Paris has been in "Olympic Time" for a week now, presenting its answer sheet to the world after more than two years of "preparation" - from the highly artistic opening ceremony to the venues and Olympic Village constructed with the "sustainability" concept, and to the event service guarantee work.
As an international sports extravaganza attracting worldwide attention, the Olympic Games present an excellent opportunity for France and Paris to showcase their national image, demonstrate urban charm, and drive economic growth. Historically, many Olympic Games have injected robust momentum into the economic development of host countries, which has also drawn considerable attention to the "financial ledger" behind the Paris Olympics.
Will the "Olympic Effect" boost the French economy? Are the opportunities or challenges more significant for France brought by this Olympic Games? According to analyses, the Paris Olympics can boost the French economy to a certain extent, but for an economy of France's size, the "Olympic benefits" are hardly remarkable. The greater significance of the Paris Olympics lies in providing a revitalization opportunity for Macron's government, which has seen low popularity ratings, offering a chance for unity to the divided French political arena and society, and creating a calm space amidst regional conflicts.
·How much does the Paris Olympics cost?
According to estimates by the French Foundation for Administrative and Public Policy Research, the total cost of the Paris Olympics has now exceeded 11 billion euros, including approximately 9 billion euros in direct costs, far exceeding the budgeted figure of 6.6 billion euros in its 2017 Olympic bid document.
While there is no definitive conclusion on how much the Paris Olympics will ultimately cost, it is certain that France has been striving to balance its revenue and expenditure in pursuit of a frugal yet spectacular Olympic Games. Etienne Thobois, CEO of the Paris Organising Committee for the Olympic and Paralympic Games (COJOP), told the media in May, "Everyone is concerned about every penny spent, and we are very cautious, ensuring that every cent is well spent. Honestly, that in itself is a challenge."
However, this vision of "careful financial planning" seems difficult to achieve. Paris is the first city to fully implement the cost-cutting reforms introduced by the International Olympic Committee (IOC) in 2019. Compared to the three most expensive summer Olympics - London 2012, Rio 2016, and Tokyo 2020 - the Paris Olympics bill appears less staggering. But a survey released in May this year by researchers at Saïd Business School, University of Oxford, indicates that the estimated cost of the Paris Olympics is over US$1 billion higher than the historical median cost of the Olympics and 115% higher than Paris's initial estimate. "This is not as frugal an Olympics as imagined."
So, where exactly is the money being spent for the Paris Olympics?
The French economic research and consulting agency Asteres points out that the expenses of the Paris Olympics encompass organizational expenses, infrastructure expenses, and additional expenses. Organizational expenses, amounting to approximately 4.4 billion euros, are primarily controlled by COJOP and used for overseeing, supporting, and managing the organization of the events. Infrastructure expenses, also budgeted at 4.4 billion euros, cover the implementation of Olympic construction projects. The remaining 3 billion euros are allocated to additional expenses.
It is noteworthy that significant efforts have been made towards environmental protection at this Olympics. Tony Estanguet, President of COJOP, has pledged to the world to deliver the "greenest Olympics ever." To achieve emission reduction targets, COJOP has implemented a series of sustainable development plans during the preparation of the Olympics. Just to clean up the Seine River, where events like triathlons will be held, Paris has spent 1.4 billion euros.
·Whether a profit or a loss cannot be judged solely by the figures on the books.
Given such expenditures, can the economic benefits brought by the Paris Olympics help France "recover the costs"? Chen Hao, a researcher at the University of International Business and Economics' Institute of International Economic Research, told a reporter from the China Youth Daily and chinayouth.cn that the Paris Olympics will have a certain boosting effect on the French economy, both in terms of short-term direct benefits and long-term indirect benefits. In the short term, on the one hand, direct benefits such as broadcasting rights revenue, advertising sponsorship fees, and ticket sales will partially offset Olympic expenditures, which is also the primary way for previous Olympic host countries to cover cost gaps. On the other hand, hosting the Olympics will create many temporary jobs and stimulate consumption growth.
"Another significant source of revenue is tourism. With the hosting of the Olympics, France's tourism industry will also effectively recover," said Chen Hao. Compared to direct benefits, these indirect benefits have a relatively long-term stimulating effect on the economy.
A recent study by the University of Limoges in France indicates that the Olympics will bring a net benefit of 6.7 billion to 11.1 billion euros to the Paris region, with the range of variation primarily influenced by tourism. The French National Institute of Statistics and Economic Studies (INSEE) recently released a report predicting that the Paris Olympics will contribute 0.3 percentage points to France's economic growth in the third quarter, with ticket sales and broadcasting rights revenue being the main drivers of economic growth. However, the positive impact of the Paris Olympics on the French economy will dissipate by the end of this year. Throughout 2024, the "Olympic effect" will contribute only 0.1 percentage points to France's economic growth.
"Overall, the Olympic Games' contribution to the French economy is limited. For an economy of France's size, the revenue generated by the Olympics is unlikely to produce a significant boost," Chen Hao pointed out. From a revenue and expenditure perspective, most Olympic Games in history have been "loss-making," and given the current economic downturn in France, it is highly unlikely that direct revenue alone will cover the costs.
However, Chen Hao also noted that whether a profit or a loss cannot be judged solely by short-term economic figures. "From the perspective of overall social development, the Olympics still have a very positive effect. France has seized this opportunity to broaden international exchanges and make the world more aware of the host country and city, which will increase France's international trade and investment to a certain extent, and international exchanges will become more frequent and smooth. Overall, the Olympics are of great significance to the development of French society."
·Provide France with an opportunity for unity.
"The Olympics are the best way to convince the world to choose France. It will promote our landscapes, facilities, technology, and cuisine," French President Macron recently said.
The hosting of the Paris Olympics is undoubtedly a shot in the arm for French society, which has been in a sluggish state recently. Just shortly before the opening of the Olympics, France was plunged into "an unprecedented political crisis since the establishment of the Fifth French Republic half a century ago." On June 9th, local time, Macron's Renaissance Party suffered a crushing defeat in the European Parliament elections, with a vote share far lower than that of the far-right French political party "National Rally." Macron promptly announced the dissolution of the National Assembly and the advancement of the French parliamentary elections originally scheduled for 2027, causing turmoil in French politics.
Prior to the opening of the Olympics, Macron rejected the resignation of the incumbent Prime Minister Elisabeth Borne and asked her to temporarily continue in her post. He also rejected the nomination of a new Prime Minister put forward by the left-wing alliance, citing the need for a caretaker government to continue its duties during the Paris Olympics. Macron expressed his hope to form a new government as soon as possible, but emphasized that "before mid-August, we need to focus on hosting the Olympics successfully," as forming a new government during this period "would cause confusion."
Some analysts point out that Macron's decision not to appoint a new Prime Minister before the end of the Olympics is partly to maintain political stability during the Olympics and partly to buy time for the ruling party, increasing the probability of passing a new Prime Minister nominated by part of the left-wing. Macron himself has called for a "political truce" during the Olympics – not only for French politics but also in the hope that the Paris Olympics can fulfill its mission of promoting human peace and create a calm space amidst regional conflicts.
Regardless, the Olympics provide France with an opportunity for unity. French newspaper Le Monde wrote that at this moment, Macron hopes that the public will focus on their own athletes, and that the Paris Olympics should usher in an era where national pride overwhelms political disputes. At least for this period, this sporting event should bring reconciliation to a country plagued by both social and political divisions.
Quoted from: China Youth Daily
Link: https://mp.weixin.qq.com/s/YxP4QekWuEClG0Px0KMGOQ
