Central Europe Emma Jane Riddle, 2009

Population

Gross Domestic Product

The Soviet Bloc: Eastern Europe The Soviet Union Bulgaria Romania Central Europe Czechoslovakia Hungary Poland East Germany

Other Communist Countries in Europe Albania – allied with China Yugoslavia, including present-day: –Bosnia –Croatia –Kosovo –Macedonia –Montenegro –Serbia –Slovenia

Communism in a Nutshell Command economy: the government owns and manages the means of production and distribution –The Soviet Union planned production and allocated resources for the entire Soviet bloc, except Romania. Basic goods, including food, were scarce. –Black market and barter economy People were taught that capitalists exploited workers and private business was evil.

Communism in a Nutshell (2) Totalitarian governments –The government controlled every aspect of life. –Almost every organization was dominated by the Communist party. –Police state –Writers, artists, filmmakers, musicians, and media were supposed to promote "socialist realism" – Communist interpretation of events. –Religious groups were limited or prohibited.

Percentage of Self-Identified Christians

Cultural Impact of Communism Work ethic –More employees than needed. –No reward for good work. –Those who protested against Communism lost their jobs or had to do menial jobs. Culture of dependency –Rent and food were subsidized. –Workplaces arranged vacations, camps for kids, and access to scarce goods.

Central European Culture Culture is a mixture of local and western European ideas –Architecture, art, music, literature –Understanding of democracy –History of political dissent and resistance to foreign occupation There was serious resistance to Communism in Poland, Hungary, and Czechoslovakia The end of Communism began in those countries.

After Communism, What? Democracy Prosperity –Market economy –EU membership –WTO membership –Euro currency (still in the future for some) Security: NATO membership These goals promoted political, economic, and cultural change.

Requirements to Join the EU Be a stable democracy, respecting human rights, the rule of law, and the protection of minorities. Have a functioning market economy that can compete in the EU. –State enterprises were privatized. Adopt EU laws, product standards, and regulations. The five central European countries joined the EU on January 1, 2004.

The Challenge of Free Markets Foreign investment was often needed to replace obsolete equipment and facilities. Privatized firms employed fewer people. Enterprises devoted to military production often could not be made profitable and had to close. The distribution network in the Soviet bloc collapsed. The education system had to be overhauled.

Benefits of EU Membership Ability to export to markets in western Europe In 2011, citizens of countries that joined the EU in 2004 will be able to live and work in any EU country. Economic development aid from the EU

Requirements to Use the Euro Currency Stable consumer prices – low inflation Government budget deficit <= 3% of GDP National debt <= 60% of GDP Stable long-term interest rate Value of the national currency must be stable relative to the euro Slovenia and Slovakia use the euro

Requirements to Join NATO A democratic political system, based on a market economy Fair treatment of minority populations Commitment to resolving conflicts peacefully Ability and willingness to contribute to NATO military operations Commitment to democratic civil-military relations The five central European countries are NATO members.

Business Culture in Poland Design products for Poland. Do your homework. Poles are often shrewd negotiators. Be prepared to provide data. People are not impressed by "sales talk". Be prepared to make a long-term commitment. Take time to build relationships and gain trust. Be willing to "give something back" to the community.

Business Culture in Poland (2) Don't be afraid to ask questions about things that you don't understand. It's okay to ask sensitive questions, but be polite. If a question is important, keep asking until you get an answer. –You may have to ask the question differently. Local governments have a large role in business regulation. Some areas are more conducive to business than others.

Business Culture in Poland (3) Professional titles are used in Poland. Example: engineer Do not call people by their first names until you are invited to do so. Business entertainment should be reciprocated. Be patient. Establishing a business will take longer than it would in the U. S. Work with a local advertising agency.