Euro 2008 will not save Swiss economic slowdown

ZURICH (Reuters) - Hundreds of thousands of soccer fans will spend millions of francs on beer, bratwurst and beds at Euro 2008 next month.

A giant soccer ball is pictured on Lake Leman in Geneva May 13, 2008. REUTERS/Denis Balibouse

The world’s third-largest sports event will be no more than a drop in the ocean for the Swiss economy, however, and will not save the Alpine nation from following the rest of the world into slowdown.

“The economic effect is so small, it will be hard to detect in the statistics,” said Urs Mueller, director of Switzerland’s BAK Basel economics research institute.

Up to 1.4 million foreigner visitors will add business for hotels and restaurants and for retailers selling merchandise and food, and may create 7,500 jobs, though most of them will be temporary.

That could create an additional gross value added of up to 860 million Swiss francs ($813.6 million), a Swiss government study showed, making up less than 0.2 percent of the Swiss economy which has a size of some $420 billion.

Switzerland, which is co-hosting the June 7-29 event with Austria, has been experiencing its strongest boom in decades over the last four years but is now losing steam as a global slowdown and credit crisis take their toll.


Like Germany, whose economy gained little momentum when millions of fans celebrated a four-week World Cup party two years ago, Switzerland may find the experience rather sobering.

“The World Cup has put millions in the coffers of FIFA and the German Football Association DFB but the economic impact of the sport event was very limited,” concluded the German DIW research institute in a study last year.

Germany hosted four times more matches than Switzerland will, with 32 teams participating in the World Cup comparing to the 16 at Euro 2008.

Some sectors might get a boost from the world’s third-biggest sports event after the World Cup and the Olympics.

Swiss hotels expect more than half a million additional overnight stays, coming on top of last year’s record 36.4 million stays.

Swiss retailers -- especially in host cities Basel, Berne, Geneva and Zurich -- hope to cash in, selling everything from toothbrushes in the participating teams’ colors to football-shaped thermos flasks and handbags.


UBS, the country’s largest bank, will try to deflect some attention from its huge subprime troubles, organizing 16 public viewing arenas in the country.

State-controlled Swisscom also sponsors the event, a logical follow-up from providing the technological backbone for the media coverage.

Such sponsorships are not entirely free of risks.

Credit Suisse -- sponsors of the Swiss national team -- made hasty apologies after reports showed its give-away footballs might have been produced by child laborers.

The best most economists are hoping for is a good showing of the Swiss national team and the same sort of euphoria that lifted spirits in Germany 2006.

For Switzerland, though, even such a boost to morale may be out of reach: in an poll by Swiss paper SonntagsZeitung, only 41 percent of people said they were interested in the event.

Editing by Clare Fallon