"The Homecoming"

by Nicholas Royle
originally published Shadows Over Innsmouth, 1994

Daniela is a refugee from Romania, living in Belgrade.  She sees the news about the fall of the Ceausescu regime.  She returns to Bucharest, looking for the brother from whom she was separated in an orphanage many years ago. 

Bucharest is hardly a bastion of freedom.  Food shortages, paranoia, and bombed-out buildings.  Daniela finds her way to her brother's address, but no sign of him.  She is haunted by dreams of bodies of filthy water, and a reef.  Sometimes these dreams seem to occur when she is awake.  She begins to doubt Ceausecu is really gone.

While a very potent depiction of paranoia and depression, almost Shirley Jackson-level, it's hard to say where this story is going and particularly hard to discern it's actual connection to Lovecraft, and especially to Innsmouth.  Other than Daniela thinking of the Securitate as "Deep Ones" and Ceausecu and his wife as "The Old Ones", there's not much there.