Eventually, the extreme cost of living and massive government deficits took a toll on the nation's economic growth, and the Socialist state was replaced by a mixed economy.

This led to a reduction in the role of the public sector, lowered taxes, and the privatization of businesses.

Type of Economy Transition

Past Economy

-Highly industrial country with many social programs, including old-age benefits, disability, education, etc.

-Economy was funded by high taxes

-Was exemplary of European socialism

-Other social welfare programs were also included in economic plan

-Highest tax bracket was at 80%