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Market turmoil rattles Europeans

Even in welfare states, people are worried about the future, especially for the younger generation.

October 12, 2008|Sebastian Rotella and Maria De Cristofaro | Times Staff Writers

ROME — Like most people these days, the pasta maker gets bombarded by the media heralds of doom.

He hears frantic updates from broadcasters, pompous platitudes from politicians, shifty corporate-speak from executives, impenetrable jargon from economists.

But Enrico Benigni doesn't need that noise to tell him how bad the crisis is. Out here in the real world, in the pasta shop he opened 31 years ago on the quiet, picturesque Via del Boschetto near the Colosseum, he has concrete evidence.

His customers buy a lot less pasta.

"People used to come every day, and each day they bought different kinds of pasta: on Thursday gnocchi, another day ravioli or tortellini, and tagliatelle the next," said Benigni, a bespectacled 56-year-old. "Now, they come once or maybe twice a week only. We have had about a 20% drop in sales."

The psychology of crisis has taken hold in the streets, workplaces and homes of Europe, unnerving a people accustomed to a robust welfare state that protects jobs and companies alike.

Italy, Spain, Britain and their neighbors had spent the last year afflicted by declining growth, rising unemployment, and sputtering industrial and real estate sectors. But Europeans tend to feel safer than Americans. They have been shielded from suffering the same plight as American workers: It's more difficult for the boss to fire employees.

Nevertheless, the speed and savagery of the upheaval have shaken that sense of comfort. There is only so much the government can do when globalization sends turmoil churning throughout the marketplace.

In interviews in recent days, Europeans expressed a generalized fear. They worried about their immediate livelihood, but especially for their families, their countries and the future.

"I am not worried about me or my wife; for us the little money we earn will be enough," Benigni said. "But I am worried about the future of my children. There was a point where they considered taking over our family business in which my wife and I worked with pride for so many years. But they saw that it was not worth it and chose to go different ways because this kind of shop, where we still make pasta with our hands, is destined to disappear."

Benigni's wife, Carmela Grasso, said, "People feel poorer and poorer. What is surprising is the fact that our shop is not situated on the outskirts of Rome but in a good area. People try to save wherever they can."

The bleak mood is also felt in another ancient capital to the north. In Paris, Genevieve Lafon, a bank employee on the eve of retirement, sees it among the high-paid hotshots with whom she works. Traders and executives wander the halls like zombies, said Lafon, who asked that the name of her bank be withheld to protect her and her co-workers' privacy.

"Anxiety is almost palpable," she said. "Customers have stopped calling, they have stopped taking appointments with their counselors, and there are hardly any financial operations to validate. Each and every one of us at the bank is wondering what will the future be like."

Lafon, 59, plans to retire in a few months to a small provincial house she spent a lifetime saving to buy.

"I am glad I bought my house a few years ago," she said. "I wouldn't have been able to afford it now with the prices and interest rates so high."

Her work has given her a front-row seat on the evolution of the financial meltdown. She saw the first tremors during the summer of last year when the sub-prime affair in the United States spread its toxic repercussions through the global banking sector. The crisis has escalated steadily since then.

"All the monetary funds having U.S. credit just plunged," Lafon said. "Progressively, our customers lost confidence and left massively with the crisis extending."

Like the Roman pasta maker, Lafon believes that the younger generation will suffer.

"I'd rather not look at the future," she said. "Mine is not very important, but that of future generations . . . it's not great. In 1923 in Germany and 1929 in the U.S., the crisis created a real trauma among young generations at the time."

Stephanie Desoche is a frontline representative of the imperiled generation. The stylish 31-year-old rents a one-bedroom apartment in a northern suburb of Paris that doubles as her office. After working a few years for a company as a translator, she decided to become her own boss. That's a rare and risky move in a part of the world where many university graduates dream of an ironclad refuge in the public sector.

Self-employment had gone well, but now Desoche wonders how much time she has before she takes a serious hit. Already she plans to cut back on clothes, leisure and time off.

"If the situation were to last too long, there are serious chances that my work will be affected," Desoche said. "I work as a translator, and I think companies will make savings on this function, even if this means they won't have the quality work they need."

More than despair, Desoche feels disoriented. There's a temptation to keep the cacophony of crisis at a safe distance.

"I am not panicking yet," she said. "I am kind of lost. I am afraid to get more information about what's going on . . . even if that's a contradiction."


Times staff writer Achrene Sicakyuz in Paris contributed to this report.

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