A Short Postcommunist Economic History of Emerging Europe

Due to the collapse of the former Soviet Empire, new market economies experienced a large-scale loss of external markets, the loss of former economic relations, that is, a devastating external shock. The transformation shock led to escalating internal and external debts, double-digit inflation, asset devaluation, and the capital loss of the corporate, and the financial sectors. This chapter gives a short economic history of the Central and Eastern European (CEE) countries since the transition of 1990 and details the precrisis political and economic environment in Hungary, with special regard for the fiscal alcoholism and the crisis of the socialist government 2002–2010.