The kick-off of the European Championships comes at the right time for the ailing German economy, with hopes for a repeat of the 2006 World Cup “summer fairytale” that boosted consumer sentiment. However, economists are tempering expectations, with the German Economic Institute (IW) not seeing this year’s championship as a significant stimulus. They expect any increase in consumer spending to simply be postponed rather than boosted.
According to the IW analysis, the experience of the 2006 World Cup showed that expenditures on items like new TVs were saved elsewhere, with no significant boost to infrastructure spending either. The Austrian economic delegate in Berlin, Michael Scherz, also believes that the championship may not provide a major economic boost, especially for German tourism, which can be a zero-sum game due to conflicting visitor patterns.
Despite this, there may be a positive effect on the mood if Germany makes it to the final, as mentioned by Scherz and the IW. In Austria, sectors like catering, food retail, sports shops, and electronics retailers are anticipated to benefit from increased consumer sentiment during the championship. The retail sector in Vienna is forecasting significant EM sales, with football fans spending an average of 140 euros on matches, particularly on food, electronics, and sports products.
While the economic impact of the European Championships may not be substantial, there is potential for increased consumer sentiment and spending in certain sectors. In Austria, the mood and consumer sentiment may see a boost, especially if the national team performs well. The championship may not be a significant economic driver, but it can contribute to a positive overall sentiment among consumers and businesses.