Background
After 45 years of communist rule, Poland's economy was completely unsuited for integration into a capitalist world market. The inflation rate had reached 639.6% and was constantly rising. The majority of state-owned monopolies and holdings were largely ineffective and completely obsolete in terms of technology. Although there was practically no unemployment in Poland, wages were low and the shortage economy led to lack of even the most basic foodstuffs in the shops. After the failure of the Communist government in the elections of June 4, 1989, it became clear that the previous regime was no longer legitimate.
The unofficial talks at Magdalenka and then the Polish Round Table talks of 1989 allowed for a peaceful transition of power to the democratically-elected government. Initially it was agreed that the government would be formed by Tadeusz Mazowiecki and the opposition, while the seat of the president of Poland would be given to former Polish United Workers' Party leader Gen. Wojciech Jaruzelski.
Read more about this topic: Balcerowicz Plan
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