Shaken by Paris attacks, France banking on ‘feel good factor’ of Euro 2016
Shaken by Islamist attacks and beset by strikes, France is hoping the “feel good factor” of a successful Euro 2016 football tournament will fire up a tentative economic recovery, although the direct impact will be short lived.euro 2016 Updated: Jun 10, 2016 20:12 IST
Shaken by Islamist attacks and beset by strikes, France is hoping the “feel good factor” of a successful Euro 2016 football tournament will fire up a tentative economic recovery, although the direct impact will be short lived.
France’s economy has shown signs of renewed vigour in the last 18 months after three years of near stagnation, growing 1.3% in 2015 and confounding expectations in the first quarter with a 0.6% growth spurt.
But scenes of uncollected rubbish piling up in the streets of Paris, cancelled trains, pickets and the spectre of flight cancellations as Air France pilots stop work are spoiling the efficient, prosperous image the government was hoping to project.
As he watches the opening France-Romania match at the Stade de France stadium on Friday, President Francois Hollande, a keen football fan, will also certainly be hoping a winning French team will give his dismal popularity ratings a desperately needed fillip.
“It can showcase ‘things are getting better’,” sport minister Patrick Kanner told Reuters, referring to Hollande’s televised assertion that has become a mantra repeated by ministers and mocked by opponents.
In pure financial terms, the windfall France can expect from the month-long tournament is relatively modest, however.
A study by Limoges University, commissioned by European football’s governing body Uefa, put the net injection of foreign funds into the economy, including tickets bought by tourists and organisation spending, at 1.27 billion euros ($1.43 billion).
That is about 0.05% of gross domestic product (GDP), nothing more than a “flash in the pan” on the scale of one quarter, according to economist Nathalie Henaff of Limoges University.
“There will be a windfall, but a limited one from a macroeconomic point of view,” her colleague Christophe Lepetit added. “The Euros won’t kick-start the economy. It can simply momentarily support some sectors,” he said.
That would be no small feat for the hotel and restaurant sector, which has yet to recover from last November’s militant attacks that killed 130 people in Paris bars, a concert hall and outside the stadium where the opening game will take place.
“A successful tournament should help France to boost its image as a safe tourist destination, which had been somewhat damaged following the terrorist attacks last year,” economist Diego Iscaro at IHS Global Insight said.
Should the “Les Bleus” national team do well, France can also expect a small, temporary jolt for consumer confidence, he added.
But if the government failed to get a grip on the strikes, or if a bloody attack took place just as millions of fans watch the world’s second-biggest football event, the damage to France’s reputation could outweigh any economic benefit.
France is deploying nearly 90,000 police and security staff to head off any risk of violence.
“Images of road blockades and riot police using water cannon and firing tear gas, widely reproduced by international media, could discourage many ticketless fans to travel to France to enjoy the festive atmosphere,” IHS’s Iscaro said.
As for Hollande’s popularity, languishing at a record low of just 16% approval, Frederic Dabi from the Ifop pollsters does not expect much of a boost, even if star strikers Olivier Giroud and Antoine Griezmann propel France to victory.
“In the 1984 Euros, (president) Francois Mitterrand was very unpopular and it didn’t change anything for him, even though France had a stellar performance and (Michel) Platini scored nine goals,” he said.