Analysis: Victory gives golden glow to the ‘Made in Germany’ brandComment on this story
Frankfurt - As Germany captain Philipp Lahm raised the World Cup in Rio de Janeiro’s Maracanã stadium for his country’s fourth championship title, he and each of his team-mates were e300 000 (R4.4 million) richer.
The reward from Germany’s DFB football association for bringing the prize to Berlin is a small price to pay compared with the fillip the German economy may get as the victory draws shoppers to the “Made in Germany” brand, according to research institute Prognos.
“Made in Germany definitely appreciates in value with success,” Christian Boellhoff, the managing director of Prognos in Berlin, said. “It has a strengthening influence on German exports.”
Germany, Europe’s biggest economy, is the world’s largest exporter after China and the US. Consignments from Mercedes-Benz vehicles to Adidas sporting apparel and Siemens power plant technology drove the sale of German goods and services abroad to e1.09 trillion last year, about e2 billion shy of the record set in 2012, according to data supplied by the Federal Statistics Office.
Adidas, as the official sponsor of Germany and its contender, Argentina, had a head start going into Sunday’s duel as “the most visible brand” in the final, chief executive Herbert Hainer said last week.
The bout ended 1-0 in Germany’s favour, crowning Joachim Loew’s eight-year reign as the national coach. Substitute Mario Goetze scored in the 113th minute, allowing the Germans to avoid a penalty shoot-out.
“Psychologically, it has a positive effect on self-confidence,” Boellhoff said.
“While you can’t calculate this in detail, it can have a positive influence on work motivation and confidence in producing quality.”
World Cup victories have coincided with periods of economic prosperity in Germany in the past. The 1954 defeat of Hungary in Bern marked the start of the country’s post-war political and economic recovery, boosting the morale of a defeated nation.
The 1974 winner’s medal came at the dawn of another economic resurgence, and the year before Germany became one of the founding nations of the Group of Six industrialised countries, which was later extended to include Canada and Russia.
The 1990 final in Rome, also against Argentina, came eight months after the Berlin Wall was torn down.
“It’s true that in the three years after 1990, the German economy grew very strongly, but the reason was reunification,” said Boellhoff, referring to the merger of East and West Germany in October 1990. “We have to differentiate between causality and correlation.”
Sunday night’s victory marks the first for a united Germany. No country has made it to more World Cup finals – eight – although Brazil holds the record for titles, with five to Germany’s four.
Regardless of the sporting success, the German economy was heading towards a period of renewed economic prosperity with the beckoning of the “golden 2020s”, Boellhoff said, citing a new report on Germany published by Prognos last week.
“Germany is the only country of the largest economies in Europe that is in a really strong situation right now,” he said.
“This can improve even more when its neighbours gradually emerge from the crisis, and this will happen in the next few years.”
German economic growth accelerated more than forecast in the first quarter, propelled by domestic demand and a construction boom.
Last month the Bundesbank raised its growth forecast for the economy, predicting gross domestic product (GDP) would increase by 1.9 percent this year, higher than the 1.7 percent it had predicted in May. It expects GDP to climb by 2 percent in 2015.
“Over the years, we have generated our growth largely through industry and exports,” Boellhoff said.
“This is now feeding into people’s incomes and that means private consumption is contributing more to growth than has been the case up to now. This will come to the fore in 2017 to 2018 and will continue until the end of the 2020s.” – Bloomberg