BERLIN, July 12 (Xinhua) -- As Euro 2024 approaches its climax, host nation Germany is leveraging the event to bolster its economy through tourism, commercial sponsorship, broadcasting and merchandise sales.
Despite current economic challenges, can the event provide a much-needed boost to the German economy and reverse its sluggish development trend?
The month-long tournament, spanning June 14 to July 14, features 51 matches. Many restaurants and bars have set up large outdoor screens to attract customers to watch the matches. This has significantly boosted food and beverage sales.
"The tournament showcases the impact of football economics in driving consumption," said Hou Lu, General Manager of Hisense Germany, one of Euro 2024's official sponsors. "At the end of June, Hisense's sales topped the German market, achieving a year-on-year revenue increase of 53 percent," he added.
The ifo Institute for Economic Research predicted that Euro 2024 would generate one billion euros in revenue for Germany, boosting German economic output by around 0.1 percent in the second quarter. The event is expected to attract 600,000 overseas tourists and create demand for 1.5 million overnight stays.
Guido Zoellick, president of the German Hotel and Restaurant Association, says that hosting such a significant international sports event positively impacts the nation's image and boosts public morale. This psychological uplift can further stimulate consumer confidence and spending.
However, while Euro 2024 has generated a short-term surge in consumption, its long-term impact on economic recovery remains uncertain.
In 2023, Germany's GDP shrank by 0.3 percent, making it one of the worst-performing major economies globally. Additionally, the International Monetary Fund (IMF) forecasts that Germany's economic growth might rank the lowest among major industrial nations again in 2024, with an expected growth rate of 0.2 percent.
German economists argue that the nation's economic recovery faces numerous uncertainties, and the football economy alone cannot fundamentally reverse the economic downturn.
The ifo Business Climate Index, a key indicator of German economic trends, fell to 88.6 points in June, marking its second consecutive decline. Clemens Fuest, president of the ifo Institute, stated "German economy faces significant challenges in overcoming stagnation."
The declining trend in the ifo Business Climate Index is mirrored by the German Consumer Confidence Index. According to the latest survey by GfK Market Research Group, the index fell from -21.0 in June to -21.8 in July.
Experts suggest that this decline reflects uncertainties caused by rising prices and slow economic recovery, making consumers more cautious. The drop in consumer confidence further exacerbates concerns about the economic outlook, indicating a challenging path to recovery.
"While the European Championship can boost economic activity in the short term, it cannot fundamentally address the long-term structural and economic challenges Germany faces. Comprehensive measures, including structural reforms, innovation, and investment, are key to achieving genuine economic recovery and sustained growth," said Michael Borchmann, former head of the European and International Affairs Department of the federal German state of Hesse. ■
