Money Matters, an IMF Exhibit -- The Importance of Global Cooperation

Debt and Transition (1981-1989)

Part 7 of 7


Conflict &
(1871 - 1944)

Destruction &
(1945 - 1958)
The System
In Crisis

(1959 - 1971)
the System
(1972 - 1981)
Debt &
(1981 - 1989)
Globalization and Integration
(1989 - 1999)

Thaw in the East

<--Previous Globalization and Integration

With remarkable speed and surprisingly little violence, the Iron Curtain fell in 1989, radically changing the political and economic conditions that had been in place in Europe since World War II.

For years, Communist countries had been plagued by stagnant economies, low productivity, inefficient industry, and constant shortages of consumer goods. One by one, the Communist regimes of Eastern Europe collapsed in 1989. Was this the end of the centrally planned economies?


1989 Year of Anti-Communist Revolutions

In April, Poland’s Communist government legalized the Solidarity party. After elections in June, the Polish Communist party became the first to allow itself to be turned out of office. Nobel Prize winner and Solidarity leader Lech Walesa later became the first freely elected president.

In November, massive demonstrations by almost a million Czech citizens culminated in democratic reforms and the resignation of the country's Communist leaders. Dissident liberal playwright Václav Havel became president after free elections were held at the end of December.

The first real breach of the Iron Curtain occurred in May, when Hungary dismantled barriers on its border with Austria. In October, the Hungarian Communist party dissolved, after instituting democratic and economic reforms.


Transition cartoon

Breach of iron curtain



On November 9th, East Germany opened its borders and dismantled the Berlin Wall. Over the next month, 133,000 people moved west. To stem the flow, West Germany issued a plan on November 28 for Germany’s reunification. After economic union took place in July 1990, East Germany ceased to exist.

On November 10th, after over 35 years in power, Todor Zhivkov was forced to resign his positions as Bulgaria’s head of state and Communist party leader. Shortly afterwards, protesters obtained democratic reforms, including free elections and the repeal of the Communist party’s monopoly of power.
Countries Don't
Go Bankrupt
Time Bomb Explodes Solving the Problem Attempted Rescue
Regional Economic Integration The Power of Private Capital Thaw in the East

<--Previous Globalization and Integration