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Germany, as Europe's leading economy, has seen modest economic growth in recent times. After a decline in GDP in 2023, government projections point to a modest recovery, with growth forecast at 0.3% for the current year. This comes after years of economic turbulence marked by the repercussions of the Covid-19 pandemic and rising energy costs. Against this backdrop, Euro 2024 comes at a time when Germany is looking to revitalize its economy and boost consumer and investor confidence.
Economic institutes such as Munich's IFO predict a limited economic impact of Euro 2024 on the German economy as a whole. Although the event is likely to attract over 600,000 foreign tourists and generate around one billion euros in additional revenue, mainly in the hotel, restaurant and food retail sectors, the overall benefits could be offset by redistribution rather than a net increase in consumption.
Past experience, such as the 2006 World Cup in Germany, provides a frame of reference for assessing the potential economic impacts of Euro 2024. Back then, massive investment in infrastructure was required, contributing significantly to the economy through the construction of stadiums, roads and other facilities. For Euro 2024, however, Germany did not undertake such ambitious infrastructure projects in advance of the event, thus limiting the positive direct economic effects in terms of job creation and public spending.
Despite an expected increase in spending by tourists and spectators during the competition, the overall effect on domestic consumption in Germany remains uncertain. Studies indicate that German consumers may spend more in some event-related areas, but reduce spending in others to compensate, resulting in overall stability rather than a significant increase in consumption. In addition, it is noted that continental sports tournaments such as the Euro can have a negative impact on long-term economic growth, negatively affecting GDP per capita in host countries during the period of the event.
In the midst of the Euro 2024 event, Germany faces broader economic challenges that require a robust political and economic response. To achieve sustainable growth, experts stress the importance of a significant recovery in domestic demand and increased stimulation of foreign trade. While the event could provide a temporary boost to the tourism and hospitality sector, a longer-term economic strategy is needed to support a sustainable economic recovery.
