ABSTRACT
This chapter show that the asymmetrical eastern enlargement turned the previously symmetrical integration of the South also into a much more asymmetrical integration, as competition from low-wage Eastern European economies undermined the upgrading of many Southern European companies. Increasing competition from China and East Asia strengthened the cumulative negative effects inside the European Union (EU). Such asymmetrical processes of integration created huge structural imbalances within the EU, which for almost a decade were offset by the convergence of interest rates resulting from a common currency. The chapter argues that the EU enlargement project started out being laudably idealistic. The USA does not absorb any of the social costs of the Mexican deindustrialization of high-wage traditional industry and the rise of a low-wage maquila sector and allows little legal immigration. The European integrative model, on the other hand, employs subsidies, which accrue high costs on several counts.
