also claimed that the trial of László Rajk had been a "miscarriage of justice". On 18 July 1956, Rákosi was forced from power as a result of orders from the Soviet Union. However, he did manage to secure the appointment of his close friend, Ernő Gerő, as his successor.
On 3 October 1956, the Central Committee of the Hungarian Working People's Party announced that it had decided that László Rajk, György Pálffy, Tibor Szőnyi and András Szalai had wrongly been convicted of treason in 1949. At the same time it was announced that Imre Nagy had been reinstated as a member of the party.