section_path: Aftermath/Economic reforms
section_name: Economic reforms
paragraph_text: Economic reforms
  
  The FSN had to choose between the two economic models that political elites claimed were available to post-Communist Eastern European countries: shock therapy or gradual reforms. The FSN chose the latter, slower reforms, because it would have not been possible to convince the people who were already "exhausted" after Ceaușescu's austerity to undergo further sacrifices. Nevertheless, neoliberal reforms were implemented, although not all at once: by the end of 1990, prices were liberalised and a free currency exchange rate was implemented, devaluing the leu by 60%. The land of the state-owned collective farms was distributed to private owners and a list of 708 large state-owned enterprises to be privatised was devised.
  
  In 1991 Romania signed an agreement with the IMF and began the privatisation of state-owned enterprises, with the first privatisation law being passed in 1991. In 1992, the Stolojan government began an austerity plan, limiting wages and further liberalising prices. The economic situation deteriorated and inflation as well as unemployment increased substantially. The austerity measures, which by 1995 included a decrease in social spending, led to an increase in poverty. The neoliberal reforms were accelerated after the Democratic Convention won the 1996 elections, the government using its prerogatives to pass a package of laws, removing subsidies, passing reforms on unemployment benefits and greatly increasing the number of privatised companies.