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Central Europe

Central Europe. Emma Jane Riddle, 2009. Population. Gross Domestic Product. Eastern Europe The Soviet Union Bulgaria Romania. Central Europe Czechoslovakia Hungary Poland East Germany. The Soviet Bloc: 1945-1989. Other Communist Countries in Europe. Albania – allied with China

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Central Europe

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  1. Central Europe Emma Jane Riddle, 2009

  2. Population

  3. Gross Domestic Product

  4. Eastern Europe The Soviet Union Bulgaria Romania Central Europe Czechoslovakia Hungary Poland East Germany The Soviet Bloc: 1945-1989

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

  6. 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.

  7. 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.

  8. Percentage of Self-Identified Christians - 2008

  9. 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.

  10. 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.

  11. 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.

  12. 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.

  13. 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.

  14. 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

  15. 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

  16. 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.

  17. 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.

  18. 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.

  19. 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.

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