THE EUROPEAN-COMMUNITY AND EAST-CENTRAL-EUROPE

East-Central Europe (Hungary, Czecho-Slovakia and Poland) has been undergoing an extraordinary transformation of its political and economic structures. The ultimate objective of the newly resurrected and still fragile democracies is re-integration with global economy and Western Europe in all spheres of political, economic and social life. However, the success of this process depends not only on the policies implemented in ECE but also on the response and policies of the West and member countries of the European Community. Despite the officially declared support for the reform process, the EC and its organizations have been slow to develop a coherent strategy towards this region. The lack of a long-term strategy is apparent not only in the political but also in the economic sphere. The emerging political cleavages within the EC are reflected in the ambiguous approach it has adopted towards ECE and Eastern Europe in general. This article aims to survey and evaluate the EC's policies and economic initiatives towards the three countries of ECE since 1989. In particular, attention is focused on the nature and likely impact of the Association Agreements with the EC, the role of newly created Community financial institutions and mechanisms, and direct foreign investment and assistance in the privatization programme. We conclude that the future political and economic stability of ECE and Western Europe depends, to a large degree, on the ability of the EC's political and economic institutions to respond to the long-term challenge posed by changes in ECE and other regions of the former 'Eastern Europe'.