According to a document published online by the U.S. Central Intelligence Agency, After World War II, Czechoslovakia fell within the Soviet sphere of influence. In 1968, an invasion by Warsaw Pact troops ended the efforts of the country's leaders to liberalize Communist party rule. Anti-Soviet demonstrations the following year ushered in a period of harsh repression. With the collapse of Soviet authority in 1989, Czechoslovakia regained its freedom through a peaceful revolution. On January 1, 1993, the country split into the Czech Republic and Slovakia. The Czech Republic joined NATO in 1999 and the European Union in 2004.
According to the C.I.A., the Czech Republic is one of the most stable and prosperous of the post-Communist states. It has accelerated the clean up of the effects of decades of communism by maintaining an open investment climate which has accelerated its transition from a centrally planned economy to a well functioning market economy. Also, the Czech Republic recognized the benefits of world trade. It applied for and was granted membership into the European Union. As an EU member, it has the advantage of being geographically located in the center of Europe facilitating import and export of goods. It has a relatively low cost structure in its manufacturing base, and a well-qualified labor force. Liberal regulations governing foreign investment have made the Czech Republic is an attractive destination for foreign investment.
To further accelerate its transition to a market economy prior to its full admission to the EU in 2004, the Czech government harmonized its laws and regulations with those of the European Union. The Czech government also plans to adopt the pan-European currency, the Euro, by 2012. As a result of these changes, the export-driven Czech economy grew by over 6% annually from 2005 to 2007, and strong growth continued throughout the first three quarters of 2008. Despite the glob...