The end of the Cold War and the collapse of the Soviet bloc were greeted with considerable optimism and expectations and estimates that the integration of the successor states into capitalism global economic arrangements would bring development and prosperity. In practice this has not eventuated in Russia and Ukraine and much of the former USSR, and instead there has been a situation of economic collapse. Only in the EU’s front-running group of applicant countries for membership and in Slovakia could there be said to have been a recovery from earlier collapse and several years of sustained economic growth. Earlier optimism is found to have been based on often-unrealistic assumptions rather than to have been strictly consistent with economic theory. Theories of globalisation, regionalisation and dependency are considered and their ability to explain present situations assessed. The regionalisation process as it affects EU membership applicant countries differs from globalisation as experienced elsewhere in CEE in a number of major ways, but it nevertheless also involves the creation of ‘hub and spoke’ arrangements and the shifting of labour intensive low technology transfer activities there. It is concluded that geopolitical factors must be taken into account in order for the the processes involved and their outcomes to be fully understood.