The paper discusses aspects of the debate concerning transition and transformation in Central and Eastern Europe. The author argues that the re-evaluation of space in the region is being articulated through the interaction of three major processes: first, progress from centralized state management towards a market economy; second, behaviour, cultures and institutions inherited from the socialist era and those more deeply embedded from pre-socialist times; and third, responses to opportunities or constraints created by the transformation itself. While de-industrialization, unemployment, inflation and currency depreciation were predictable, a significant divergence is occurring between Central Europe and the Baltic states which have achieved an economic U-turn as a result of real growth associated with further progress towards a market economy and south-eastern Europe and the CIS where decline continues. The commodification of space and its resources is diffusing eastwards, leading to a displacement of use-value by exchange value. Regional and local patterns, however, are becoming 'mosaic-like' as a result of the co- existence of commodification, state-protected enterprises, the rise of barter and growth of information activities. A predominantly bi-lateral east-west pattern of spatial interaction is being replaced by a multi-polar one
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