Vladimír Mečiar ( Slovak pronunciation: [ˈʋlaɟimiːr ˈmetʂɪɐr] ; born 26 July 1942) is a Slovak former politician who served as the prime minister of Slovakia from June 1990 to May 1991, June 1992 to March 1994, and again from December 1994 to October 1998. He was the leader of the Movement for a Democratic Slovakia (HZDS), a populist party in Slovakia.
115-518: Mečiar led Slovakia during the dissolution of Czechoslovakia in 1992–93 and was one of the leading presidential candidates in Slovakia in 1999 and 2004. During his time in office, he was criticized for his autocratic style of governance and connections to organized crime , which became known as Mečiarizmus ("Mečiarism"). Mečiar was born in Detva in 1942 as the eldest of four boys. His father
230-598: A free market to a social market economy followed under the Jedermann Programm, and by late 1948 "the German transition followed a dual-track pattern with a planned core and a market-coordinated periphery." The government welcomed foreign investment and eliminated protectionist trade barriers , forcing Chilean businesses to compete with imports on an equal footing, or else go out of business. The main copper company, Codelco , remained in government hands due to
345-527: A Czech entrepreneur and visionary, outlined his ideas in the publication "Budujme stát pro 40 milionů lidí", where he described the future motorway system. Construction of the first motorways in Czechoslovakia begun in 1939, nevertheless, they were stopped after German occupation during World War II . Shock therapy (economics) In economics , shock therapy is a group of policies intended to be implemented simultaneously in order to liberalize
460-538: A ban on professional employment, the refusal of higher education for the dissidents' children, police harassment and prison. During the 1980s, Czechoslovakia became one of the most tightly controlled Communist regimes in the Warsaw Pact in resistance to the mitigation of controls notified by Soviet president Mikhail Gorbachev . In 1989, the Velvet Revolution restored democracy. This occurred around
575-627: A chance for many of their compatriots to participate in communal life before independence. Palacký supported Austro-Slavism and worked for a reorganized federal Austrian Empire , which would protect the Slavic speaking peoples of Central Europe against Russian and German threats. An advocate of democratic reform and Czech autonomy within Austria-Hungary, Masaryk was elected twice to the Reichsrat (Austrian Parliament), from 1891 to 1893 for
690-726: A day), by 1993-1995, it was 50%. According to Kristen Ghodsee and Mitchell A. Orenstein, a significant body of scholarship demonstrates that the rapid privatization schemes associated with neoliberal economic reforms did result in poorer health outcomes in former Eastern Bloc countries during the transition to capitalism, with the World Health Organization itself stating "IMF economic reform programs are associated with significantly worsened tuberculosis incidence, prevalence, and mortality rates in post-communist Eastern European and former Soviet countries." They add that Western institutions and economists were indifferent to
805-433: A decisive stroke could end monetary chaos, often in a day. Shock therapy proponents Sachs and Lipton argued in 1990: "The great conundrum is how to privatize a vast array of firms in a manner that is equitable, swift, politically viable, and likely to create an effective structure of corporate control." They recommended that the pace "must be rapid, but not reckless", and should "probably be carried out by many means". In
920-461: A frozen bank account. Although the money stock was very small in terms of national product, the adjustment in the price structure immediately led to sharp price increases, fueled by the high velocity of money through the system. As a result, on 4 October, the military governments wiped out 70% of the remaining frozen balances, resulting in an effective exchange of 10:0.65. Holders of financial assets (including many small-time savers) were dispossessed and
1035-522: A gradually developing economy. Poland was converging towards the EU in regards to income level in 1993–2004. According to Financial Times, Poland's shock therapy paved the way for entrepreneurs and helped to build an economy that was less vulnerable to external shock than Poland’s neighbours. In 2009, while the rest of Europe was in recession, Poland continued to grow, without a single quarter of negative growth. Due to rampant hyperinflation, famine, poverty, and
1150-658: A low of 9.5% in August 1998 before rising once more to a high of 20.7% in February 2003, from which it had fallen until the year 2008. During the early years, the unemployment rate is thought to have been lower due to many of those claiming unemployment working in the grey (informal) economy, although this can account for no more than 5% of the unemployment rate. Ownership of consumables (cars, TVs, VCRs, washing machines, refrigerators, personal computers, etc.) boomed, as did consumption of fruit and vegetables, meat and fish. However,
1265-467: A major factor in the 1980s. Slightly after the foundation of Czechoslovakia in 1918, there was a lack of essential infrastructure in many areas – paved roads , railways , bridges , etc. Massive improvement in the following years enabled Czechoslovakia to develop its industry. Prague 's civil airport in Ruzyně became one of the most modern terminals in the world when it was finished in 1937. Tomáš Baťa ,
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#17327832710911380-542: A pastoral one to prevent Germany from having the capacity for war. Civilian industries that might have military potential, which in the modern era of "total war" included virtually all, were severely restricted. The restriction of the latter was set to Germany's approved peacetime needs , which were set on the average European standard. To achieve this, each type of industry was subsequently reviewed to see how many factories Germany required under these minimum level of industry requirements. It soon became obvious that this policy
1495-511: A political monopoly was held by the Communist Party of Czechoslovakia (KSČ). The leader of the KSČ was de facto the most powerful person in the country during this period. Gustáv Husák was elected first secretary of the KSČ in 1969 (changed to general secretary in 1971) and president of Czechoslovakia in 1975. Other parties and organizations existed but functioned in subordinate roles to
1610-490: A regressive redistribution of wealth in favor of elites who held non-monetary assets. Contrary to the expectation of shock therapy proponents, Russia's rapid transition to the market increased corruption, rather than alleviating it. The cost to human life was profound, as Russia suffered the worst peace time increase in mortality experienced by any industrialized country. For the years 1987 and 1988, roughly 2% of Russia population lived in poverty (surviving on less than $ 4
1725-648: A threat to German rule. Just like Jews, Poles, Serbs, and several other nations, Czechs were considered to be untermenschen by the Nazi state. In 1940, in a secret Nazi plan for the Germanization of the Protectorate of Bohemia and Moravia it was declared that those considered to be of racially Mongoloid origin and the Czech intelligentsia were not to be Germanized. The deportation of Jews to concentration camps
1840-777: A unified Czechoslovakia was restored after World War II (after the country had been divided during the war), the conflict between the Czechs and the Slovaks surfaced again. The governments of Czechoslovakia and other Central European nations deported ethnic Germans, reducing the presence of minorities in the nation. Most of the Jews had been killed during the war by the Nazis. Ethnicities of Czechoslovakia in 1921 Ethnicities of Czechoslovakia in 1930 *Jews identified themselves as Germans or Hungarians (and Jews only by religion not ethnicity),
1955-586: Is a program intended to economically liberalize a mixed economy or transition a planned economy or developmentalist economy to a free-market economy through sudden and dramatic neoliberal reform. Shock therapy policies generally include ending price controls , stopping government subsidies , privatizing state-owned industries, and tighter fiscal policies , such as higher tax rates and lowered government spending. In essence, shock therapy policies can be distilled to price liberalization accompanied by strict austerity . The first instance of shock therapy
2070-728: The Danube River basin. The weather is mild winters and mild summers. Influenced by the Atlantic Ocean from the west, the Baltic Sea from the north, and Mediterranean Sea from the south. There is no continental weather. The area was part of the Austro-Hungarian Empire until it collapsed at the end of World War I . The new state was founded by Tomáš Garrigue Masaryk , who served as its first president from 14 November 1918 to 14 December 1935. He
2185-600: The NSDAP in the December 1938 elections. Almost every decree explicitly stated that the sanctions did not apply to antifascists. Some 250,000 Germans, many married to Czechs, some antifascists, and also those required for the post-war reconstruction of the country, remained in Czechoslovakia. The Beneš Decrees still cause controversy among nationalist groups in the Czech Republic, Germany, Austria and Hungary. Following
2300-711: The Sudetenland . On 29 September 1938, Britain and France ceded control in the Appeasement at the Munich Conference ; France ignored the military alliance it had with Czechoslovakia. During October 1938, Nazi Germany occupied the Sudetenland border region, effectively crippling Czechoslovak defences. The First Vienna Award assigned a strip of southern Slovakia and Carpathian Ruthenia to Hungary. Poland occupied Zaolzie, an area whose population
2415-477: The University of Massachusetts said: "As a result of shock therapy, Russia experienced a rise in mortality beyond that of any previous peacetime experiences of an industrialized country." The Gini ratio increased by an average of 9 points for all post-Communist states. The average post-Communist state had returned to 1989 levels of per-capita GDP by 2005, although some are still far behind that. In Russia,
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#17327832710912530-597: The Warsaw Pact of 1955. A period of political liberalization in 1968, the Prague Spring , ended when the Soviet Union, assisted by other Warsaw Pact countries, invaded Czechoslovakia . In 1989, as Marxist–Leninist governments and communism were ending all over Central and Eastern Europe , Czechoslovaks peacefully deposed their communist government during the Velvet Revolution , which began on 17 November 1989 and ended 11 days later on 28 November when all of
2645-790: The Young Czech Party , and from 1907 to 1914 for the Czech Realist Party , which he had founded in 1889 with Karel Kramář and Josef Kaizl . During World War I a number of Czechs and Slovaks, the Czechoslovak Legions , fought with the Allies in France and Italy, while large numbers deserted to Russia in exchange for its support for the independence of Czechoslovakia from the Austrian Empire. With
2760-680: The autonomous regions of Slovakia and Subcarpathian Ruthenia. Annexed by Hungary (1939–1945). ČSR; declared a "people's democracy" (without a formal name change) under the Ninth-of-May Constitution following the 1948 coup . ČSSR; from 1969, after the Prague Spring , consisted of the Czech Socialist Republic (ČSR) and Slovak Socialist Republic (SSR). Oblast of the Ukrainian SSR . Oblast of Ukraine . After World War II,
2875-432: The "invisible hand" and interprets Smith as thinking that the market as emerging slowly as the institutions that facilitate market exchange develop, and with the "invisible hand" the price mechanism could emerge. Illusion therapy refers to the imposition of shock economic policies on economy in a way that the society doesn't feel the shock or assumes that the dramatic change in policies is not as shocking or radical as it
2990-855: The 1946 parliamentary election, the Communist Party of Czechoslovakia was the winner in the Czech lands , and the Democratic Party won in Slovakia. In February 1948 the Communists seized power . Although they would maintain the fiction of political pluralism through the existence of the National Front , except for a short period in the late 1960s (the Prague Spring ) the country had no liberal democracy . Since citizens lacked significant electoral methods of registering protest against government policies, periodically there were street protests that became violent. For example, there were riots in
3105-551: The 1990s was twice as intense as the Great Depression in the countries of Western Europe and the United States in the 1930s. The hypothesized one time jump in prices intended as part of shock therapy actually led to a lengthy period of extremely high inflation with a drop in output and subsequent low growth rates. Shock therapy devalued the modest wealth accumulated by individuals under socialism and amounted to
3220-571: The 1998 elections, with 27% of the votes. However, he was unable to create a coalition, and Mikuláš Dzurinda from the opposition became the new Prime Minister. Afterwards, Mečiar was one of the two leading candidates for the first direct election of the president of Slovakia in 1999, but he was defeated by Rudolf Schuster . In 2000, Mečiar's HZDS was renamed "People's Party — Movement for a Democratic Slovakia". In 2000 Mečiar ostensibly gave up his political ambitions. His HZDS colleague Augustín Marián Húska said: "The NATO-War against Yugoslavia in 1999
3335-607: The Czech intelligentsia; the intellectual elites and middle class made up a considerable number of the 200,000 people who passed through concentration camps and the 250,000 who died during German occupation. Under Generalplan Ost , it was assumed that around 50% of Czechs would be fit for Germanization . The Czech intellectual elites were to be removed not only from Czech territories but from Europe completely. The authors of Generalplan Ost believed it would be best if they emigrated overseas, as even in Siberia they were considered
3450-629: The Czechs of the Protectorate Bohemia and Moravia, German occupation was a period of brutal oppression. Czech losses resulting from political persecution and deaths in concentration camps totaled between 36,000 and 55,000. The Jewish populations of Bohemia and Moravia (118,000 according to the 1930 census) were virtually annihilated. Many Jews emigrated after 1939; more than 70,000 were killed; 8,000 survived at Terezín. Several thousand Jews managed to live in freedom or in hiding throughout
3565-464: The EU. The 2002 elections saw the HZDS score a high percentage (20%) again. However, as in 1998, no other party was willing to serve under him. The result was another term in government for Dzurinda. The lower percentage of Mečiar's HZDS (20%) compared to the 1998 result (27%) was due to internal disputes within the organization shortly before the election, which caused many traditional HZDS members to leave
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3680-483: The German war effort was accelerated. Under the authority of Karl Hermann Frank , German minister of state for Bohemia and Moravia, some 350,000 Czech laborers were dispatched to the Reich. Within the protectorate, all non-war-related industry was prohibited. Most of the Czech population obeyed quiescently up until the final months preceding the end of the war, while thousands were involved in the resistance movement . For
3795-647: The Gulf War with a small force of 200 troops under the command of the U.S.-led coalition. In 1992, because of growing nationalist tensions in the government, Czechoslovakia was peacefully dissolved by parliament. On 31 December 1992, it formally separated into two independent countries, the Czech Republic and the Slovak Republic . ČSR; boundaries and government established by the 1920 constitution . Annexed by Nazi Germany . ČSR; included
3910-538: The June 1992 elections in Czechoslovakia and new prime ministers were the Civic Democratic Party led by Václav Klaus in the Czech Republic and the HZDS led by Vladimír Mečiar in Slovakia. Before and shortly after this election, the HZDS supported the creation of a looser federation—a confederation—between the two republics. However, its Czech counterpart wanted an even more centralized Czechoslovakia than
4025-817: The KSČ. All political parties, as well as numerous mass organizations, were grouped under umbrella of the National Front . Human rights activists and religious activists were severely repressed. Czechoslovakia had the following constitutions during its history (1918–1992): In the 1930s, the nation formed a military alliance with France, which collapsed in the Munich Agreement of 1938. After World War II , an active participant in Council for Mutual Economic Assistance ( Comecon ), Warsaw Pact , United Nations and its specialized agencies; signatory of conference on Security and Cooperation in Europe . Before World War II,
4140-670: The Slovak parliament was unable to elect a successor, so Mečiar also temporarily assumed the role of acting president. As president, he issued an amnesty for some of those accused of the abduction. As a result, Slovakia under his rule became partially isolated from the West and the pace of EU and NATO accession negotiations was much slower than in the case of neighboring countries, although Mečiar supported both EU and NATO memberships for his country and submitted Slovakia's applications to both organisations. Mečiar and HZDS narrowly finished first in
4255-604: The Slovaks, who were hostile to the more numerous Czechs, weakened the country in the late 1930s. Slovakia became autonomous in the fall of 1938, and by mid-1939, Slovakia had become independent, with the First Slovak Republic set up as a satellite state of Nazi Germany and the far-right Slovak People's Party in power . After 1933, Czechoslovakia remained the only democracy in central and eastern Europe. In September 1938, Adolf Hitler demanded control of
4370-502: The Soviet Union, gradually put the brakes on their earlier liberal policies. Meanwhile, one plank of the reform program had been carried out: in 1968–69, Czechoslovakia was turned into a federation of the Czech Socialist Republic and Slovak Socialist Republic . The theory was that under the federation, social and economic inequities between the Czech and Slovak halves of the state would be largely eliminated. A number of ministries, such as education, now became two formally equal bodies in
4485-620: The U.S. and the IMF for not providing large-scale financial aid to Russia, which he felt was integral to the success of the reforms. Advocates of shock therapy view Poland as the success story of shock therapy in the post-communist states and claim that shock therapy was not applied appropriately in Russia , while critics claim that Poland's reforms were the most gradualist of all the countries and contrast China's reforms with those of Russia and their vastly different effects. Some research suggests that
4600-637: The VPN began distancing themselves from him. First, the party split into two fractions in early March 1991: Mečiar supporters (mostly members of his cabinet) and Mečiar opponents (led by the VPN chairman Fedor Gál ). On 23 April 1991, the Presidium of the Slovak parliament ( Slovak National Council ) deposed him as premier of Slovakia and he was replaced by Ján Čarnogurský , the leader of the Christian Democratic Movement. Three days later,
4715-480: The VPN officially split in two: the Movement for a Democratic Slovakia (HZDS) and the remaining VPN (since October 1991 called ODÚ-VPN, later just ODÚ ). Mečiar was elected HZDS chairman in June 1991. In 1991 and 1992, there were frequent, but fruitless, negotiations between the Czech Republic and Slovak Republic concerning the future relations between the two constituent republics of Czechoslovakia. The winners of
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4830-750: The addition of the French occupied territory, became the basis for West Germany). Currency reform took effect on June 20, 1948, through the introduction of the Deutsche Mark to replace the Reichsmark and by transferring to the Bank deutscher Länder the sole right to print money. Under the German Currency Conversion Law on 27 June, private non-bank credit balances were converted at a rate of 10 RM to 1 DM, with half remaining in
4945-406: The average real income for 99 percent of people was lower in 2015 than in 1991. According to William Easterly , successful market economies rest on a framework of law, regulation, and established practice, which cannot be instantaneously created in a society that was formerly authoritarian, heavily centralised, and subject to state ownership of assets. German historian Philipp Ther asserted that
5060-641: The banks' debt in Reichsmarks was eliminated, transferred instead into claims on the Lander and later the Federal Government. Wages, rents, pensions and other recurring liabilities were transferred at 1:1. On the day of the currency reform, Ludwig Erhard announced, despite the reservations of the Allies, that rationing would be considerably relaxed and price controls abolished. In the short term,
5175-412: The colourful Ján Ľupták , a mason. During the following period, he was constantly criticized by his opponents and Western countries for an autocratic style of administration, lack of respect for democracy, misuse of state media for propaganda, corruption and the shady privatization of national companies that occurred during his rule. Privatization during the 1990s in both Slovakia and the Czech Republic
5290-532: The commission were Jeffrey Sachs, Stanisław Gomułka , Stefan Kawalec and Wojciech Misiąg . On October 6 the program was presented on public television and in December the Sejm passed a packet of 11 acts, all of which were signed by the president on December 31, 1989. These were: Privatization of companies was left until later. In the short term, the reforms smothered the building hyperinflation before it reached high levels, ended food shortages, restored goods on
5405-515: The consequences of the shock therapy they were advocating as their priorities included permanently dismantling the state socialist system and integrating these countries into the emerging global capitalist economy, and that many citizens of the former Eastern Bloc countries came to believe that Western powers were deliberately inflicting this suffering upon them as punishment for defying Western ideals about liberal democracy and market economics. Arguments exist whether these adverse outcomes were due to
5520-428: The currency reforms and abolition of price controls helped end hyperinflation. The new currency enjoyed considerable confidence and was accepted by the public as a medium of payment. The currency reforms had ensured that money was once scarcer, and the relaxation of price controls created incentives for production, sales and earning this money. The removal of price controls also meant shops filled up with goods again, which
5635-467: The democratically elected government. The economic situation was that inflation was high, peaking at around 600%, and the majority of state-owned monopolies and holdings were largely ineffective and completely obsolete in terms of technology. Although there was practically no unemployment in Poland, wages were low and the shortage economy led to a lack of even the most basic foodstuffs in the shops. Unlike
5750-540: The depression of 1990-1991 in the Soviet Union, Russian leaders attempted to implement shock therapy to the economy. This was not well-received by the Russian public, as it worsened issues and contributed to the rise of Russian oligarchs . The downfall of shock therapy in Russia was marked by widespread social dislocation, economic instability, and the rise of oligarchs, contributing to public criticism and eroding trust in
5865-506: The economic rehabilitation of Germany." It was replaced by JCS 1779, which instead stressed that "[a]n orderly, prosperous Europe requires the economic contributions of a stable and productive Germany." By 1948, Germany suffered from rampant hyperinflation. The currency of the time (the Reichsmark ) had no public confidence, and thanks to that and price controls, black market trading boomed and bartering proliferated. Banks were over their heads in debt and surplus currency abounded. Thanks to
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#17327832710915980-503: The economy was about the fourth in all industrial countries in Europe. The state was based on strong economy, manufacturing cars ( Škoda , Tatra ), trams, aircraft ( Aero , Avia ), ships, ship engines ( Škoda ), cannons, shoes ( Baťa ), turbines, guns ( Zbrojovka Brno ). It was the industrial workshop for the Austro-Hungarian empire. The Slovak lands relied more heavily on agriculture than the Czech lands. After World War II,
6095-484: The economy was centrally planned, with command links controlled by the communist party, similarly to the Soviet Union . The large metallurgical industry was dependent on imports of iron and non-ferrous ores. After World War II, the country was short of energy, relying on imported crude oil and natural gas from the Soviet Union, domestic brown coal , and nuclear and hydroelectric energy . Energy constraints were
6210-469: The economy, including liberalization of all prices, privatization , trade liberalization , and stabilization via tight monetary policies and fiscal policies . In the case of post-Communist states, it was implemented in order to transition from a command economy to a market economy . Notable proponents of shock therapy include American economist Jeffrey D. Sachs , who believes shock therapy should be accompanied by debt forgiveness . Shock therapy
6325-553: The expulsion of the ethnic German population from Czechoslovakia, parts of the former Sudetenland , especially around Krnov and the surrounding villages of the Jesenik mountain region in northeastern Czechoslovakia, were settled in 1949 by Communist refugees from Northern Greece who had left their homeland as a result of the Greek Civil War . These Greeks made up a large proportion of the town and region's population until
6440-661: The first and 7.02% (see main article). In the long term, the reforms paved the way for economic recovery, with the GDP growing steadily to about 6–7% between 1995–7, falling to a low of 1.2% in 2001 before rising back up to the 6–7% region by 2007, often led by small service businesses, long suppressed by the Communist government. However, despite GDP indicating prosperity for Poland, the unemployment rate continued to rise steadily, peaking at 16.9% in July 1994 before steadily falling down to
6555-552: The first time in its history. In the 2012 elections, the HZDS saw its vote collapse to 0.93%, leaving it again outside of parliament. Eventually, the party was dissolved in 2014. His wife Margita is a medical doctor, and they have three children. Czechoslovakia Czechoslovakia ( / ˌ tʃ ɛ k oʊ s l oʊ ˈ v æ k i . ə , ˈ tʃ ɛ k ə -, - s l ə -, - ˈ v ɑː -/ CHEK -oh-sloh- VAK -ee-ə, CHEK -ə-, -slə-, - VAH - ; Czech and Slovak : Československo , Česko-Slovensko )
6670-460: The free-market shock therapy proposed by Prague and Klaus' party to all of Czechoslovakia. After eight members of the parliament left the HZDS in March 1993, Mečiar lost his parliamentary majority. At the same time Mečiar's HZDS also lost the support of the president, Michal Kováč , who was originally nominated by the HZDS. However, it was only in March 1994 that he was unseated as prime minister by
6785-475: The general collapse of the Soviet economy (which began before 1989) or the policies subsequently implemented or a combination of both. Sachs himself resigned from his post as advisor, after stating that he felt his advice was unheeded and his policy recommendations were not actually put into practice. In addition to his criticism of the way in which Russian authorities handled the reforms, Sachs has also criticized
6900-612: The government's neoliberal reform agenda. It also contributed to the support for the rise of Vladimir Putin and his brand of authoritarianism . The term was popularized by Naomi Klein . In her 2007 book The Shock Doctrine , she argues that neoliberal free market policies (as advocated by the economist Milton Friedman ) have risen to prominence globally because of a strategy of "shock therapy". She argues these policies are often unpopular, result in greater inequality and are accompanied by political and social "shocks" such as military coups, state sponsored terror, sudden unemployment and
7015-452: The hope among shock therapy proponents is instead that the destruction of a command or planned economy would automatically result in a market economy and that expectation was that after the command economy or planned economy was "shocked to death", the " invisible hand " might emerge. According to Weber, expectations that a market economy would emerge following the imposition of shock therapy differ from Adam Smith 's original metaphor of
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#17327832710917130-457: The huge economic adjustment Poland underwent created massive anxiety. As of 2008, the GNP was 77% higher than in 1989. Moreover, inequality in Poland actually decreased right after the economic reforms were implemented, although it rose back up again in later years. Today, although Poland is confronted with a variety of economic problems, it still has a higher GDP than during communist times, and
7245-482: The hyperinflation just keeps roaring stronger. So shock therapy is get it over, get it done, stop hyperinflation, and then start rebuilding your economy so you achieve growth." Decree 21060 included the following measures: With the exception of Belarus, the Eastern European states adopted shock therapy. Nearly all of these post-Soviet states suffered deep and prolonged recessions after shock therapy, with poverty increasing more than tenfold. The resulting crisis of
7360-415: The ideas of economist Jeffrey Sachs . Economic liberalism rose to prominence after the 1960s and liberal shock therapy became increasingly used as a response to economic crises, for example by the International Monetary Fund (IMF) in the 1997 Asian Financial Crisis . Shock therapy has been controversial, with its proponents arguing that it helped to end economic crises, stabilized economies, and paved
7475-401: The imposition of shock therapy had little to do with future economic growth. Germany ended the European Theatre of World War II with its unconditional surrender on the 8 May 1945 . April 1945 to July 1947 saw the Allied occupation of Germany implement Joint Chiefs of Staff directive 1067 ( JCS 1067 ). This directive aimed to transfer Germany's economy from one centered on heavy industry to
7590-501: The inauguration of the President and decree 21060, he said: "We spent one week saying, 'Do we really need to do something? Do we really need radical change?' and then another week debating shock treatment versus gradualism. Finally, we took one week to write it all up." Once they had decided to act, de Lozada recalled of "a big discussion whether you could stop hyperinflation or inflation, period, by taking gradual steps". He added: "Many people said you had to take it slowly. You have to cure
7705-449: The introduction of JCS 1779 and the first Allied attempts to set up German governance, something could be done about this. Ludwig Erhard , an economist, who had spent much time working on the problem of post war recovery, had worked his way up the administration created by the occupying American forces until he became the Director of Economics in the Bizonal Economic Council in the joint British and American occupied zones (which later, with
7820-417: The late 1980s/early 1990s. Although defined as "Greeks", the Greek Communist community of Krnov and the Jeseniky region actually consisted of an ethnically diverse population, including Greek Macedonians , Macedonians , Vlachs , Pontic Greeks and Turkish speaking Urums or Caucasus Greeks . Carpathian Ruthenia (Podkarpatská Rus) was occupied by (and in June 1945 formally ceded to) the Soviet Union. In
7935-492: The most industrialized regions of the former Austria-Hungary. The new country was a multi-ethnic state, with Czechs and Slovaks as constituent peoples . The population consisted of Czechs (51%), Slovaks (16%), Germans (22%), Hungarians (5%) and Rusyns (4%). Many of the Germans, Hungarians, Ruthenians and Poles and some Slovaks, felt oppressed because the political elite did not generally allow political autonomy for minority ethnic groups. This policy led to unrest among
8050-440: The nationalization of copper completed by Salvador Allende but private companies were allowed to explore and develop new mines. In the short term, the reforms stabilized the economy. In the long term, Chile has had higher GDP growth than its neighboring countries but with a noticeable increase of income inequality . Between 1979 and 1982, Bolivia was ruled by a series of coups, countercoups, and caretaker governments, including
8165-412: The new government set out to do, saying: "People felt you couldn't stop hyperinflation in a democracy; that you had to have a military government, an authoritarian government to take all these tough steps that had to be taken. Bolivia was the first country to stop hyperinflation in a democracy without depriving people of their civil rights and without violating human rights." About the three weeks between
8280-564: The non-Czech population, particularly in German-speaking Sudetenland , which initially had proclaimed itself part of the Republic of German-Austria in accordance with the self-determination principle. The state proclaimed the official ideology that there were no separate Czech and Slovak nations, but only one nation of Czechoslovaks (see Czechoslovakism ), to the disagreement of Slovaks and other ethnic groups. Once
8395-410: The notorious dictatorship of Luis García Meza Tejada . This period of political instability set the stage for the hyperinflation that later crippled the country. In October 1982, the military convened a Congress elected in 1980 to lead choose a new Chief Executive. The country elected Hernán Siles Zuazo , under whose term the galloping hyperinflationary process started. Zuazo received scant support from
8510-497: The occupation. Despite the estimated 136,000 deaths at the hands of the Nazi regime, the population in the Reichsprotektorate saw a net increase during the war years of approximately 250,000 in line with an increased birth rate. On 6 May 1945, the third US Army of General Patton entered Plzeň from the south west. On 9 May 1945, Soviet Red Army troops entered Prague . After World War II, pre-war Czechoslovakia
8625-514: The occupations. In 1948, this provision was cancelled for the Hungarians, but only partially for the Germans. The government then confiscated the property of the Germans and expelled about 90% of the ethnic German population , over 2 million people. Those who remained were collectively accused of supporting the Nazis after the Munich Agreement , as 97.32% of Sudeten Germans had voted for
8740-400: The other post-communist countries, however, Poland did have some experience with a capitalist economy, as there was still private property in agriculture and food was still sold in farmers' markets. In September 1989 a commission of experts was formed under the presidency of Leszek Balcerowicz, Poland's leading economist, Minister of Finance and deputy Premier of Poland . Among the members of
8855-408: The outbreak of World War I, Masaryk began working for Czech independence in a union with Slovakia. With Edvard Beneš and Milan Rastislav Štefánik , Masaryk visited several Western countries and won support from influential publicists. The Czechoslovak National Council was the main organization that advanced the claims for a Czechoslovak state. The Bohemian Kingdom ceased to exist in 1918 when it
8970-519: The parliament ( National Council of the Slovak Republic ) and the opposition parties created a new government under Jozef Moravčík 's lead. However, after the elections held at the turn of September and October 1994, in which his HZDS won 35% of the votes, he became prime minister again — in a coalition with the far-right Slovak National Party headed by the controversial Ján Slota , and the radical-left Združenie robotníkov Slovenska headed by
9085-550: The party. Some of them created the HZD ( Movement for Democracy ) party led by Ivan Gašparovič . In 2003, further traditional HZDS members left the party and most of them created the People's Union (Ľudová únia). In the 2004 presidential election , Mečiar tried to become Slovak president again, but was defeated in the second round by his former, long-standing ally Ivan Gašparovič. In the 2006 parliamentary election in Slovakia, HZDS had
9200-450: The patient. Shock treatment means you have a very sick patient [and] you have to operate before the patient dies. You have to get the cancer out, or you have to stop the infection." He explained: "That's why we coined the phrase that inflation is like a tiger and you have only one shot; if you don't get it with that one shot, it'll get you. You have a credibility that you have to achieve. If you keep to gradualism, people don't believe you, and
9315-475: The political parties or members of congress, most of whom were eager to flex their newly acquired political muscles after so many years of authoritarianism. Zuazo refused to take extra-constitutional powers (as previous military governments had done in similar crises) and concentrated on preserving the democracy instead, shortening his term by one year in response to his unpopularity and the crisis racking his country. On 6 August 1985, President Víctor Paz Estenssoro
9430-663: The preservation of the Soviet, socialist system and vowed to intervene in any state that sought to replace Marxism-Leninism with capitalism . In the week after the invasion, there was a spontaneous campaign of civil resistance against the occupation. This resistance involved a wide range of acts of non-cooperation and defiance: this was followed by a period in which the Czechoslovak Communist Party leadership, having been forced in Moscow to make concessions to
9545-635: The prime architect of the Czechoslovak-Romanian-Yugoslav alliance (the " Little Entente ", 1921–38) directed against Hungarian attempts to reclaim lost areas. Beneš worked closely with France. Far more dangerous was the German element, which after 1933 became allied with the Nazis in Germany. Czech-Slovak relations came to be a central issue in Czechoslovak politics during the 1930s. The increasing feeling of inferiority among
9660-561: The reformer Alexander Dubček was appointed to the key post of First Secretary of the Czechoslovak Communist Party, there was a brief period of liberalization known as the Prague Spring . In response, after failing to persuade the Czechoslovak leaders to change course, five other members of the Warsaw Pact invaded . Soviet tanks rolled into Czechoslovakia on the night of 20–21 August 1968. Soviet Communist Party General Secretary Leonid Brezhnev viewed this intervention as vital for
9775-472: The same time as the fall of communism in Romania, Bulgaria, Hungary, East Germany and Poland. The word "socialist" was removed from the country's full name on 29 March 1990 and replaced by "federal". Pope John Paul II made a papal visit to Czechoslovakia on 21 April 1990, hailing it as a symbolic step of reviving Christianity in the newly-formed post-communist state. Czechoslovakia participated in
9890-460: The shelves of shops and halved the absence of employees in the work place. However, the reforms also caused many state companies to close at once, leaving their workers unemployed, and government statistics show this change as unemployment rose from 0.3% in January 1990 (just after the reforms) to 6.5% by the end of that year, and a shrinking in the GDP for the next two consecutive years by 9.78% in
10005-562: The state ceased to exist, as Slovakia proclaimed its independence and Carpathian Ruthenia became part of Hungary , while the German Protectorate of Bohemia and Moravia was proclaimed in the remainder of the Czech Lands . In 1939, after the outbreak of World War II , former Czechoslovak President Edvard Beneš formed a government-in-exile and sought recognition from the Allies . After World War II, Czechoslovakia
10120-504: The sum is, therefore, more than 100%. During the period between the two world wars Czechoslovakia was a democratic state. The population was generally literate, and contained fewer alienated groups. The influence of these conditions was augmented by the political values of Czechoslovakia's leaders and the policies they adopted. Under Tomas Masaryk , Czech and Slovak politicians promoted progressive social and economic conditions that served to defuse discontent. Foreign minister Beneš became
10235-502: The suppression of labor. The economist Jeffrey Sachs (sometimes credited with coining the term) says he never picked the term "shock therapy", does not much like it, and asserts that the term "was something that was overlaid by journalism and public discussion" and that the term "sounds a lot more painful in a way than what it is". Sachs' ideas on what has been referred by non-economists as "shock therapy" were based on studying historic periods of monetary and economic crisis and noting that
10350-475: The top Communist leaders and Communist party itself resigned. On 31 December 1992, Czechoslovakia peacefully split into the two sovereign states of the Czech Republic and Slovakia . The country was of generally irregular terrain. The western area was part of the north-central European uplands. The eastern region was composed of the northern reaches of the Carpathian Mountains and lands of
10465-481: The town of Plzeň in 1953 , reflecting economic discontent. Police and army units put down the rebellion, and hundreds were injured but no one was killed. While its economy remained more advanced than those of its neighbors in Eastern Europe, Czechoslovakia grew increasingly economically weak relative to Western Europe. The currency reform of 1953 caused dissatisfaction among Czechoslovak laborers. To equalize
10580-445: The two formally equal republics. However, the centralized political control by the Czechoslovak Communist Party severely limited the effects of federalization. The 1970s saw the rise of the dissident movement in Czechoslovakia, represented among others by Václav Havel . The movement sought greater political participation and expression in the face of official disapproval, manifested in limitations on work activities, which went as far as
10695-474: The very fast pace of 'shock therapy' privatization mattered and had a particularly harsh effect on the death rate in Russia. After the failure of the Communist government in the elections of June 4, 1989, it became clear that the previous regime was no longer legitimate. The unofficial talks at Magdalenka and then the Polish Round Table talks of 1989 allowed for a peaceful transition of power to
10810-569: The view of shock therapy proponents, trade liberalization requires domestic price liberalization first; thus a "big bang" in price liberalization underlying both privatization and trade liberalization forms the "shock" in the moniker "shock therapy". In practice, the rapid application of shock therapy proved generally disastrous in the post-Soviet states. Although economists have sometimes referred to shock therapy "creating" markets, Isabella Weber contends that shock therapy does not in fact create such new structures or institutions. She writes that
10925-410: The wage rate, Czechoslovaks had to turn in their old money for new at a decreased value. The banks also confiscated savings and bank deposits to control the amount of money in circulation. In the 1950s, Czechoslovakia experienced high economic growth (averaging 7% per year), which allowed for a substantial increase in wages and living standards, thus promoting the stability of the regime. In 1968, when
11040-533: The way for economic growth , while its critics including economist Joseph Stiglitz believed that it helped deepen them unnecessarily and created unnecessary social suffering. In post-Soviet Russia and other post-Communist states, neoliberal reforms based on the Washington Consensus resulted in a surge in excess mortality and decreasing life expectancy, along with rising economic inequality , corruption , and poverty . Isabella Weber of
11155-414: The worst election result in its history, just 8.79%. Mečiar requested an examination of the election results. While HZDS became part of Robert Fico 's coalition, Mečiar was not a Cabinet member. He declined to participate in the 2009 presidential election but also denied considering political retirement. In the 2010 parliamentary election , Mečiar's HZDS dropped to 4%, leaving it out of parliament for
11270-520: Was a landlocked country in Central Europe , created in 1918, when it declared its independence from Austria-Hungary . In 1938, after the Munich Agreement , the Sudetenland became part of Nazi Germany , while the country lost further territories to Hungary and Poland (the territories of southern Slovakia with a predominantly Hungarian population to Hungary and Zaolzie with a predominantly Polish population to Poland). Between 1939 and 1945,
11385-400: Was a huge psychological factor in the adoption of the new currency. As would later also occur in the post-Soviet states , shock therapy resulted in redistribution from the bottom-up, benefiting those who held non-monetary assets. Although Erhard's price liberalization excluded rents and essential goods, it still caused an increase in inflation and resulted in a general strike. A turn from
11500-491: Was a tailor, and his mother was a housewife. Starting in the Communist Party of Slovakia , the only road to prominence in Communist Czechoslovakia , he became committee chairman in the town of Žiar nad Hronom , only to be dismissed in the year after the 1968 Warsaw Pact invasion of Czechoslovakia , when he delivered a pro-reform speech to the national congress in 1969 and was thrown out. A year later he
11615-415: Was also a signal to us, to not pursue any vision of political independence anymore. We have seen what will happen to forces that want to be independent." In 2000, Mečiar was arrested by Slovak police on charges of fraud dating from his term in office. Mečiar was heavily favored to win the 2002 election, but it was thought that if he became prime minister again, it would end any chance of Slovakia getting into
11730-705: Was also expelled from the Communist Party and then added to the Communist Party Central Committee's long list of enemies of the socialist regime. He put himself through the Faculty of Law of the Comenius University while working in a glass factory. In late 1989, during the fast-paced anti-Communist Velvet Revolution , he joined the new political party, Public Against Violence (Verejnosť proti násiliu, VPN), which
11845-461: Was elected. On 29 August, just three weeks after the election of Víctor Paz Estenssoro as President, and the appointment of Gonzalo Sánchez de Lozada , the architect of shock therapy, as Planning Minister, Decree 21060 was passed. Decree 21060 covered all aspects of the Bolivian economy, later referred to as shock therapy. In the run-up to the decree, Gonzalo Sánchez de Lozada recalled what
11960-647: Was harmed by widespread unlawful asset stripping (also described by the journalistic term of tunnelling ). At the same time relations between Mečiar and the President of Slovakia, Michal Kováč were rather strained. He was also blamed for having engaged the Slovak secret service (SIS) in the abduction of the President's son Michal Kováč, Jr. — wanted on a warrant for a financial crime in Germany — to Hainburg, Austria , in August 1995, but his guilt has not been proven. However, after Kovač's term expired in March 1998
12075-647: Was incorporated into Czechoslovakia. Czechoslovakia was founded in October 1918, as one of the successor states of the Austro-Hungarian Empire at the end of World War I and as part of the Treaty of Saint-Germain-en-Laye . It consisted of the present day territories of Bohemia , Moravia , parts of Silesia making up present day Czech Republic , Slovakia , and a region of present-day Ukraine called Carpathian Ruthenia . Its territory included some of
12190-543: Was majority Polish, in October 1938. On 14 March 1939, the remainder ("rump") of Czechoslovakia was dismembered by the proclamation of the Slovak State , the next day the rest of Carpathian Ruthenia was occupied and annexed by Hungary, while the following day the German Protectorate of Bohemia and Moravia was proclaimed. The eventual goal of the German state under Nazi leadership was to eradicate Czech nationality through assimilation, deportation, and extermination of
12305-617: Was named Slovak prime minister (representing the VPN) of a coalition government of VPN and the Christian Democratic Movement . He advocated economic reform and continued federation with the Czechs. In 1990 the political landscape of the Czech Republic and Slovakia started to develop and many new political parties were formed, mainly from the Civic Forum and the VPN. By the end of 1990, some of Mečiar's partners in
12420-528: Was not sustainable. Germany could not grow enough food for itself, and malnutrition was becoming increasingly common. The European post-war economic recovery did not materialise and it became increasingly obvious that the European economy had depended on German industry. In July 1947, President Harry S. Truman rescinded on "national security grounds" the punitive JCS 1067, which had directed the U.S. forces of occupation in Germany to "take no steps looking toward
12535-475: Was organized under the direction of Reinhard Heydrich , and the fortress town of Terezín was made into a ghetto way station for Jewish families. On 4 June 1942 Heydrich died after being wounded by an assassin in Operation Anthropoid . Heydrich's successor, Colonel General Kurt Daluege , ordered mass arrests and executions and the destruction of the villages of Lidice and Ležáky . In 1943
12650-470: Was reestablished under its pre-1938 borders, with the exception of Carpathian Ruthenia, which became part of the Ukrainian SSR (a republic of the Soviet Union ). The Communist Party seized power in a coup in 1948 . From 1948 to 1989, Czechoslovakia was part of the Eastern Bloc with a planned economy . Its economic status was formalized in membership of Comecon from 1949 and its defense status in
12765-528: Was reestablished, with the exception of Sub carpathian Ruthenia , which was annexed by the Soviet Union and incorporated into the Ukrainian Soviet Socialist Republic . The Beneš decrees were promulgated concerning ethnic Germans (see Potsdam Agreement ) and ethnic Hungarians. Under the decrees, citizenship was abrogated for people of German and Hungarian ethnic origin who had accepted German or Hungarian citizenship during
12880-554: Was succeeded by his close ally Edvard Beneš (1884–1948). The roots of Czech nationalism go back to the 19th century, when philologists and educators, influenced by Romanticism , promoted the Czech language and pride in the Czech people . Nationalism became a mass movement in the second half of the 19th century. Taking advantage of the limited opportunities for participation in political life under Austrian rule, Czech leaders such as historian František Palacký (1798–1876) founded various patriotic, self-help organizations which provided
12995-499: Was the Slovak counterpart to the better-known Czech Civic Forum . On 11 January 1990, when the VPN was looking for professionals to participate in the government of Slovakia, Mečiar was appointed as Minister of the Interior and Environment of Slovakia on a recommendation of Alexander Dubček , who was impressed by Mečiar's thorough knowledge in all relevant fields. After the first democratic elections in Czechoslovakia in June 1990, he
13110-479: Was the case in 1992 or two separate countries. Since these two concepts were irreconcilable, Mečiar and Klaus agreed (after intense negotiations, but without having consulted the population in a referendum) on 23 July in Bratislava to dissolve Czechoslovakia and to create two independent states. As a result, Mečiar and Klaus became the prime ministers of two independent states on 1 January 1993. Mečiar also opposed
13225-509: Was the neoliberal reforms of Chile under Pinochet , carried out after the military coup by Augusto Pinochet . The reforms were based on the liberal economic ideas centered on the University of Chicago , which became known as the Chicago Boys . The term is also applied to Bolivia 's case. Bolivia successfully tackled hyperinflation in 1985 under President Victor Paz Estenssoro and Minister of Planning Gonzalo Sánchez de Lozada , using
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