Social Policy in Central and Eastern Europe (CEE) in 1990s

One of the major accomplishments of the socialist systems of Central and Eastern Europe (CEE) was the relatively equal distribution of income they attained. The social policy was characterized by "cradle-to-grave" state paternalism. The transition to market economy is virtually certain to lead to higher unemployment and somewhat greater income inequality. There were four interrelated social policy problems during the transformation of (CEE) : a. the employment problem for citizens to find secure and durable employment and income; b. the business problem, where firms can no longer rely on soft budget constraints and thus must abundant their direct social welfare functions; c. the budget problem of unburdening the state from price subsidies, which means rising consumer prices and declining real incomes and; d. the labour market problem resulting from privatization and the need for the developing new and specialized social policy institutions This required the reform of social policy: a redefinition of the social safety net, in essence an "unbundling" of the economic and social roles previously assigned to enterprises. This reforms had to extend to comprehensive transformation of the large distribution systems (pension, health, education, housing, social benefits), reduction of social benefits according to the need and partially providing services in the market economy. There was consensus in CEE that the reform due to their inner shortcomings and to condition of their economy is unavoidable and indispensable. But the success of the reform needed proper concept of it and addition to this the success of it depended on starting up of the sustainable economic growth of their economy. The concept of reforms is rather well developed and commonly accepted in every countries of CEE, but the implementation of it is in very different stage. Therefore first we outline the concept of the reforms and after that we present what has welfare, social policy reform achieved.