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Eastern Europe breaks away

Two developments dominated the decade that followed: the increasingly apparent crumbling of the Soviet Union's economic and political structures, and the patchwork attempts at reforms to reverse that process. Kenneth S. Deffeyes argued in Beyond Oil that the Reagan administration encouraged Saudi Arabia to lower the price of oil to the point where the Soviets could not make a profit selling their oil, and resulted in the depletion of the country's hard currency reserves.

Brezhnev's next two successors, transitional figures with deep roots in his tradition, did not last long. Yuri Andropov was 68 years old and Konstantin Chernenko 72 when they assumed power; both died in less than two years. In an attempt to avoid a third short-lived leader, in 1985, the Soviets turned to the next generation and selected Mikhail Gorbachev. He made significant changes in the economy and party leadership, called perestroika. His policy of glasnost freed public access to information after decades of heavy government censorship. Gorbachev also moved to end the Cold War. In 1988, the USSR abandoned its war in Afghanistan and began to withdraw its forces. In the following year, Gorbachev refused to interfere in the internal affairs of the Soviet satellite states, which paved the way for the Revolutions of 1989. In particular, the standstill of the Soviet Union at the Pan-European Picnic in August 1989 then set a peaceful chain reaction in motion, at the end of which the Eastern Bloc collapsed. With the tearing down of the Berlin Wall and with East and West Germany pursuing re-unification, the Iron Curtain between the West and Soviet-occupied regions came down.

By 1989, the Soviet alliance system was on the brink of collapse, and, deprived of Soviet military support, the communist leaders of the Warsaw Pact states were losing power. Grassroots organizations, such as Poland's Solidarity movement, rapidly gained ground with strong popular bases.

The Pan-European Picnic in August 1989 in Hungary finally started a peaceful movement that the rulers in the Eastern Bloc could not stop. It was the largest movement of refugees from East Germany since the Berlin Wall was built in 1961 and ultimately brought about the fall of the Iron Curtain. The patrons of the picnic, Otto von Habsburg and the Hungarian Minister of State Imre Pozsgay, saw the planned event as an opportunity to test Mikhail Gorbachev's reaction. The Austrian branch of the Paneuropean Union, which was then headed by Karl von Habsburg, distributed thousands of brochures inviting the GDR holidaymakers in Hungary to a picnic near the border at Sopron. But with the mass exodus at the Pan-European Picnic the subsequent hesitant behavior of the ruling Socialist Unity Party of East Germany and the non-interference of the Soviet Union broke the dams. Now tens of thousands of media-informed East Germans made their way to Hungary, which was no longer willing to keep its borders completely closed or to oblige its border troops to use armed force. On the one hand, this caused disagreement among the Eastern European states and, on the other hand, it was clear to the Eastern European population that the governments no longer had absolute power.

In 1989, the communist governments in Poland and Hungary became the first to negotiate the organization of competitive elections. In Czechoslovakia and East Germany, mass protests unseated entrenched communist leaders. The communist regimes in Bulgaria and Romania also crumbled, in the latter case as the result of a violent uprising. Attitudes had changed enough that US Secretary of State James Baker suggested that the American government would not be opposed to Soviet intervention in Romania, on behalf of the opposition, to prevent bloodshed.

The tidal wave of change culminated with the fall of the Berlin Wall in November 1989, which symbolized the collapse of European communist governments and graphically ended the Iron Curtain divide of Europe. The 1989 revolutionary wave swept across Central and Eastern Europe and peacefully overthrew all of the Soviet-style Marxist–Leninist states: East Germany, Poland, Hungary, Czechoslovakia and Bulgaria; Romania was the only Eastern-bloc country to topple its communist regime violently and execute its head of state.