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Pensioners in eastern European states are feeling the sharpest punishment for their governments' ambitions in taking the eastern European states into the European Union, as they grapple with the silent thief of inflation. Until recently eastern Europe had strong growth, but prices were fairly steady: now, led by food and fuel prices, basic necessities are rapidly being priced beyond people's reach. But prices surging at double-digit rates pose a dilemma for officials who are forced to choose between supporting growth and capping prices. With price rises galloping beyond target levels, the rampant erosion of purchasing power is also delaying some countries' hopes of adopting the euro. For people in the east, much poorer on average than their western counterparts and spending more of their income on basics, price rises are a daily dilemma. The rate of price rises in Bulgaria at 13.2 percent is not far behind Latvia's 16.7 percent, the highest in the EU. 80-year-old Latvian Alexander Ivanov has a pension which is 120 Latvian lats (170 euro) a month and his food needs are taking more than half of it. He says he has started to sell his belongings to find money to live. "Prices grow for everything," he said. "Last month I was buying meat for LVL 1.80 (2.50 euro) and now it costs already LVL 2.50 (3.50 euro). All products get more expensive, so it is hard for us to afford them," he added. This is confirmed by market vendor Ivita Ivanane. "The prices for products rise, raw materials cost more, as well as the delivery service due to price rises for petrol and diesel. Everything gets more expensive, so the prices rise quickly," she said. In Latvia, a sense of impending crisis has come from daily newspaper reports about how food is now more expensive than in western Europe, even though salaries are much lower. In Bulgaria, 72-year-old Maria Vankova is living off savings, unable to pay for power and medicines on her pension of 102 levs 52 euro) a month. "I have some savings and that's how I keep surviving, I would have died a long time ago otherwise," she said, complaining that the situation has become much worse since Bulgaria joined the EU a year ago. Mariana Petrova is a mother of four who runs a small business. While shopping at Sofia's largest market "Zhenski Pazar", she says she is paying out a lot more for her family's basic necessities. "I have the feeling that food prices have jumped more than 100 percent. If a family used to spend about 500-600 levs (255 - 305 euro) a month for food and consumables, now they need to spend more than 1500 levs (765 euro)," she said. Bulgaria's average monthly wage of 250 euros is the EU's lowest: many Bulgarians travel to neighbouring Greece or even Turkey for cheaper food. "I often travel to Turkey on business and I use the opportunity to buy cheaper vegetables, fish, meat, cooking oil, detergents. Fish is much cheaper there and better quality. Price ratios are one-to-three in Turkey's favour," Petrova said. Many Bulgarians say that EU membership has done nothing but bring skyrocketing prices. "People have been cheated," said market citrus seller Paulina Pavlova. "They were promised that first incomes would catch up with EU levels and prices would follow. But it's now the other way round - the prices here are higher than in the EU - I know this because I go every week to Greece. The cooking oil there is one euro. The olive oil is more expensive, but not as much as here and it is really good," she added. Governments and central bankers tend to reassure people that the pressure of price rises will ease off in the second half of the year. Latvian Prime Minister Ivars Godmanis has said he sees inflation at between 9 and 9.5 percent by the end of 2008. Georgi Angelov, economist at Open Society Institute in Sofia, said he expected inflation in Bulgaria to drop below 8-10 percent at the end of 2008 and said incomes had been rising. But he said people in Bulgaria are still poor compared to the rest of the EU. "For people who are poorer, they spend more money on food, so they see higher inflation. If we compare Bulgaria to the European Union, everyone is poor here, even the wealthy people are not so wealthy," he said. The Baltic states and Bulgaria have not only had their hands tied by pegging their currencies to the euro, disabling them from adjusting interest rates to tackle inflation. They have also been forced to import low interest rates from the euro zone just when their own growth has been strongest. Instead, governments use budget policy to rein in demand. Bulgaria has the tightest fiscal stance in the EU with a surplus last year of 3.8 percent. Latvia and Estonia have also built up surpluses and commercial banks have slowed lending, which helps decrease consumer demand. The quandary is that such fiscal rectitude is good for fighting inflation, but is not ideal when growth slows, as in Latvia, Lithuania and Estonia: Latvian and Lithuanian growth edged down to 8 percent in the final quarter of 2007 and in Estonia it has slowed to 4.5 percent. High inflation can also increase political pressures. In Latvia, the government has had to agree to index pensions twice a year. In Bulgaria, teachers, doctors, miners, pensioners and social workers have all protested to demand higher pay. For Poland, the Czech Republic and Hungary -- with no fixed rate regime enabling the central bank to use interest rates to fight inflation -- the challenge is getting the balance right between dampening prices, potentially at the cost of growth.