In former Communist states, populations are shrinking fast

Of Romania's 19 million population, fewer than five million are workers paying tax

Lupsanu, Romania

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 and leaving behind an ever older and poorer population.

Romania, with an average monthly wage of €350 (£290), is among the worst affected, with a 12 per cent population drop in a decade. At the other end of the continent, the census in Latvia showed it lost 13 per cent of its people, mostly to emigration. Both countries have had to impose harsh austerity measures.

The population in comparatively richer countries such as the Czech Republic and Poland has remained steady, thanks to returning emigrants and others arriving from less well-off states. 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, because of immigration from the EU's new members, despite the fact that deaths were projected to exceed births. By 2060, Romania, Latvia, Poland and Bulgaria will have the highest share of elderly people compared with working population in the EU. Of Romania's 19 million population, fewer 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 accounted for 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. Romania plans to give tax breaks to companies hiring older people and better support for those in need of special care. But those measures will do little to improve the lot of people in villages such as Lupsanu right now.

In February, temperatures in Romania plunged below minus 20C and elderly villagers had to be rescued by the army. Abandoned villages dot the Latvian region of Latgale, near the border with Russia. In the town of Merdzene, a new school stands by an abandoned Soviet-era apartment block covered with shattered and taped windows.

There are benefits to having big populations working abroad. Romania's huge diaspora sent €2.6bn home to their families in 2011, some 2 per cent of GDP – well below the remittances in the boom years but still a lifeline for poor communities. Jobs abroad also help workers to gain skills, and many return, with those skills, because of family links, said Roderick Parkes, of the think tank German Institute for International and Security Affairs.

Gabriela Gryger returned to Poland after working in London, New York and Frankfurt. Now she owns and runs a real estate investment agency in Warsaw. "Poland has changed a lot," Ms Gryger said. "The real estate industry has opened to foreign investors and developers, which also made Poland an attractive place for me."

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