History of Czechoslovakia
with the collapse of the habsburg monarchy at the end of world war one the independent country of czechoslovakia was formed as a result of the critical intervention of u.s president woodrow wilson among others the czechs and slovaks were not at the same level of economic and technological development but the freedom and opportunity found in an independent czechoslovakia enabled them to make strides toward overcoming these inequalities however the gap between cultures was never fully bridged and this discrepancy played a disruptive role throughout the 75 years of the union political history historical background to 1918 the creation of czechoslovakia in 1918 was the culmination of a struggle for ethnic identity and self-determination that had simmered within the multinational empire ruled by the austrian habsburg family in the 19th century the czechs had lived primarily in bohemia since the 6th century and german immigrants had settled the bohemian periphery since the 13th century after 1526 bohemia came under the control of the house of habsburg as their science first became the elected rulers of bohemia then the hereditary rulers of the country following the battle of white mountain in 1620 the kingdom of bohemia was gradually integrated into the habsburg monarchy as one of its three principal parts alongside the archduchy of austria and the kingdom of hungary with the rise of nationalist political and cultural movements in the czech lands and the slovak lands mounting ethnic tensions combined with repressive religious and ethnic policies pushed the cohesion of the multinational austro-hungarian empire ruled by the habsburgs to breaking point subject peoples all over the austro-hungarian empire wanted to be free from the rule of the old aristocracy and the imperial family this frustration was partly eased by the introduction of local ethnic representation and language rights however the first world war put a stop to these reform efforts and ultimately caused the internal collapse of the austro-hungarian empire and the liberation of subject people such as the czechs and slovaks although the czechs and slovaks speak languages that are very similar the political and social situation of the czech and slovak peoples was very different at the end of the 19th century the reason was the differing attitude and position of their overlords the austrians in bohemia and moravia and the hungarians in slovakia within austria-hungary bohemia was the most industrialized part of austria and slovakia was the most industrialized part of hungary however at very different levels of development furthermore the hungarians were far more determined to assimilate the slovaks than the austrians were to assimilate the czechs around the start of the 20th century the idea of a czech slovak entity began to be advocated by some czech and slovak leaders after contacts between czech and slovak intellectuals intensified in the 1890s despite cultural differences the slovaks shared similar aspirations with the czechs for independence from the habsburg state in 1917 during world war one tomas masarik created the czechoslovak national council together with edvard bennis and milan stefanik masarik in the united states stefanik in france and venice in france and britain worked tirelessly to secure allied recognition about 1.4 million czech soldiers fought in world war 1 150 000 of which died more than 90 000 czech and slovak volunteers formed the czechoslovak legions in russia france and italy where they fought against the central powers and later with white russian forces against bolshevik troops at times they controlled much of the trans-siberian railway and they were indirectly involved in the shooting of the russian tsar and his family in 1918. their goal was to win the support of the allies for the independence of czechoslovakia they succeeded on all counts when secret talks between the allies and austrian emperor charles the first collapsed the allies recognized in the summer of 1918.
the czechoslovak national council would be the colonel of the future czechoslovak government the first republic the independence of czechoslovakia was officially proclaimed in prague on the 28th of october 1918 in smetana hall of the municipal house a physical setting strongly associated with nationalist feeling the slovaks officially joined the state two days later in the town of martin a temporary constitution was adopted and tomas masarik was declared president on the 14th of november the treaty of saint germain signed in september 1919 formally recognized the new republic ruthenia was later added to the czech lands in slovakia by the treaty of trionon in june 1920. there were also various border conflicts between poland and czechoslovakia due to the a-nection of zawalzi region the new state was characterized by problems with its ethnic diversity the separate histories of the czech and slovak peoples and their greatly differing religious cultural and social traditions the germans and magyars of czechoslovakia openly agitated against the territorial settlements nevertheless the new republic saw the passage of a number of progressive reforms in areas such as housing social security and workers rights the new nation had a population of over 13.5 million and found itself in control of 70 to 80 of all the industry of the former austro-hungarian empire which gave it the status of one of the world's 10 most industrialized countries still the czech lands were far more industrialized than slovakia most light and heavy industry was located in the german-dominated sadeton land and most industrial concerns there were controlled by germans and german-owned banks subcarpathian ruthenia was essentially without industry in 1929 the gross domestic product increased by 52 in industrial production by 41 as compared to 1913. in 1938 czechoslovakia held 10th place in the world for industrial production the czechoslovak state was conceived as a representative democracy the constitution identified the czechoslovak nation as the creator and principal constituent of the czechoslovak state and established czech and slovak as official languages the concept of the czechoslovak nation was necessary in order to justify the establishment of czechoslovakia before the world otherwise the statistical majority of the czechs as compared to germans would be rather weak the operation of the new czechoslovak government was distinguished by its political stability largely responsible for this were the well-organized political parties that emerged as the real centers of power after 1933 czechoslovakia remained the only democracy in central and eastern europe the second republic although czechoslovakia was the only central european country to remain a parliamentary democracy during the entire period 1918-1938 it faced problems with ethnic minorities such as hungarians poles and sudeten germans which made up the largest part of the country's german minority the germans constituted 3 to 3.5 million out of 14 million of the interwar population of czechoslovakia and were largely concentrated in the bohemian and moravian border regions known as the sadetten land in german some members of this minority which was predominantly sympathetic to germany attempted to undermine the new czechoslovak state adolph hitler's rise in nazi germany in 1933 the german annexation of austria in 1938 the resulting revival of revisionism in hungary the agitation for autonomy in slovakia and the appeasement policy of the western powers of france and the united kingdom left czechoslovakia without effective allies exposed to hostile germany and hungary on three sides into unsympathetic poland on the north after the acquisition of austria czechoslovakia was to become hitler's next target the german nationalist minority in czechoslovakia led by conrad henlein and fervently backed by hitler demanded a union of the predominantly german districts of the country with germany on the 17th of september 1938 hitler ordered the establishment of sadetnduch's frey corpse a paramilitary organization that took over the structure of ordnance group an organization of ethnic germans in czechoslovakia that had been dissolved by the czechoslovak authorities the previous day due to its implication in large number of terrorist activities the organization was sheltered trained and equipped by german authorities and conducting cross-border terrorist operations into czechoslovak territory relying on the convention for the definition of aggression czechoslovak president edvard bennis and the government in exile later regarded the 17th of september 1938 as the beginning of the undeclared german czechoslovak war this understanding has been assumed also by the contemporary czech constitutional court hitler extorted the session of the bohemian moravian and czech silesian borderlands through the munich agreement on the 29th of september signed by germany italy france and britain the czech population in the annexed lands was to be forcibly expelled finding itself abandoned by the western powers the czechoslovak government agreed to abide by the agreement bennis resigned as president of the czechoslovak republic on the 5th of october 1938. fled to london and was
succeeded by emil hasha in early november 1938 under the first vienna award a result of the munich agreement czechoslovakia was forced by germany and italy to cede southern slovakia to hungary after an ultimatum on the 30th of september poland obtained the disputed zawalzi region as a territorial session shortly after the munich agreement on the 2nd of october the ultimatum was only sent after check request the czechs in the greatly weakened czechoslovak republic were forced to grant major concessions to the non-czechs resident in the country the executive committee of the slovak people's party met at zelena on the 5th of october 1938 and with the acquiescence of all slovak parties except the social democrats formed an autonomous slovak government under yosef tiso similarly the two major factions in subcarpathian ruthenia the russophiles and ukranophiles agreed on the establishment of an autonomous government that was constituted on the 8th of october 1938. in late november 1938 the truncated state renamed czechoslovakia was reconstituted in three autonomous units the czech lands slovakia and ruthenia on the 14th of march 1939 the slovak state declared its independence as a satellite state under yosef tiso hitler forced hasha to surrender what remained of bohemia and moravia to german control on the 15th of march 1939 establishing the german protectorate of bohemia and moravia on the same day the carpatho ukraine declared its independence and was immediately invaded and annexed by hungary finally on the 23rd of march hungary invaded and occupied some further parts of eastern slovakia from carpatho ukraine second world war benis and other czechoslovak exiles in london organised a czechoslovak government in exile and negotiated to obtain international recognition for the government and a renunciation of the munich agreement the government was recognized by the government of the united kingdom with the approval of foreign secretary lord halifax on the 18th of july 1940. in july and december 1941 the soviet union and united states also recognized the exiled government respectively czechoslovak military units fought alongside allied forces in december 1943 venice's government concluded a treaty with the soviet union bennis worked to bring czechoslovak communist exiles in britain into active cooperation with his government offering far-reaching concessions including nationalization of heavy industry and the creation of local people's committees at the war's end in march 1945 he gave key cabinet positions to czechoslovak communist exiles in moscow the assassination of reich's protector reinhard heydrich in 1942 by a group of british-trained czech and slovak commandos led by jan kubis and joseph gabcik led to reprisals including the annihilation of the village of litus all adult male inhabitants were executed while females and children were transported to concentration camps a similar fate met the village of lizaki and later at the end of war juvorico on the 8th of may 1944 bennis signed an agreement with soviet leaders stipulating that czechoslovak territory liberated by soviet armies would be placed under czechoslovak civilian control from the 21st of september 1944 czechoslovakia was liberated by the soviet troops of the red army and the romanian army supported by czech and slovak resistance from the east to the west only southwestern bohemia was liberated by other allied troops from the west in may 1945 american forces liberated the city of pulzen a civilian uprising against the nazi garrison took place in prague in may 1945. the resistance was assisted by the heavily armed russian liberation army i.e gen vlassov's army a force composed of soviet pals organized by the germans who now turned against them the main brutality suffered in the lands of the pre-war czechoslovakia came as an immediate result of the german occupation in the protectorate the widespread persecution of jews and after the slovak national uprising in august 1944 repression in slovakia in spite of the oppressiveness of the government of the german protectorate czechoslovakia did not suffer the degree of population loss that was witnessed during world war ii in countries such as poland and the soviet union and it avoided systematic destruction of its infrastructure bratislava was taken from the germans on the 4th of april 1945 and prague on the 9th of may 1945 by soviet troops both soviet and allied troops were withdrawn in the same year a treaty seating carpatho ukraine to the soviet union was signed in june 1945 between czechoslovakia and the soviet union following an apparently rigged soviet-run referendum in carpatho ukraine the potsdam agreement provided for the expulsion of sudeten germans to germany under the supervision of the allied control council decisions regarding the hungarian minority reverted to the czechoslovak government in february 1946 the hungarian government agreed that czechoslovakia could expatriate as many hungarians as there were slovaks in hungary wishing to return to czechoslovakia the third republic and the communist takeover the third republic came into being in april 1945.
its government installed at cosis on the 4th of april then moved to prague in may was a national front coalition in which three socialist parties the communist party of czechoslovakia the czechoslovak social democratic party and the czechoslovak national socialist party predominated certain non-socialist parties were included in the coalition among them the catholic people's party and the democratic party of slovakia following nazi germany's surrender some 2.9 million ethnic germans were expelled from czechoslovakia with allied approval their property and rights declared void by the bennis decrees czechoslovakia soon came to fall within the soviet sphere of influence the popular enthusiasm evoked by the soviet armies of liberation benefited the case czechoslovaks bitterly disappointed by the west at the munich agreement responded favorably to both the case and the soviet alliance reunited into one state after the war the czechs and slovaks set national elections for the spring of 1946. the democratic elements led by president edvard bennis hoped the soviet union would allow czechoslovakia the freedom to choose its own form of government and aspired to a czechoslovakia that would act as a bridge between east and west communists secured strong representation in the popularly elected national committees the new organs of local administration in the may 1946 election the case won most of the popular vote in the czech part of the bi-ethnic country and the more or less anti-communist democratic party won in slovakia in some however the kaske only won a plurality of 38 percent of the vote at countrywide level edvard bennis continued as president of the republic whereas the communist leader clement gottwald became prime minister most importantly although the communists held only a minority of portfolios they were able to gain control over most of the key ministries although the communist-led government initially intended to participate in the marshall plan it was forced by the kremlin to back out in 1947 stalin summoned gottwald to moscow upon his return to prague the case demonstrated a significant radicalization of its tactics on the 20th of february 1948 the twelve non-communist ministers resigned in part to induce benis to call for early elections however bennis refused to accept the cabinet resignations and did not call elections in the meantime the case marshaled its forces for the czechoslovak coup d'etat of 1948.
the communist-controlled ministry of the interior deployed police regiments to sensitive areas and equipped a workers militia on the 25th of february benis perhaps fearing soviet intervention capitulated he accepted the resignations of the dissident ministers and received a new cabinet list from gottwald thus completing the communist takeover under the cover of superficial legality on the 10th of march 1948 the moderate foreign minister of the government jan masarik was found dead in suspicious circumstances that have still not been definitively proved to constitute either suicide or political assassination the czechoslovak socialist republic in february 1948 the communists took power in the 1948 czechoslovak coup d'etat and edvard bennis inaugurated a new cabinet led by clement gottwald czechoslovakia was declared a people's democracy a preliminary step toward socialism and ultimately communism bureaucratic centralism under the direction of case leadership was introduced dissident elements were purged from all levels of society including the roman catholic church the ideological principles of marxism leninism and socialist realism pervaded cultural and intellectual life the economy was committed to comprehensive central planning and the abolition of private ownership of capital czechoslovakia became a satellite state of the soviet union it was a founding member of the council for mutual economic assistance in 1949 and of the warsaw pact in 1955. the attainment of soviet-style command socialism became the government's avowed policy slovak autonomy was constrained the communist party of slovakia was reunited with the case but retained its own identity following the soviet example czechoslovakia began emphasizing the rapid development of heavy industry although czechoslovakia's industrial growth of 170 between 1948 and 1957 was impressive it was far exceeded by that of japan and the federal republic of germany and more than equaled by austria and greece bennis refused to sign the communist constitution of 1948 and resigned from the presidency he was succeeded by clement gottwald gottwald died in march 1953. he was succeeded by antonin zapataki as president and by antonin novotny as head of the case in june 1953 thousands of workers in polzen went on strike to demonstrate against a currency reform that was considered a move to solidify soviet socialism in czechoslovakia the demonstrations ended without significant bloodshed disappointing american director of central intelligence alan dulles who wished for a pretext to help the czechoslovak people resist the soviets for more than a decade thereafter the czechoslovak communist political structure was characterized by the orthodoxy of the leadership of party chief antonin novotny who became president in 1957 when zipotiki died in the 1950s the stalinists accused their opponents of conspiracy against the people's democratic order and high treason in order to oust them from positions of power in all the communist party tried 14 of its former leaders in november 1952 and sentenced 11 to death large-scale arrests of communists and socialists with an international background i.e those with a wartime connection with the west veterans of the spanish civil war jews and slovak bourgeois nationalists were followed by show trials the outcome of these trials serving the communist propaganda was often known in advance and the penalties were extremely heavy such as in the case of melata horikova who was sentenced to death together with jan butchell xavis calandra and aldrich pekel the 1960 constitution declared the victory of socialism and proclaimed the czechoslovak socialist republic stalinization had a late start in czechoslovakia in the early 1960s the czechoslovak economy became severely stagnant the industrial growth rate was the lowest in eastern europe as a result in 1965 the party approved the new economic model introducing free market elements into the economy the case theses of december 1965 presented the party response to the call for political reform democratic centralism was redefined placing a stronger emphasis on democracy the leading role of the case was reaffirmed but limited slovaks pressed for federalization on the 5th of january 1968 the case central committee elected alexander dubchek a slovak reformer to replace novotny as first secretary of the case on the 22nd of march 1968 novotny resigned from the presidency and was succeeded by general ludviksvaboda the prague spring dub check carried the reform movement a step further in the direction of liberalism after novotny's fall censorship was lifted the press radio and television were mobilized for reformist propaganda purposes the movement to democratize socialism in czechoslovakia formerly confined largely to the party intelligentsia acquired a new popular dynamism in the spring of 1968. radical elements found expression anti-soviet polemics appeared in the press the social democrats began to form a separate party and new unaffiliated political clubs were created party conservatives urged the implementation of repressive measures but dubchek counseled moderation and re-emphasized case leadership in addition the dub check leadership called for politico military changes in the soviet-dominated warsaw pact and council for mutual economic assistance the leadership affirmed its loyalty to socialism and the warsaw pact but also expressed the desire to improve relations with all countries of the world regardless of their social systems a program adopted in april 1968 set guidelines for a modern humanistic socialist democracy that would guarantee among other things freedom of religion press assembly speech and travel a program that in dub check's words would give socialism a human face after 20 years of little public participation the population gradually started to take interest in the government and dubchek became a truly popular national figure the internal reforms and foreign policy statements of the dub check leadership created great concern among some other warsaw-pact governments as a result the troops of the warsaw pact countries mounted a soviet invasion of czechoslovakia during the night of the 20th to the 21st of august 1968. two-thirds of the case central committee opposed the soviet intervention popular opposition was expressed in numerous spontaneous acts of nonviolent resistance in prague and other cities throughout the republic czechs and slovaks greeted warsaw pact soldiers with arguments and reproaches the czechoslovak government declared that the warsaw pact troops had not been invited into the country and that their invasion was a violation of socialist principles international law and the u.n
charter dubchek who had been arrested on the night of the 20th of august was taken to moscow for negotiations the outcome was the bresneb doctrine of limited sovereignty which provided for the strengthening of the case strict party control of the media and the suppression of the czechoslovak social democratic party the principal czechoslovak reformers were forcibly and secretly taken to the soviet union where they signed a treaty that provided for the temporary stationing of an unspecified number of soviet troops in czechoslovakia dubchek was removed as party first secretary on the 17th of april 1969 and replaced by another slovak gustav husic later dubchek and many of his allies within the party were stripped of their party positions in a purge that lasted until 1971 and reduced party membership by almost one-third on the 19th of january 1969 the student jan palach set himself on fire in prague's wencesla square to protest the invasion of czechoslovakia by the soviet union his death shocked many observers throughout the world aftermath the slovak part of czechoslovakia made major gains in industrial production in the 1960s and 1970s by the 1970s its industrial production was near parity with that of the czech lands slovakia's portion of per capita national income rose from slightly more than 60 of that of bohemia and moravia in 1948 to nearly 80 in 1968 and slovak per capita earning power equaled that of the czechs in 1971. the pace of slovak economic growth has continued to exceed that of czech growth to the present day dubcek remained in office only until april 1969. gustav husic was named first secretary a program of normalization the restoration of continuity with the prereform period was initiated normalization entailed thoroughgoing political repression and the return to ideological conformity a new purge cleansed the czechoslovak leadership of all reformist elements anti-soviet demonstrations in august 1969 ushered in a period of harsh repression the 1970s and 1980s became known as the period of normalization in which the apologists for the 1968 soviet invasion prevented as best they could any opposition to their conservative regime political social and economic life stagnated the population cowed by the normalization was quiet the only point required during the prague spring that was achieved was the federalization of the country which however was more or less only formal under the normalization the newly created federal assembly which replaced the national assembly was to work in close cooperation with the czech national council and the slovak national council in 1975 gustav husic added the position of president to his post as party chief the husk regime required conformity and obedience in all aspects of life husk also tried to obtain acquiescence to his rule by providing an improved standard of living he returned czechoslovakia to an orthodox command economy with a heavy emphasis on central planning and continued to extend industrialization for a while the policy seemed successful the 1980s however were more or less a period of economic stagnation another feature of hoosick's rule was a continued dependence on the soviet union in the 1980s approximately 50 of czechoslovakia's foreign trade was with the soviet union and almost 80 percent was with communist countries through the 1970s and 1980s the regime was challenged by individuals and organized groups aspiring to independent thinking and activity the first organized opposition emerged under the umbrella of charter 77. on the 6th of january 1977 a manifesto called charter 77 appeared in west german newspapers the original manifesto reportedly was signed by 243 persons among them were artists former public officials and other prominent figures the charter had over 800 signatures by the end of 1977 including workers and youth it criticized the government for failing to implement human rights provisions of documents it had signed including the state's own constitution international covenants on political civil economic social and cultural rights and the final act of the conference for security and cooperation in europe although not organized in any real sense the signatories of charter 77 constituted a citizens initiative aimed at inducing the czechoslovak government to observe formal obligations to respect the human rights of its citizens signatories were arrested and interrogated dismissal from employment often followed because religion offered possibilities for thought and activities independent of the state it too was severely restricted and controlled clergymen were required to be licensed unlike in poland descent and independent activity were limited in czechoslovakia to a fairly small segment of the population many czechs and slovaks emigrated to the west the final years of the communist era although in march 1987 husick nominally committed czechoslovakia to follow the programme of mikhail gorbachev's perestroika it did not happen much in reality on the 17th of december 1987 husick who was one month away from his 75th birthday had resigned as head of the case he retained however his post of president of czechoslovakia and his full membership on the presidium of the case milos jakes who replaced hoosick as first secretary of the case did not change anything the slow pace of the czechoslovak reform movement was an irritant to the soviet leadership the first anti-communist demonstration took place on the 25th of march 1988 in bratislava it was an unauthorized peaceful gathering of some 2000 roman catholics demonstrations also occurred on the 21st of august 1988 in prague on the 28th of october 1988 in prague bratislava and some other towns in january 1989 on the 21st of august 1989 and on the 28th of october 1989 velvet revolution the anti-communist revolution started on the 16th of november 1989 in bratislava with a demonstration of slovak university students for democracy and continued with the well-known similar demonstration of czech students in prague on the 17th of november on the 17th of november 1989 the communist police violently broke up a peaceful pro-democracy demonstration brutally beating many student participants in the following days charter 77 and other groups united to become the civic forum an umbrella group championing bureaucratic reform and civil liberties its leader was the dissident playwright vatsav havel intentionally eschewing the label party a word given a negative connotation during the previous regime civic forum quickly gained the support of millions of checks as did its slovak counterpart public against violence faced with an overwhelming popular repudiation the communist party all but collapsed its leaders hoosic and party chief milos jakes resigned in december 1989 and hovel was elected president of czechoslovakia on the 29th of december the astonishing quickness of these events was in part due to the in popularity of the communist regime and changes in the policies of its soviet guarantor as well as to the rapid effective organization of these public initiatives into a viable opposition democratic czechoslovakia a coalition government in which the communist party had a minority of ministerial positions was formed in december 1989. the first free elections in czechoslovakia since 1946 took place in june 1990 without incident and with more than 95 percent of the population voting as anticipated civic forum and public against violence won landslide victories in their respective republics and gained a comfortable majority in the federal parliament the parliament undertook substantial steps toward securing the democratic evolution of czechoslovakia it successfully moved toward fair local elections in november 1990 ensuring fundamental change at the county and town level civic forum found however that although it had successfully completed its primary objective the overthrow of the communist regime it was ineffectual as a governing party the demise of civic forum was viewed by most as necessary and inevitable by the end of 1990 unofficial parliamentary clubs had evolved with distinct political agendas most influential was the civic democratic party headed by votslov klaus other notable parties that came into being after the split were the czech social democratic party civic movement and civic democratic alliance dissolution of czechoslovakia by 1992 slovak calls for greater autonomy effectively blocked the daily functioning of the federal government in the election of june 1992 klaus's civic democratic party won handily in the czech lands on a platform of economic reform vladimir messiar's movement for a democratic slovakia emerged as the leading party in slovakia basing its appeal on fairness to slovak demands for autonomy federalists like havel were unable to contain the trend toward the split in july 1992 president havel resigned in the latter half of 1992 klaus and messiah hammered out an agreement that the two republics would go their separate ways by the end of the year members of czechoslovakia's parliament divided along national lines barely cooperated enough to pass the law officially separating the two nations in late 1992. on the 1st of january 1993 the czech republic and slovakia were simultaneously and peacefully established as independent states relationships between the two states despite occasional disputes about the division of federal property and the governing of the border have been peaceful both states attained immediate recognition from the u.s and their
european neighbors economic history at the time of the communist takeover czechoslovakia was devastated by world war ii almost one million people out of a pre-war population of 15 million had been killed an additional 3 million germans were expelled in 1946. in 1948 the government began to stress heavy industry over agricultural and consumer goods and services many basic industries and foreign trade as well as domestic wholesale trade had been nationalized before the communists to power nationalization of most of the retail trade was completed in 1950-1951 heavy industry received major economic support during the 1950s although the labor force was traditionally skilled and efficient inadequate incentives for labor and management contributed to high labor turnover low productivity and poor product quality economic failures reached a critical stage in the 1960s after which various reform measures were sought with no satisfactory results hope for wide-ranging economic reform came with alexander dubchek's rise in january 1968. despite renewed efforts however czechoslovakia could not come to grips with inflationary forces much less begin the immense task of correcting the economy's basic problems the economy saw growth during the 1970s but then stagnated between 1978 and 1982. attempts at revitalizing it in the 1980s with management and worker incentive programs were largely unsuccessful the economy grew after 1982 achieving an annual average output growth of more than 3 percent between 1983 and 1985. imports from the west were curtailed exports boosted and hard currency debt reduced substantially new investment was made in the electronic chemical and pharmaceutical sectors which were industry leaders in eastern europe in the mid-1980s