ABSTRACT
German trade, investment and associated state support have been critical in the transition to liberal economics in Central and Eastern Europe/Former Soviet Union (CEE/FSU). At the same time, local administrative inefficiencies, corruption, contention over European Union (EU) policies and budgets, and politics influenced by social insecurities, affected the expansion of entrepreneurial activity. In 1999 a group of leading business and political figures outlined some linkages and common objectives of German commerce and foreign economic policy in CEE: The institutions and confederations of the German external economy naturally work together with the federal government - and some Land governments. In CEE 'economic life remains highly politicised' and 'political uncertainties continue to set limits to the influence of potential globalising trends in the region'. Instead of a 'logic of innovation', it is characterised by a 'logic of exchange', or 'internationalisation'.
