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been
staunchly
opposed
to
political
and
manufacturing and service sectors together with
geographical contiguity with Italy and Austria
provided the highest living standards in Central
and Eastern Europe. Small - with a population
of less than two million yet blessed with a diver-
sity of resources - the mountains, lakes and spas
of this former Habsburg province had been pop-
ular with the Austrian upper classes. In the early
1990s, Slovenia's role in the break up of Yugo-
slavia was pivotal. Encouraged particularly by
the German government, the Slovenes were the
first to declare independence from Belgrade. The
subsequent conflict with the largely Serb federal
Yugoslav army was over in less than a week, and
Ljubljana's success clearly acted as a role model
for other Yugoslav republics whose exit strategies
would prove to be far bloodier.
At the other end of the development spec-
trum, Bulgaria and Romania had been the least
developed European CMEA members (Albania
having effectively left the Soviet bloc in 1961
(and formally in 1967), ostensibly taking the
side of China over the ideological differences
which split world communism in the early
1960s). There had been attempts to build strong
heavy industrial sectors in these two south-
eastern European states, and the austerity that
characterized the later years of Ceausescu's rule
in Romania was particularly brutal and corrupt-
ing. At the end of the state-socialist period, both
countries still had distinctively rural characters.
They were characterized by low living stan-
dards, poor infrastructures, substantial environ-
mental problems, highly distorted economic
structures and political cronyism that persisted
as post-communist corruption; many former state
and party functionaries made the apparently
effortless transition to becoming 'good capitalists'.
The Baltic countries presented special chal-
lenges, having been forcibly incorporated into
the Soviet Union during the Second World War
to become something of a Russian milch cow
within the USSR. But historically, there have
been strong economic and cultural ties with
Scandinavia, Poland and Germany. Despite
Soviet pressures for cultural and economic
assimilation, the Baltic republics were able to
capitalize on their traditional advantages: favour-
able locations on the Baltic Sea, higher educa-
tional levels, developed infrastructures, and a
degree of cultural autonomy. These helped to
maintain the highest living standards and the
economic reform.
By contrast, since 1968, the Hungarian
party and government had implemented rela-
tively liberal economic policies (while maintain-
ing tight political control), and had one of the
strongest private sectors in the region. The
country's western border with Austria was one
of the first physical elements of the Iron Curtain
to be dismantled in 1989.
In Poland, the rise of the Solidarity free
trade union movement, originating in the Lenin
shipyard in Gdansk in 1980, was soon accom-
panied by both domestic and external political
and economic crises that culminated in 1981
with a military 'coup', ostensibly to forestall a
Soviet-led Warsaw Pact military intervention
similar to that which had befallen Czechoslovakia
in 1968 following the liberal political as well as
economic reforms of Dubcek's 'Prague Spring'.
Yet less than 8 years later, in the early summer
of 1989, Poland held the Soviet bloc's first rela-
tively free multi-party elections that heralded
the beginning of the dismantling of the Soviet
empire. In the 1980s Poland had experienced a
sharp decline in GDP and shortages of con-
sumer goods. However, relatively strong manu-
facturing and service sectors, coupled to
a steady stream of remittances from the large
Polish diaspora, helped to maintain living stan-
dards at levels similar to those in Hungary and
Slovakia. The uniquely important role of the
Roman Catholic church - it had helped to
reverse the collectivization of agriculture in
the 1950s - became critical with the heavily
symbolic election of a Polish Pope.
At the end of the 1980s, Slovenia was the
most developed republic in the former Yugoslav
federation (which had been expelled from the
Soviet bloc in 1948 for excessive 'nationalism').
Slovenia had strong historical ties to Austria
and northern Italy, and large numbers of
Gastarbeiter
working within the EU (labour
migration from Yugoslavia had been permitted
since 1965) sent back valuable remittances.
Indeed, for Yugoslavia as a whole, such remit-
tances were of equal value to tourism as the
most important source of foreign exchange. In
both cases, Croatia, with its long Adriatic coast-
line and German-speaking Habsburg legacy, was
the dominant generator of such income. None
the less, Slovenia's relatively well-developed
