Reunifying Europe in an Emerging World Economy: Economic Heterogeneity, New Industrial Options, and Political Choices

Abstract

This article examines the industrial reintegration of central and eastern Europe into the broader European economy in the context of the emerging world economy. Since the Cold War, Europe’s economic heterogeneity has sharply increased, making it comparable to Asia. And Europe as a whole must adapt to a global economy of three regional centres and industrial strategies implemented through International Production Networks (IPNs). The article asks whether policies favoring IPNs that link east and west can reconcile eastern industrial development with western prosperity and employment. Thus the eastward enlargement of the European Union, which has been driven primarily by security concerns, can also improve the region’s competitiveness in global markets.