Modern European Economics

German Reunification- On October 1989 the East German government was in crisis.President Honecker resigned, and his successor, Egon Krenz, promised to give Germany a reform. November 9, it was decided that the Berlin wall no longer served as a function, and east and west Germans attacked the wall tearing it down, as a result, they formed a union, stabilizing social and economic structures.The financial systems merged, and economic problems out grew from this change.The cost of providing goods and services between the east and the west caused strain, and money loss, which would result in economic recession.This caused cutting of social services, increased taxes, and reducing government subsides.A positive economic result from unification was theincreased competitiveness of German economy, brought by the increasing market of consumer products.
Collapse of the Soviet Union- The USSR collapsed in 1991 causing it to become an independent nation.The progressing problems of the new government caused an exceptional time of economic crisis that effected Russia and putting it in a much worse state in which it had been in an economic decline since the 1970s .It suffered foreign reserves which impaired the countries ability to import goods.
Shock therapy program- Prime Minister Yeltsin's economic reform for Russia which included freeing prices, and removing legal barriers to private trade and manufacture.This government form was hard to implement in Russia, even though it freed most prices, it still maintained controls on the prices of certain basic consumer goods and key economic inputs.
Maastricht Treaty- Agreement that put the European Union as successor to the European Community.It introduced a central banking system, and common currency.It also worked toward establishing a common foreign and security policy.The treaty was signed in 1991, it was ratified and later took effect

Leave a Reply

Your email address will not be published. Required fields are marked *