The problem of monetary and fiscal convergence among European Union (EU) member countries is receiving much due attention. Such emphasis on the deepening aspects of European integration must not overshadow the pressing problem of enlargement to the East. Indeed, many Central and East European Countries (CEECs) have come a long way in the process of transition, have acquired the status of Associate country, and have formally applied for membership in the European Union.

Thus, in the perspective of CEECs accession to the EU, it is important to identify modes, patterns and strength of the process of integration between EU and CEECs as it has been developing since the beginning of the transition in the associate countries. Integration has proceeded both through policies, i.e. the Association Agreements, and through market channels, i.e. trade, foreign direct investment, and international delocalisation of production.

The papers collected in this book present evidence on each of these channels through which integration is taking place. Accordingly, the book is organized in four parts: policies evaluation, international trade, foreign direct investment, and international delocalisation of production. Results show that the process of integration between the EU and the CEECs is proceeding at a pace much faster than it is often perceived; that the modes of integration are both traditional (trade) and new (delocalisation of production); that competitiveness differentials affect different industries in sometimes sharply different ways; that EU member countries are affected in very different degrees by the process as well as by its modes.

Salvatore Baldone and Fabio Sdogati are respectively Professor and Associate Professor of Economics, Dipartimento di Economia e Produzione, Politecnico di Milano.