RemittancesGateway.org

Europe's Crisis Stirs Unrest on Its Eastern Edge

Wednesday, 01 June 2011 12:02

When Italy's housing boom went bust, Vasili Mutu lost his job as a construction worker in Milan and had to return to his small village here where he now ekes out a living as a handyman.

As migrant workers from Europe's periphery have lost jobs or seen their wages cut amid the downturn, the amount of cash they are sending back has dropped sharply. And jobless rates have soared as those out of work return to communities they had left in search of a better life.

That dislocation is translating into mounting pressure on governments short of money. Demonstrators have taken to the streets this year in Romania, Croatia and Serbia—all affected by slowing remittances—in protests fueled by economic woes.

Moldova, a former Soviet republic that is Europe's poorest country, has also been the most dependent on funds sent back by citizens working abroad—in the West as well as in Russia. In 2008, remittances hit a high of about $1.7 billion, or more than one-quarter of the nation's gross domestic product.

After the downturn hit, inflows dropped precipitously. Last year, total remittances were about $1.2 billion in this nation of 4.3 million people, down more than 25% from the previous peak. Moldovan authorities are hopeful migrants' earnings will improve in 2011, but it could take years to bounce back completely.

"Migrants are earning less and remitting less," said Ghenadie Cretu, coordinator of the International Organization for Migration's migration and development program in Moldova. "It has hit households and the state budget hard."

About a third of Moldovan households receive remittances, the organization says. In more than half of those, the money sent home accounts for more than half of total income.

In Raciula, where the spring thaw has turned the dirt roads to rutted tracks thick with mud, residents say about half the village's 700 families have a member working abroad. Many are struggling.

The Mutus say they are scraping by raising chickens and corn on a small plot and heating their house with firewood they gather themselves instead of using natural gas. "We want to buy a cow, but we can't afford one," said Anastasia Mutu, Mr. Mutu's wife.

The couple both spent years toiling in Italy—she as a domestic helper for the elderly while he was building houses—and devoted the money to their children's education, hoping they would have a better life.

A son graduated from medical school, specializing in anesthesiology. A daughter will finish college this year. So far, however, the doctor hasn't found work. The prospects are cloudy for the daughter as well.

Mrs. Mutu said she hoped the whole family can get work picking berries in Norway this summer. Each person can earn more than €1,000 ($1,430) a month, she said. A starting doctor's salary in Moldova, in comparison, is about €100 a month, Mrs. Mutu's son said.

Migration often exacts a heavy toll. "The money is very good," said Efim Poiana, who used to go to Russia to do seasonal construction work. "But it breaks apart families."

Mr. Poiana's marriage ended when his wife, who had been working for years in Italy, brought the couple's two daughters to live with her there and filed for divorce. He said he hasn't seen his children in three years.

Now remarried, Mr. Poiana runs a fish farm, grows grapes and makes wine. He invested the money he earned as a migrant laborer to set up the vineyards and aquaculture business. "Only a few people are smart enough to invest in land or a business," he said.

Most migrants spend their wages on daily household consumption and home improvements, development experts say. Relatively few set up money-making businesses at home. That has helped to create a cycle where successive generations must leave home to find work.

Moldova's new prime minister, Vlad Filat, said he was trying to change that. He is trying to improve the legal system, streamline bureaucracy and curb corruption to encourage investment. He is also trying to make it easier for Moldovans to work legally in the EU and travel back and forth to stay in touch with their families.

"Our goal is national development to create jobs so people can come back home," Mr. Filat says. "If people see it is possible to find work, to live well here, they will come back."

Last year while campaigning in national elections, Mr. Filat traveled to Italy and gave a speech in Padua, home to a large Moldovan migrant community. In the audience he recognized two of his own cousins. Both had left Moldova to find jobs. "It was a very emotional moment," Mr. Filat said.

For now, though, working abroad often seems like the only option to many Moldovans.

Ms. Mutu said she would like to return to Italy and her old job. "Here we have nothing. No work and no pension," she says. "I miss Europe so much. I dream in Italian."