Central and Eastern Europe
After World War II, Czechoslovakia fell within the Soviet sphere of influence. In 1968, an invasion by Warsaw Pact troops ended the efforts of the country's leaders to liberalize party rule and create "socialism with a human face." Anti-Soviet demonstrations the following year ushered in a period of harsh repression. With the collapse of Soviet authority in 1989, Czechoslovakia regained its freedom through a peaceful "Velvet Revolution." On 1 January 1993, the country underwent a "velvet divorce" into its two national components, the Czech Republic and Slovakia. Now a member of NATO, the Czech Republic has moved toward integration in world markets, a development that poses both opportunities and risks.
Economy - overview: Political and financial crises in 1997 shattered the Czech Republic's image as one of the most stable and prosperous of post-Communist states. Delays in enterprise restructuring and failure to develop a well-functioning capital market played major roles in Czech economic troubles, which culminated in a currency crisis in May. The currency was forced out of its fluctuation band as investors worried that the current account deficit, which reached nearly 8% of GDP in 1996, would become unsustainable. After expending $3 billion in vain to support the currency, the central bank let it float. The growing current account imbalance reflected a surge in domestic demand and poor export performance, as wage increases outpaced productivity. The government was forced to introduce two austerity packages later in the spring which cut government spending by 2.5% of GDP. Growth dropped to 0.3% in 1997, -2.3% in 1998, and -0.5% in 1999. The basic transition problem continues to be too much direct and indirect government influence on the privatized economy. The government established a restructuring agency in 1999 and launched a revitalization program - to spur the sale of firms to foreign companies. Key priorities include accelerating legislative convergence with EU norms, restructuring enterprises, and privatizing banks and utilities. The economy, fueled by increased export growth and investment, is expected to recover in 2000.
CSA Czech Airlines: http://www.csa.cz | E-mail: email@example.com
Czechhotels Promotion | E-mail: firstname.lastname@example.org
M÷venpick Hotel | E-mail: email@example.com
Hotel AXA | E-mail: AXApraha@mbox.vol.cz
Hotel Pariz | E-mail: firstname.lastname@example.org
CSA Airtours: http://www.airtours.cz/ | E-mail: email@example.com
ASIANA Global Travel Service | E-mail: firstname.lastname@example.org
MARTIN TOUR PRAHA | E-mail: email@example.com
Tourist Office of the Czech Republic -- USA office
Czech Service Centre
1511 K Street NW, Suite 1030
Washington DC 20005
Tel: 800-Y-PRAGUE (800-977-2483) toll-free in USA and Canada