Introduction

Subsequent to the dismantling of the Soviet Union in the 1990s, improved political stability and reforms have substantially changed the economic environment in the Central and Eastern European economies. The political transition has resulted in improved conditions which in turn have led to real economic growth superior to that in Western Europe as well as to a continuous flow of capital into the region.

An event that has had significant political impact on a group of Central European economies is the accession to the European Union (EU) on the 1st of May 2004. As of this date, ten additional states joined the EU, bringing the total number of member states to 25. Eight of these ten new member states are former Soviet Union satellite states located in Central Europe and the Baltic region. The accession process is likely to have affected not only the development and integration of the Central European region but also the perception of the respective markets by international investors.