Global Economics

Germany's Soccer Extravaganza


The World Cup tourney will pump a bonanza into the Continent's strongest economy—but the security challenges are daunting

After 32 years away, the World Cup has come back to Germany. Starting in Munich on June 9, the national teams of 32 separate countries will battle it out for the global soccer championship over the space of 64 matches. One long soccer-filled month later, the tournament will end on July 9 in Berlin's Olympiastadion, where the two finalists will play one last match in the hopes of earning the prized trophy.

The last time the World Cup came to Germany, it was 1974 and the country was split in two: the Federal Republic of Germany to the west, and the Communist Democratic Republic of Germany to the east. As a result, this summer's World Cup takes on increased significance; it's the first time Germany hosts an international sporting event of this magnitude as a unified nation.

In addition to its historical import, this World Cup could do wonders for the German economy, which is already on the upswing, breaking away as the clear leader in Continental Europe. (See "For Germany, a Cup of Plenty?") Thirty-one foreign teams will be competing, and with them they will bring a flood of foreign capital. Coca-Cola (KO), Nike (NKE), and Mastercard (MA) are just three of the major American companies spending heavily to make sure their names get seen in Germany this month. (see "Advertisers Kick It Up for the World Cup") The amount of global exposure offered by this event attracts a rush of advertising dollars, which can only spell growth to a quickly strengthening economy.

TOURIST DOLLARS.

Foreign money also will arrive in the form of foreign people. Within the next few days, Germany will fill up with folks from all over the globe: soccer fans, sports journalists, and people just looking for a month-long party. This temporary population influx promises an immense boost to the service and tourist industries of all 12 of the host cities (see BusinessWeek.com, "Cities and Stadiums of the 2006 World Cup"). German officials are clearly looking for a return on the massive infrastructure investments they've made in anticipation of the games—including upwards of $1.8 billion on stadiums alone.

This investment underlines the fact that hosting the World Cup implies a certain amount of risk—and not all of it financial. In 1998, when the tourney took place in France, Belgian authorities thwarted a potential attack by Algerian militants. So the U.S. State Dept. is not without precedent in warning about the potential for an Al Qaeda attack. To minimize the possibility of a terrorist strike, the World Cup organizers and the German government have taken extensive security measures, deploying selective border checks, a fleet of NATO surveillance aircraft, a special international World Cup security and intelligence task force, and a special 24-hour security detail for "at-risk" teams such as England and the U.S.

STOP SCALPING.

A less frightening, but no less real, threat is that of soccer hooligans: fans who use sporting events as an excuse to engage in violent behavior. To prevent hooliganism, organizers are using a new system requiring that each ticket be registered in the name of the ticketholder, who must then present I.D. upon his/her arrival at the game. This measure prevents known troublemakers from gaining access to the stadiums—and also should stop ticket scalping dead in its tracks. Outside the stadiums, there will be an increased police presence, as well as a streamlined justice system, which will potentially process, try, and jail offenders within hours of their apprehension.

As overwhelming as all of these security measures may seem, the hosts of the Cup are making an equal effort to insure that precautions don't put a damper on the fun. Visitors to Germany this month will find a vibrant party atmosphere, and each of the host cities has something different to offer. No matter where you go, however, you'll find an abundance of fine German beer and sausage. And, of course, the world's best football.

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Jacobs is an intern in BusinessWeek's Paris bureau .

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