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 5 million are workers paying taxes, with most of the rest pensioners, children, subsistence farmers or people working illegally. Costs for the more than 5 million pensioners amounted to 9 percent 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."
The EU has declared 2012 the "European Year for Active Ageing" to encourage both companies and workers to support the idea of employment at older ages and to help older people to continue living independently.
Newly appointed Labor Minister Claudia Boghicevici said Romania plans new legislation to give tax breaks to companies hiring older people and better support for those in need of special care. But those kind of measures will do little to improve the lot of people in villages like Lupsanu right now.
ABANDONED VILLAGES
In February, temperatures in Romania plunged below minus 20 degrees Celsius and snow storms blocked roads, railways and ports and even buried many houses in the south.
Elderly villagers without young family members or neighbors struggled to dig their homes out from under some three meters of snow and had to be rescued by the army.
Abandoned homes and 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.
Inta Nogda, a 45-year-old elementary school teacher, said her son left for England with his girlfriend and her brother. Now, all of his friends have followed.
"He told me 'You know, Mum, if I had anything to do here, I would never have left,'" Nogda said. "There are six families that live in our building. Out of 21 people, eight are abroad."
Rebeca Pop left Romania in 2010 to study in the United States and does not expect to return any time soon.
Pop, 24, is the kind of young person Romania, which is rich in resources like farmland, gas, precious metals and a skilled but still relatively cheap workforce, needs to keep to tap its full potential.
"I had multiple reasons to leave Romania: quality of education, work environment, opportunity, money and social issues," Pop told Reuters by telephone from Oklahoma, where she has nearly completed a Master's degree in communications.
Pop already has a research job in Michigan. After that, she may move to another country.
"I was tired of seeing people who do not respect each other on the streets, people who always look stressed and unhappy and who cannot enjoy small things in life," she said.
2-3
