Europeans get canny, creative in crisis

By Kerstin Gehmlich

BERLIN (Reuters) - Lukas Schmidt was staring at the alluring photos of white sandy beaches and palm trees on display in the shop window of a Berlin travel agents but sighed and turned away.

"I actually wanted to take my girlfriend to Spain in December, but I think we'll probably end up staying here," said the 27-year-old mechanic.

"I don't think prices have gone up, but with this credit crisis all over the media, it does make you wonder what's going to happen next," he said.

Like Schmidt, many Europeans say they are cutting down on non-essential spending on things like holidays, furniture, clothes and organic food, and trying to save by shopping at DIY and discount stores in the face of the financial turmoil.

But on the other hand, the crisis is creating novel business openings including "credit crunch" chocolate bars and "meltdown parties." And Spanish authorities are finding they can make ends meet by getting tougher on traffic offences.

"There are certain things which I have cut down on -- bottled water for example," said German student Sarah Klaus. "It's scary to think that this credit crisis stuff is now actually influencing the way I live. Occasionally, I used to shop in organic shops, but now I just think of it as a waste of money."

In Spain, media reported many young people were moving back to their parents' homes for financial reasons.

"I had to leave my flat, just when I'd got everything. Now here I am with my parents again," Marc Solsona, a 35-year-old who had just managed to buy a flat near Barcelona when he lost his job as a real estate agent, told El Pais daily.

Some 60 percent of Germans believe the economic outlook will worsen, a recent opinion survey by pollster Forsa said. In France, a BVA poll showed 64 percent of voters had become more pessimistic over their financial situation in recent weeks.

Businesses ranging from luxury retailers to department stores, hotels and charities have started to feel the effect.

In Italy, AIBA, a charity for abandoned children, said worry about the banking system had led to a 20 percent drop in donations for children in orphanages.

Karsten Schulz, director of German online luxury auction house Exklusivwaren, said rich people had already started to cut back on spending before the current crisis hit.

"It's clear that luxury products don't sell as well as they used to," he said.

In Britain, retailer John Lewis reported an 8.3 percent drop in weekly sales on October 3.

MELTDOWN MERCHANDISE