Question

Why did Communism fall in Europe in 1989 through 1991?

What are some of the most distinctive features of Europe since 1989? What are some of the biggest problems or potential problems?

Answer 1

1) Between the period from 1989 and 1991 there were stunning series of events that caused fall of communism regimes in Soviet Union and Europe. President Mikhail was unwilling to send troops of Soviet to the rescue when there was a huge popular opposition, communism governments first lost the power Poland, where the communists approved for free elections which in June 1989 swept into power candidates endorsed by Solidarity. In the fall of 1989 the reform demand spread across Easy Germany and led Berlin Wall to come down. The Soviet power structure with its closed borders, economic oppressions and mind control started to fall. After the fall of wall individuals could now be self-employed, climb up the social ladder, travel as according to their choice and enjoy foreign media. Czechoslovakia, the communist government in November 1989 resigned and a violent revolution in December in the same year led to the overthrow and execution of Nicolae Ceausescu, the communist boss of Romania. The Bulgarian in 1990 revoked the monopoly on power of the Communist party. In Albania in 1991 popular opposition forced for the communist resignation; and the party's control ended August 1991 on the military and government.

2) In 1991 after the collapse of the Russia’s controlled economy, a new Russian Federation was created in 1991 under Boris Yelstin. The Russian Federation undertook numerous economic reforms, including trade and market liberalization and privatization due to communism collapse. In the early 1990's since the Communism collapse, Russia has experienced several hurdles in making the economy transition from a centrally planned to a market based. Russia undertakes the transition with benefits and hurdles. The socialism system allowed leaders in Soviet Union to marshal resources quickly in crisis time, such as the Nazi invasion, and the country's reindustrialization during the post-war period.

The central planning entailed implementing monetary and fiscal policies that promote growth of economy in an environment of stable prices and exchange rates. The market-based economy needs an establishment of the commercial and institutional entities - banks, private property, and commercial legal codes which allows the economy to operate effectively. However the privatization transferred a large portion of wealth into the pockets of a few, making them immensely rich. The assets of nation became concentrated in the hands of a few rich people while several ordinary people faced a decline in the real value of their wages and pensions. There was an increase in corruption and crime. Moreover GDP between 1989 and 1998 decreased by 50% . The collapse of the value of the rouble resulted to a decline in confidence and deterred foreign investment. Although in the short term the nation struggle to compete however later exploited the benefits of comparative advantage.