THE PROSPECTS FOR INTEGRATING CENTRAL AND EASTERN-EUROPEAN COUNTRIES IN THE EUROPEAN-UNION - AN ANALYSIS BASED ON THE SPECIALIZATION ACQUIRED BY THESE ECONOMIES IN TRANSITION

Economically, the countries of central and eastern Europe are not read y to join the European Union at the existing or foreseeable level of i ntegration. The complete liberalization of trade through a free-trade zone or customs union seems to be a somewhat easier objective to reach . The Single Market's rules will not be applicable without temporary d ispensations for new members or else following a necessary adjustment and convergence of economic institutions. It is not possible to imagin e Eastern European countries participating in the European Monetary Un ion. Integrating post-communist economies in the EU will be gradual an d differentiated. What is here intended is to link the specialization acquired by these economies in transition to the desirable degree of i ntegration in a ''custom-made'' European Union. Given the objective of integration, specialization is a prerequisite. On the basis of the st ructure of observed transactions, the gains of integration can be pred icted by distinguishing the effects of the creation or diversion of tr ade resulting from integration.