European Championship Won’t Save German Economy, Study Shows
The European Championship to be held in Germany this summer is unlikely to turn into a summer fairytale for the euro zone’s largest economy as it struggles for growth, a study by a leading institute and seen by Reuters showed.
“The experience of the Football World Cup in 2006 shows that major sporting events are not economic fireworks,” said Michael Groemling, head of the Institute of the German Economy IW Koeln.
Germany’s industry-heavy economy has struggled since Russia’s February 2022 invasion of Ukraine, which pushed up energy costs, and it is now in its fourth straight quarter of zero or negative growth, weighing on the whole euro zone.
Consumer Spending
Many consumers are likely to use Euro 2024 as an opportunity to buy a new television, invite people to a public viewing or drink one more beer while watching the games, he said.
“But they will save money elsewhere: bratwurst instead of a restaurant, TV instead of going to the cinema,” said Groemling. “As a result, consumer spending is not necessarily increasing, but shifting.”
The event could provide a small economic boost for the 10 cities hosting the games. However, this will not result in higher gross domestic product at the end of the year, according to the IW study.
Germany’s GDP
Germany’s gross domestic product (GDP) shrank by 0.3% in 2023, making it the world’s weakest-performing major economy. Modest growth is expected this year.
It is true that some money will still flow into some stadiums in the form of modernisation work. “However, no new roads or other infrastructure will be built, as was the case with the World Cup in South Africa, for example,” said Groemling.
Income from the sale of TV rights also went to the football association UEFA, which is based in Switzerland.
However, psychological effects should not be underestimated. “A major sporting event can brighten the mood and improve the image of the host country,” said the expert.
ESM
Related news
American growth in the second quarter turned out to be better than expected
In the second quarter, the gross domestic product (GDP) of…
Read more >Kaufland To Join Buying Alliance AgeCore In 2025
German retail chain Kaufland is set to join the AgeCore…
Read more >GfK’s German consumer sentiment index for August improved
The German consumer sentiment index of the Nuremberg economic research…
Read more >Related news
Valeo Foods Completes Acquisition Of Appalaches Nature
Valeo Foods Group has completed the acquisition of Appalaches Nature,…
Read more >Carrefour grows in France and Brazil, lags behind in rest of Europe
Carrefour says it is rather pleased with its financial results…
Read more >Food and beverage innovation plunges nearly 50% since 2007: Mintel
The market research firm said about a quarter of items…
Read more >