By Jeremy Merkel
For many Americans, neither the European debt crisis nor soccer are of serious concern. Yet in the midst of Europe’s greatest economic meltdown in recent history, the 2012 Euro Cup has been underway, and Americans have been following the tournament more closely than ever. Of the 29 matches played so far, 1.14 million viewers have tuned in to ESPN, a 63% jump since 2008. Watching the same countries who are scrambling for financial security challenge each other for soccer supremacy is something we seem to enjoy; with only four teams remaining, here is everything you need to need to know about the semi finalist nations – on and off the field.
On the field the defending champions have a bright future led by an endless supply of young, promising players. Off the field the outlook is more bleak. Spain is struggling with unsustainable levels of debt, and no bailout program has been put in place. Rumors have circulated around the E.U. that the Spanish must start being more careful with their economy, or risk being booted from the Euro zone. Playing it safe it not something the Spaniards are familiar with these days – all but one of their games have been decided by one goal or less, with the exception being a 4-0 rout of the Irish. Yesterday they narrowly escaped Portugal in a penalty shootout, and hope to stretch their luck into the finals on Sunday. The words of Spanish Prime Minister Mariano Rajoy sum up the situation of both the country and the soccer team: “We can’t finance ourselves at current prices for too long…it will be worse if we don’t send a clear message that we’re taking this matter seriously.”
The country with the third largest economy in Europe is a perennial powerhouse when it comes to soccer. When it comes to the economy, experts consider Italy too big too fail. Yet while their budget deficit is relatively small compared to other EU nations, their debt is equal to nearly 120% of GDP. Like Spain, the 2006 World Champions have needed some luck to make it this far. They barely snuck past England on penalty kicks, and they face a formidable opponent in Germany for their next match. But passing through to the next round of the tournament may be the least of Italy’s problem, for its decade long economic slump is not expected to end anytime soon. Prime Minister Mario Monti has implemented a series of austerity measures aimed at reducing debt, but investors and EU officials remain skeptical that these will yield satisfactory results. At the receiving end of Italy’s pleas is German Chancellor Angela Merkel, who angrily rejected Italy’s petition for debt sharing Tuesday at a summit in Brussels. Italy fans must be praying that the German team does not mirror the intensity of their leader on the field.
The small Iberian nation is experiencing some of the greatest financial struggles of any European nation. With one of the highest unemployment rates in the Euro zone at 13.6%, many investors have admonished that Portugal may follow a similar path as Greece, and request a second bailout from the E.U. Many doubts also surrounded the national team heading into the Euro Cup. Placed in the ‘Group of Death’ along with Germany, the Netherlands, and Denmark, few expected the Portugal to advance very far. Just as they successfully silenced their critics by reaching the semi finals, Portuguese officials have taken great steps to cut the country’s insurmountable debt. Finance Minister Vitor Gaspar has reduced the government’s budget by more than one-third since taking office last summer, and predicts that once budget reforms take hold, the country’s economy will grow by 2% from 2014 onward. Optimism seems to abound for the underdog on and off the field.
Europe’s economic leader has looked very strong throughout the tournament. Led by a solid mix of young players and established veterans, they steamrolled through the group stage, and showed no mercy against Greece in the quarterfinals, handing them a 4-2 defeat. Sound familiar? Germany has been a major contributor of aid to poorer nations such as Greece, but as the debt crisis looms on, Chancellor Angela Merkel has been forced to be increasingly frugal. Her reluctance to provide assistance was recently put on display at the summit of the ‘Big Four’ in Rome, where she stated, “Each country wants to help but if I am going to call on taxpayers in Germany, I must have guarantees that all is under control. Responsibility and control go hand in hand.” With historic lows in unemployment, and a team that is favorites to hoist the trophy on Sunday, Germany is an example on the European stage. All they must do now is display the same poise they have shown thus far – both on and off the field – and Mrs. Merkel will continue to have something to cheer about.
While we are not advocating that you become a soccer fan (although there is nothing more exhilarating than a penalty shootout), the European debt crisis is definitely something worth educating yourself on. A VOTIFI poll indicates that many Americans already follow the unfolding disaster. When we asked how concerned are you that the European financial crisis will damage the US economy, 39% reported they were very concerned, with 48% somewhat concerned. While the country to lift the Henri Delaunay Trophy on Sunday may have no bearing on American sports, when it comes to the economy, the US needs to issue Europe a yellow card – caution.