User blog comment:Fegaxeyl/French Resistance, anyone?/@comment-2012579-20101229192355/@comment-257949-20101229213243

I see the Southern Bloc states adopting some form of market socialism. Yugoslavia used a form of it, Dubcek supported it, Nagy wanted to switch to capitalism outright, the French and Italians may evolve their vision of Eurocommunism (which I think is dimly related to market socialism) early and establish it.

Assuming the Southern Bloc form of market socialism is like that of China's today - generally free market, though the key industries are nationalised - it would be unlikely that the Southern Bloc would join the European Coal and Steel Community (which would probably need the UK, rather than France, as a founding member, leading to further deviations from OTL). Similarly, the Southern Bloc would likely be reluctant to become part of the single market of the EEC/EU, though there would certainly be huge amounts of trade between them.

As to the fate of post-Cold War East Europe, it depends. The area could become an economic battlezone between Western and Southern businessmen, with fortunes thoroughly affected by how strong lingering communist support is. Romania and Albania would either stick with China or switch to the Southern Bloc. Hungaria is the only guarantee to join the Southern Bloc. Poland, Ukraine, Belarus and the Baltic States will be the main source of competition, though I get the feeling that the Southern Bloc will be more happy to receive immigrants and focus on building up its strength around the Mediterranean rather than spreading itself northwards. Let the EU move eastwards.

What this means for Greece and Turkey - and the underbelly of Russia (Georgia, Armenia, etc) - and their allegiances remains up for debate.