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By 1920, Hungarian nationalists proclaimed the country a kingdom once more, yet the regent Horthy dominated political life. Horthy wielded near-royal powers—able to dissolve parliament and shape military and civil policy—yet the throne remained vacant, and the monarchy was unrestored officially.
Many in Hungarian political circles, especially monarchists and conservative groups, supported Karl's return, seeing it as a remedy to chaos. Notably, figures such as diplomats Gustaf Gratz, Albert Aoni, and parliamentarian Eán Rákoski, many connected to the old aristocracy and Habsburg loyalists, saw Karl as Hungary’s legitimate king. This coalition, often called the "Carlists," aimed to restore the monarchy and reinstate the Habsburg dynasty.