After the end of the Soviet era the tendency of De-industrialization was prevailing in the former member states of the Soviet Union as well as all other former socialist countries of Central and Eastern Europe, including East Germany. This harmful ransitional process, and the emphasis of some of the countries on the export of raw materials have mostly provoked pauperization instead of prosperous development in Eastern Europe. Significant lessons can be drawn from the recent experiences of the countries. They were facing substantial market and political failures. An economy which solely relies on the free market does not work, as well as an economy based on the export of raw materials or service and agricultural sectors does not automatically bring economic growth and welfare to the majority of people. Now more than ever, the countries need a new social contract which will be based on the concepts of inclusivity and sustainability. The authors argue that the countries require a modern industrial policy, which will transform the current palliative development models into more inclusive developmentalist states. A strong manufacturing sector will help the countries to overcome the transition period and to fully be competitive on the EU-market.