ABSTRACT
The former socialist Central and East European countries are all undergoing fundamental economic and political changes. Socialist regimes of these countries, based politically on the leading role of the Communist Party, economically on the state ownership as a means of production, and on a centrally planned allocation of resources, have collapsed. The political changes in late 1989 and throughout 1990, have created the conditions for the transition of the centrally planned economy to the market economy throughout the entire Central and East European region. The resulting complicated and structured process of economic reform is proceeding in three main spheres; institutional, monetary, and real. The implementation of this transition is determined by a series of steps carried out by the state. The system reform generally involves:
1. denationalisation (de-etatisation) and privatisation of state ownership;
2. price liberalisation; 3. foreign trade liberalisation and foreign investment; 4. tax reform; 5. reform of finance and currency relations (inclusive of internal and,
later, full currency convertibility).
