The World Cup, German Money-Maker | Business| Economy and finance news from a German perspective | DW | 06.04.2005
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The World Cup, German Money-Maker

The World Cup lets fans dream and government economists as well. One year before the big event in Germany, analysts are already wondering just what the tournament can do for the economy.

Development: Munich's Allianz Stadium, built for the World Cup

Development: Munich's Allianz Stadium, built for the World Cup

The way German soccer legend and World Cup chief Franz Beckenbauer sees it, next year's tournament has already resulted in one winner: German companies.

"Our economics minister estimated the economic advantages (brought by the tournament) at 10 billion euros ($12.8 billion) -- and that's only the economic part," said Beckenbauer (photo). "Every participant will profit from a boost in image."

Franz Beckenbauer falsch verbunden

Franz Beckenbauer, head of the World Cup organizing committee

Postbank chief economist Marco Bargel is a bit more exact. According to his figures, more than 6 billion euros have already been invested in upgrading and expanding infrastructure, the stadiums, and hotels and restaurants. The demand for goods and services ahead of and during the World Cup will bring in "two to three billion euros," he said.

Reaping benefits years after

In all, say experts, hosting the World Cup will mean a growth of 0.5 percent in Germany's gross domestic product -- welcome news at a time when the economy is sputtering.

The country has seen this before. The 1972 Olympics speeded up development in host city Munich and the rest of Germany "between 12 and 15 years," said Holger Preuss, a sports economist at the University of Mainz.

The transit system, road projects and other infrastructure developed for the Olympics also set Munich on the road of transformation from a sleepy Alpine city to a modern metropolis.

Demand for sporting goods - and security

"They were able to take the investment needed for hosting an Olympics and produce an increase in development," Preuss said.

The German economy will benefit the most from the World Cup in the early months of 2006, before the tournament actually starts. But the Postbank analysis also projects some gains for the overall economic growth during the tournament as well.

Farbe Orange Niederlande Fußball Fan

Soccer fans will be bringing plenty of spending cash with them

Electronics and sporting goods stores and companies will benefit from soccer fans' spending sprees. And if the Athens Olympics last August was any example, security services companies, as well, can expect a jump in business.

Tourists could bring in one billion euros

Though there is still a year to go before the referee whistles the start of the first match, Germany's tourism sector is already getting warmed up. Not only the 12 cities that will host matches -- from Hamburg to Hanover to Munich -- but other German regions are also readying themselves for a storm of tourists. Organizers expect more than one million visitors -- and lucrative times ahead.

Each visitor spends between 800 and 1,000 euros for a five-day visit according to rough estimates, said Bargel.

"That means foreign visitors will bring in up to a billion euros," he said.

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