Since the end of the 1970s and the beginning of the 1980s, the crisis of the "Hungarian model" has gone very deep. The government applied an austerity cure that cut net investment almost by half from 1978 to 1982, and the living standard of the population dropped dramatically. The country moved closer and closer to insolvency.
In 1982, Hungary was the second Comecon country to join the IMF. In joining, it adopted one of its notorious adjustment programs, which was designed to reduce demand throughout the economy by restric- 15 tive tax, wage, and interest policy, and by July 25, 1988 • #146 International Viewpoint
«There is no freedom without Solidarnosc
HUNGARY • POLAND further compressing state investment. Parallel to this, there was a "third wave of reforms, " in which a series of measures were taken — price reform was instituted to let world prices operate also in the domestic economy; private initiative and small enterprises were to be promoted, and their autonomy of decision-making widened. The banking system was to be restructured. All