Ghostly European appearing by lake (5)
I believe the answer is:
eerie
'ghostly' is the definition.
(I've seen this before)
'european appearing by lake' is the wordplay.
'european' becomes 'e' (abbreviation e.g. EU).
'appearing by' says to put letters next to each other.
'lake' becomes 'erie' (Lake Erie is one of the Canadian/US 'Great Lakes').
'e'+'erie'='EERIE'
(Other definitions for eerie that I've seen before include "Uncannily strange" , "Mysterious" , "Spine-tingling" , "Spooky, creepy" , "Spooky, macabre" .)