Maria Ene’s traditional white house on a muddy, unnamed Romanian street doesn’t have running water, but it does have two satellite dishes sprouting from its fence.
Three of her five children have moved to Spain. It’s not that far, but with everyone feeling the pinch of Europe’s economic downturn, she sees them once a year at most, and needs to feel connected.
“I saw them on the Internet,” said Ms. Ene, 69, who lives in the village of Lupsanu, 75 kilometres east of Bucharest.
“A grandson of mine showed them to me as I felt at one point I could not go on,” she said, with tears in her eyes. “It’s hard there for them, but what would they do here? There at least they have a job.”
More than 20 years after the fall of communism, the wealth gap between the east and west of Europe persists, and countries from the Black Sea to the Baltic are shedding people at an alarming rate.
While membership in the European Union has brought prosperity to many, it has also made it easier to emigrate, drawing young people out of the east, especially rural areas, and leaving behind an increasingly older and poorer population.
Romania, the EU’s second-poorest member with an average monthly wage of $450, is one of the worst affected, with a 12-per-cent population drop in a decade, according to census data.
At the other end of the continent, the census in Latvia – a Baltic state which was seen as a great success story until the current financial crisis sent its economy into freefall – showed it lost 13 per cent of its people, mostly to emigration.
The population in comparatively richer countries like the Czech Republic and Poland has remained steady thanks to returning emigrants and others arriving from less well-off states in the region.
But to the south, in the Balkans, and in the northern Baltic states, the picture is grim. Censuses conducted across the continent in 2011 showed Lithuania has lost 12 per cent of its population in a decade, Bulgaria 7 per cent and Serbia, still outside the EU, 5 per cent. Hungary had 10.4 million people just after the 1989 fall of communism, but that slipped below 10 million last year.
Wealthy Germany’s population, by contrast, rose last year for the first time since 2002 thanks to immigration from the EU’s new members, despite the fact deaths were projected to exceed births, according to its statistics office.
People who opt to leave the poorer parts of Europe do not sense there will be an improvement in living standards any time soon.
“Ninety per cent of Romanians do not believe there is going to be a better future in Romania,” said Victor Ponta, who leads Romania’s leftist opposition and is favoured to be the next prime minister after a November election.
By 2060, Romania, Latvia, Poland and Bulgaria will have the highest share of elderly people compared with working population in the EU, Eurostat data shows. That means the number of taxed workers will decline just as government expenditure rises to help ever more pensioners in need of support.
Of Romania’s 19 million population, less than five million are workers paying taxes, with most of the rest pensioners, children, subsistence farmers or people working illegally. Costs for the more than five million pensioners amounted to 9 per cent of GDP in 2010.
Romania has raised the retirement age to 65 for men and 63 for women, but it will not be enough to keep the budget on track, and Latvia is considering a similar step.
“Under this worst case scenario, social security costs will mount to very high levels,” said Mihai Patrulescu, an economist at Bancpost, part of Greece’s EFG Eurobank. “To address this problem, governments would have three options: raise the retirement age, increase taxes or run permanently higher deficits.”
On the other hand, there are benefits to having big populations working abroad.
Romania’s huge diaspora sent roughly €2.6-billion ($3.4 billion) home to their families in 2011, some 2 per cent of GDP – well below the remittances in the boom years before the economic crisis but still a lifeline for poor communities.
Working abroad also helps people acquire skills and many eventually return with those skills because of family links, said Roderick Parkes, of the foreign policy think tank German Institute for International and Security Affairs.
“I think the panic is overdone and the reality is more nuanced,” he said. “It could eventually be good for Romania.”
Gabriela Gryger returned to Poland after working for Morgan Stanley, Soros Real Estate Partners and Goldman Sachs in London, New York and Frankfurt. Now in her mid-30s, she owns and runs a real estate investment agency in Warsaw.
“Poland has changed a lot,” Ms. Gryger said. “The real estate industry that I deal with has opened widely to foreign investors and developers, which also made Poland an attractive place for me to work.”
But in Romania, it’s the downside that is far more obvious.
Lupsanu has lost nearly a tenth of its population since 2002 and more than 3 per cent of those registered in the area work abroad, said Mayor Victor Manea.
“Around 60 per cent of the population in the commune is above 50, so I expect the population to continue dropping. Marriages are fewer and fewer, and the number of deaths is double the number of births in the last years,” Mr. Manea said.
Pensioner Ene is struggling to make ends meet.
“I have a 300 lei ($90) pension and my husband has 600 lei,” Ms. Ene said. “We live from one day to the next.”
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