CZECH REPUBLIC

Following World War I, the closely related Czechs and Slovaks of the former Austro-Hungarian Empire merged to form Czechoslovakia. Czechoslovakia was invaded and occupied by the Nazi Germany during World War II, and after the war it fell within the Soviet sphere of influence. The country had been under communist rule since the late 1940s. The "Prague Spring" of 1968 for liberal reforms was crushed by Soviet tanks, and 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 "Velvet Revolution." In January 1993, Czechoslovakia was broken up as the Czech Republic and the Slovak Republic were simultaneously and peacefully founded. The Czech Republic joined NATO in 1999 and the European Union in 2004. Among the transition countries in Central and Eastern Europe, the Czech Republic is one of the most stable and prosperous and has one of the most developed and industrialized economies. Its strategic location in Europe and skilled workforce has attracted strong inflows of foreign direct investment, which have been an important contributor to its economic strength.