Argentina vs. Germany: A Tale of Two Worlds Colliding

Posted: Jul 10 2014

Sports are one of the few things that can, nearly universally, impact and effect people and places around the world. Whether it’s the 2013 Boston Red Sox, whose World Series run united the city and helped breathe life back into it after the tragic Marathon bombings, or the New York Yankees, who, during the Fall of 2001, was America’s team, reaching the World Series only to lose to the Diamondbacks.

Even so, it’s almost unimaginable that a sport can evoke emotions so strong as to prompt a country, in the midst of a civil war, to end fighting and unite. Yet, despite it being difficult to believe, one sport, futbol (a.k.a. soccer in the United States) can claim to have done so.

Yes, that’s correct. Futbol can be credited in a big way for bringing the First Civil War in the Ivory Coast to an end and in 2006, citizens who months earlier had been shooting at each other sat side by side, cheering their home country’s team in the 2006 World Cup.

It is with this reminder of the power of futbol in mind that we’ll examine the economies and political climates in Germany and Argentina, the final two teams vying for the World Cup championship. And we’ll do so with an aim, an aim that will be realized on Friday, when we discuss which nation most needs a win and why.

Argentina

Argentina is in quite the predicament from a political and economic standpoint. After years of macroeconomic mismanagement, the country is suffering from a combination of elevated inflation and declining economic activity amid a swift deterioration in its external accounts.

After growing by 3% in 2013, the economy is currently stagnating. Furthermore, several economic indicators point to a recessionary environment and inflation in Argentina has peaked accelerated towards a recent peak of ~40%.

Add to these conditions a disappearing trade surplus, which has now fallen below 2001 economic crisis levels, and it becomes very clear: Argentina’s primary strength is its team, not its economy.

Germany

Compared with its futbol team, the German economy looks tame. The economy has held strong despite recent Eurozone economic troubles and expectations of future economic growth hover around 2% for both this year and next. Furthermore, German growth is also more balanced than before the crisis, when the economy was mainly dependent on exports and foreign demand.

However, like its defensive unit, the German economy previously suffered from a weakness. A weakness in private consumption. This weakness however, a symptom of less than desirable household incomes, were reflected in declining employment rates and wage restraint over much of the pre-crisis period. In addition, there was a rising tax burden weighed on the level of household income.

However, since the start of the crisis, household incomes have grown more forcefully, helping to fuel private consumption growth. Investment spending has also picked up meaningfully recently.

Nonetheless, like the German national team, the German economy has undergone a profound reform process, under Chancellor Schröder. But while Jogi Löw appears fully aware of the weaknesses of his team, the same cannot be said of the current German government as government leaders shows little indication of wanting to address the economic challenges ahead.

In fact, government leaders may even be doing the economy hard with policies such as the planned lowering of the retirement age for certain workers. Depending on how many workers take advantage of this new measure, it could lead to a significant decline in skilled workers at a time when many companies already find it difficult to hire skilled workers.

Both countries play very different styles of futbol and have widely varied economies. Yet, their two worlds will collide on Sunday and for roughly 2 hours, all of their troubles will be put aside as the citizens of each country stand united, as Argentineans and Germans. Nothing more, nothing less.

More Posts

Comments

Leave a comment

All blog comments are checked prior to publishing

Proudly Made In The USA and Italy

Sign up to receive newsletters that you will want to read.

SEARCH THIS STORE