The desire to attract inflows of Western cash is something that unites all the countries of the former Soviet Bloc.
Foreign money is needed for both investment and to support local currencies.
Yet influxes of capital from abroad bring with them their own problems, frequently eroding macroeconomic stabilisation and boosting inflation. The different experiences of Europe's leading transition economies when encountering these challenges has hinged on savings levels and budgetary policy. Since mid 1994 Poland and the Czech Republic have experienced a massive inflow of foreign money. But while the Czech Republic managed to hold inflation at a level of around 10 per cent for the 12 months to June 1995, Polish prices rose during the same period by 30 per cent. In Hungary, meanwhile, foreign money has been flowing out the country during this period, yet the inflation rate rose significantly in the first half of 1995.