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Spain receives economic boost from World Cup win
The historic Spanish World Cup triumph is
also likely to be more than just a football
win for Spain. The 1- 0 extra time win
over the Dutch will spur Spain’s economic
growth following the complete mood
swing that has overtaken the country.
Research has shown that countries that
win the World Cup receive a significant
economic boost from the overwhelming
“feel good” factor that envelops the
country. It couldn’t have come at a better
time for Spain which was one of the group
of EU countries nicknamed the PIGS
(Portugal, Ireland, Greece, Spain) which
were close to economic collapse as a
result of the Global Financial Crisis.
Economists predict that the euphoria
generated by the win could lift Spain
out of crisis and propel the country to an
economic growth of 0.7 percent by the
end of the year.
The burst of excitement has temporarily
overshadowed the gloomy economic
reality that Spain is facing today. The
economy shrank 3.6 percent in 2009 and
is set to shrink another 0.4 percent in
2010. The unemployment rate is as high
as ever, reaching over 20 percent.
Before the World Cup, many economists
predicted Spain’s collapse to be similar
to that of Greece, but with a lot more
repercussions, since it is the European
Union’s fifth largest economy.
The good news is that all those woes may
be healed by the magic wand of soccer.
“It generates confidence in our country,
here and abroad, and that will also be
good for GDP,” Spain’s Finance and
Economy Minister Elena Salgado told
reporters, saying that the World Cup “is
good” for the country.
Miguel Angel Fraile, who is the head of
the Spanish Commerce Confederation,
representing around 450,000 retailers,
said that “consumption will certainly
rise, but we don’t know by how much,”
according to an AFP interview.
“When a society is happy, that always has
repercussions on consumption,” he said.
After the last World Cup 2006 in Germany,
ABN Amro Bank did a study—called
“Soccernomics”—on how the world’s
biggest soccer competition affected the
participants.
“A World Cup winner enjoys an
average economic bonus of 0.7 percent
additional growth, while the losing finalist
suffers an average loss of 0.3 percent
compared to the previous year,” said the
“Soccernomics” report.
According to statistics in the report, the
1986 World Cup winner—Argentina—
recorded a stunning 7.1 percent
economic growth. Germany (the 1990
winner) posted a 5.7 percent growth,
Brazil (1994 and 2002 winner) posted 5.9
and 2.7 percent growth, respectively. The
previous winner in 2006—Italy—posted a
2 percent economic growth for the rest of
the year.
The reasons for higher economic growth
of the winning countries are centred
around higher consumer spending,
increased tourism, and a presence of a
“feel-good” factor that gives confidence to
consumers. Consumers will certainly buy
sports merchandise, souvenirs, clothes,
and other goods and services.
Spain, being the third most visited country
by tourists in the world—after United
States and France—is feeling rejuvenated
after the win as a more confident tourism
industry welcomes tourists to its famous
places such as Barcelona, Madrid, Seville,
and of course the islands of Mallorca and
Ibiza.
“There are many good things in Spain,
but the most important is football,” said
the coach of Spanish national team,
Vicente del Bosque. “Football is the
locomotive for all things in the
country.”
World Cup insurance cover topped £6.2 Billion
South Africa
Insurance coverage for the 2010 World Cup held in South Africa in
June and July was insured for over £6.2 billion, with FIFA, national
teams and broadcasters all taking out insurance policies.
The stadiums and the training facilities were insured for at least
£3.2 billion, and other business ventures attached to the World Cup
make up an additional £3 billion of insurance.
Chris Nash, underwriter at Sportscover, told the BBC: ‘Competitions,
offers, prizes, sponsorship, broadcast rights - it’s impossible to
know how many there are, but all companies with these financial
implications need coverage’.
This coverage did not include the cost of policies which apply to
players in the event of injury.