This is a report sponsored by UNICEF on the effects of economic and political transition in Europe, particularly Eastern Europe, on young children and adolescents. The economic theories and changes in labor and markets which have characterized European transitions in the past few years have paid little attention to issues of poverty and child welfare. This economic transition has placed increased responsibility on families who find themselves undergoing economic hardship. The projected European economic growth has instead become a recession. Some countries have seen institutional weakening, predatory privatization, and monopolistic markets. Such conditions have drastic social costs, including increased poverty, mortality, and stress. Of all age groups, children have been the most negatively affected. These negative effects include: increased incidences of morbidity and low birthweight, increases in juvenile crime rates, and increases in the number of teen pregnancies. (Contains 32 references.) (JW)