Budapest — Hungary is a country of contrasts.
Although a communist state, its sense of history allowed it to restore the war-ravaged former royal palace on the Danube's Buda bank largely to the way it was in the days of Maria Theresa.
More recently, four splendidly designed tourist hotels have sprung up on a river embankment that is arguably the most beautiful in any city in Central or Eastern Europe.
Contrasts with its East-bloc neighbors appear the moment one arrives at the airport.
From plane to town-bound taxi recently took just five minutes - remarkably different from Poland where the atmosphere is forbidding and arrival processing must be the slowest in Europe. Here I had my passport stamped, made a speedy ''nothing to declare'' exit, and found no taxi pirates waiting outside for foreign prey.
In Warsaw, airport cabbies let passengers know they are interested only in dollars. But taxi drivers here turn on their meters for payment in Hungarian forints without fail.
These superficial considerations are the first inkling a visitor gets that Hungary has something its allies lack - a pleasantly buoyant atmosphere.
An imaginatively reformed and better-managed economy is the main reason. It has made for a more generally satisfied population - and a surprisingly firm currency.
Unlike other East-bloc coinage, Hungary's forint is as real and firm in purchasing power as the long-accepted Yugoslav dinar.
Hungary has effectively recut an alien economic system to fit its own conditions. Since 1968, it has operated under a New Economic Mechanism (NEM). World recession in the mid-1970s forced some braking, and Hungary was the first East-bloc state to stop pretending its ''socialist'' economy was immune to exploding world energy prices.
But now pragmatic Hungarians candidly call themselves to account for not being quick enough to see it. They are paying the price, they say, in a package of economic difficulties.
Despite increased energy costs, they resumed NEM some years ago and are pushing it even more firmly toward a more market-minded economy.
Reform has brought Hungary a remarkable international credit-worthiness and numerous profitable joint industrial ventures with major Western concerns. The country's agriculture is uniquely successful. It not only feeds the country well , but also is the backbone of its foreign trade. This country exports grain to the Soviet Union.
Hungary has been opening the door wider to individual, private enterprise in small businesses and services that are beginning to meet some consumer needs the government readily admits it has neglected. It is all part of an internal approach that sets Hungary apart politically, as well as economically, from its allies.
Janos Kadar, the country's leader since 1956, makes no bones about the Soviet alliance being the country's essential basis and shaping foreign policy accordingly. The alliance has little effect on domestic tolerances that do not exist elsewhere in the bloc - especially freedom to travel and tolerance of dissent.
Laszlo Rajk, for example, is an architect. He works for the municipality for a meager salary.
He and like-minded dissident friends travel, some to the West. In their spare time they operate a clandestine publishing group that prints literature and poetry thatoversteps the boundaries of ''normal'' publications.
Anyone can drop in to browse through copies of mimeographed manuscripts.
He knows that such activity would not be tolerated by Hungary's allies. But like many other young people whom the generally popular Kadar way fails to reach , he is impatient and skeptical. ''They,'' he says, ''can clamp down on what we are doing at any time.''
True enough, but the impression one gets is that ''they'' won't as long as Hungary can continue on its present practical social and economic course.