In contrast to the past, today’s globalization is distinctive as a micro-phenomenon that enables production integration and networking and, as such, creates deep international integration at firm level. There are high expectations that EU enlargement will lead to deep integration of central and eastern Europe (CEE) into pan-European industrial networks. It is certain that the extent and nature of the linkages that emerge between the east and the west of Europe will strongly shape the competitive dynamics and industrial development not only in CEE, but also in individual sectors in the EU. However, whether east-west industrial networks will act to improve the growth prospects of the enlarged EU or whether they will deepen the differences in levels of development and undermine the prospects for more balanced growth is an open issue.