New Varieties of Capitalism
Chapter 7: Central and Eastern Europe: from transition towards new risk
The Central and Eastern European (CEE) economies can be classified as a 'transition model' with some common challenges but with noticeably differences in the culture and development of their economies and welfare states. It is therefore justified to speak of an emerging new Varieties of Capitalism (VoC) in this region, which warrants further detailed investigation over the coming years. The countries of the CEE-8 (2004) and CEE-2 (2010) accession group share the common and ongoing challenge of shedding the legacy of centralised state planning of their economies under Communism, which lasted for more than four decades after the end of the Second World War. The European Union (EU) was instrumental in setting the CEE countries on the path towards liberal market economies by promoting the principles of the Washington Consensus (Cernat 2006: 29). As a result, the emerging policy consensus in the CEE region is generally favourable towards economic liberalisation. In practice this manifests itself in following the example of dependent growth for which Ireland became the role model amongst the EU-15, as it is outlined in Chapter 6. Like in the Irish case, foreign direct investment (FDI) hence became a crucial factor in the development of economies in CEE. Germany, which has been a longstanding political and economic partner for all CEE member states in the EU, plays a crucial role in this respect.
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