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After Paris Attacks, Waiting for the Champs-Élysées to Come Back to Life After Paris Attacks, Waiting for Shopping and Culture to Come Back to Life
(about 4 hours later)
PARIS — The Christmas market and festive lights had just gone up on the Avenue des Champs-Élysées with merchants hoping for a strong retail season, when the weekend’s brutal terrorist attacks cast a pall on the city. PARIS — The Christmas market and festive lights had just gone up on the Avenue des Champs-Élysées, with merchants hoping for a strong retail season, when the weekend’s brutal terrorist attacks cast a pall on Paris.
Though holiday shopping might seem a minor consideration compared with the loss of life, activity in the coming days on the French capital’s most famous shopping street could be an indicator of whether the attacks have dealt a blow to the city’s commerce and the country’s effort to achieve a sustained economic recovery.Though holiday shopping might seem a minor consideration compared with the loss of life, activity in the coming days on the French capital’s most famous shopping street could be an indicator of whether the attacks have dealt a blow to the city’s commerce and the country’s effort to achieve a sustained economic recovery.
The attacks have chilled consumer spending in the capital, essentially shutting down much of the city’s retail business for most of the weekend. The Eiffel Tower has been closed “until further notice,’’ according to its website. Disneyland Paris remained closed, not set to reopen until Wednesday. And as European leaders, along with President Obama, have identified the threat from the Islamic State group as broader than a French risk, there is concern of a wider economic impact if fear keeps people from wanting to travel or to gather in holiday crowds.
European stock markets opened lower on Monday, led down by the main French index, the CAC 40 in Paris, which was off a bit more than 1 percent at the open. But by late morning, the European indexes were all flat or in slightly positive territory. At least in the short term, the attacks have chilled consumer spending in the French capital, essentially shutting down much of the city’s retail business for most of the weekend. The Eiffel Tower has been closed “until further notice,’’ according to its website. Disneyland Paris remained closed and was not set to reopen until Wednesday. Both the Louvre and the Musée d’Orsay reopened to the public on Monday after being closed for two days because of security measures.
French companies catering to travel and tourism were taking a harder hit, though. Shares of Air France-KLM were down more than 5 percent through late morning, and the French hotel group Accor’s stock was also off by about 5 percent. Several concerts due to take place in Paris were canceled in the wake of terrorists’ storming the Bataclan concert hall and slaughtering 89 people who were listening to a rock band. Performances by the bands Marilyn Manson and Papa Roach scheduled for Monday night were called off, and the musician Prince suspended his planned European tour and a Paris concert in December. Producers have also temporarily halted performances of a French comedy musical, “Résiste.”
How lasting the effect will be on the Paris economy, once the initial shock has faded, is difficult to predict. Terrorist attacks in other major cities have had only fleeting effects on local economies. If the French authorities can head off further attacks and restore a sense of confidence before the holiday shopping season is over, there may be no reason to think that Paris will be different. On Monday, the French culture minister, Fleur Pellerin, announced plans for a special government fund to help theaters cope with financial losses stemming from the impact of the terrorist attacks and the costs of increased security.
“When we look at the figures after the Sept. 11 attacks in the U.S., or the attacks in Madrid or London, we see there is no major impact on economic activity,” said Philippe Waechter, research director at Natixis Asset Management. “So probably we’ll see the same in France.” “Everything will be done so that music remains alive in our country,” Ms. Pellerin said. “Culture is our greatest shield, and our artists are our best weapon.”
“Maybe in the first few weeks, when you go to shopping malls and things like that, maybe we’ll find that people are a little shy,” he said. “But after that, people will go through a sort of normalization.” Although European stock markets opened lower on Monday, led down by the main French index, the CAC 40 in Paris, by late afternoon, the European indexes were all flat or in slightly positive territory.
And yet, because this is also the start of what is traditionally a significant holiday and winter tourist season for Paris and other parts of France, much will depend not only on local psychology but also on the willingness of foreign visitors to set worries aside. French companies catering to travel and tourism were taking a hit, though. Shares of Air France-KLM were down more than 6 percent through the late afternoon, and the French group AccorHotel’s stock was off by more than 5 percent.
Tourism represents about 8 percent of the French economy. If fear of additional attacks keeps foreign visitors away and makes households reluctant to spend, those sectors and the tens of thousands of jobs related to them will suffer the consequences. How lasting the effect will be on the Paris economy or beyond, once the initial shock has faded, is difficult to predict. Typically, economists say, the commercial impact of terrorist attacks tends to be small and temporary. That was the case after attacks in Madrid in 2004, in London in 2005 and even the 9/11 attacks in New York, Jörg Krämer, chief economist at Commerzbank in Frankfurt, said in a note to clients on Monday.
The economic stakes are high for all of Europe, many parts of which had lately shown new signs of growth and a whittling away of the region’s high unemployment. The influx of more than a million migrants and refugees this year from Syria and other war-torn countries was creating political strains even before reports that at least one of the attackers in Paris had slipped into Europe through Greece, as part of that mass migration. “As for France, it is certainly too early for a final analysis,” Mr. Krämer wrote. “It is likely, however, that the terrorists will also fail to bring economic life to its knees.”
On Friday, only hours before the attacks, new data from the European Union showed that the French economy in the third quarter had broken out of its stagnation, helping to keep alive the eurozone’s modest recovery. France’s economy accelerated sharply from the second quarter, growing at an annualized 1.4 percent pace — even faster than Germany’s 1.3 percent. And yet, because this is also the start of what is traditionally a significant holiday and winter tourist season for Paris and other parts of France and Europe, much will depend not only on local psychology but also on the willingness of foreign visitors to set worries aside.
Paris is particularly crucial to the French economy. The area that includes the city, a region known as the Île-de-France, generates nearly one-third of the country’s gross domestic product of 2.14 trillion euros, or $2.3 trillion. On Monday, the Regional Tourism Committee for Paris announced a plan to convene a special conference on Wednesday to assess the potential economic impact with representatives from museums, deluxe hotels, amusement parks and department stores.
Mr. Waechter, the analyst, said that if there were an extended period of weaker consumer spending in the wake of the attacks, it could have a broader impact by prompting companies to delay new investments, which could create a drag on the economic recovery in 2016. Tourism represents about 8 percent of the French economy. If fear of additional attacks keeps foreign visitors away and makes households reluctant to spend, those sectors and the tens of thousands of jobs related to them will suffer.
And the Paris attacks come at an already bad time for the eurozone economy, which has been plagued for years by slow growth and high unemployment.
On Monday, the European Union’s statistics agency said that the annual rate of inflation in the eurozone in October was 0.1 percent, a sign of a weak economy — even if the number was higher than in September, when consumer prices fell at an annual rate of 0.1 percent.
In terms of growth, the eurozone economy expanded at a meager annual rate of 1.2 percent during the third quarter, and total economic output is still lower than it was in 2007, before the beginning of the financial crisis.
Expectations that the European Central Bank would step up its stimulus to the eurozone economy when it meets next month, already high, have been further solidified by the Paris attacks.
“It compounds all the problems that we were already facing,” Vitor Constâncio, vice president of the European Central Bank, said on Monday after a speech in Frankfurt. The attacks could have a psychological effect, he said, adding that that would depend on any further consequences.
Paris is particularly crucial to the French economy. The area that includes the city, a region known as the Île-de-France, generates nearly one-third of the country’s gross domestic product of 2.14 trillion euros, or about $2.3 trillion.
Philippe Waechter, research director at Natixis Asset Management, said that if there were an extended period of weaker consumer spending in the wake of the attacks, it could prompt companies to delay new investments, creating a further drag on the economic recovery.
It might be too much to expect François Hollande, the French president, to mimic former President George W. Bush, who after the Sept. 11, 2001, attacks on the United States famously called on Americans to “go out shopping more.” But Mr. Waechter predicted that Parisians, who have been living with the risk of terrorist attacks since at least the 1980s, would prove as resilient as New Yorkers.It might be too much to expect François Hollande, the French president, to mimic former President George W. Bush, who after the Sept. 11, 2001, attacks on the United States famously called on Americans to “go out shopping more.” But Mr. Waechter predicted that Parisians, who have been living with the risk of terrorist attacks since at least the 1980s, would prove as resilient as New Yorkers.
Paris has now been hit by two murderous rampages this year. The first series of attacks was in January, with the assault on the satirical newspaper Charlie Hebdo, which had mocked Islam along with most other religions; the killing of a police officer in a Paris suburb, and an assault on a Jewish kosher supermarket. Vicious and hate-fueled as those attacks were, killing 17 people, they might nonetheless have left many Parisians feeling that they were not targets themselves. And yet, Paris has now been hit by two murderous rampages this year. The first was a series of attacks in January, with the assault on the satirical newspaper Charlie Hebdo, which had mocked Islam along with most other religions; the killing of a police officer in a Paris suburb; and an assault on a Jewish kosher supermarket. Vicious and hate-fueled as those assaults were, with attackers killing 17 people, they might nonetheless have left many Parisians feeling that they were not targets.
This past weekend’s attacks, though, killing at least 129, seemed aimed at making no one feel safe anywhere — at a sporting event, at a rock concert, at a cafe or restaurant. That factor could make the near-term consumer psychology harder to predict. This past weekend’s attacks, though, killing at least 129, seemed aimed at making no one feel safe anywhere — at a sporting event, at a rock concert, at a cafe or restaurant. That factor could make the near-term consumer psychology harder to predict — not only in Paris but across Europe.
“The communications of the government will be very important,” Mr. Waechter said. “The risk is that the Christmas shopping season will be more depressed and subdued,” said Carsten Brzeski, the chief economist for Germany and Austria at ING-DiBa bank in Frankfurt. “People will be more cautious when they go to crowded places.”
“But I’m not pessimistic,” he added. “Maybe for one month the economy will be a little weaker, but not more.” One barometer may be the outdoor Christmas markets, a tradition in France, Germany and several other European countries, that had already begun opening in Paris and elsewhere. Christmas markets in German cities like Nuremberg and Dresden, which have two of the oldest, attract huge crowds to drink mulled wine or browse among stands selling items like wooden tree ornaments or handmade mittens.
The markets have been threatened by terrorists in the past but still drew crowds, said Werner Hammerschmidt, executive director of the Bundesverband Deutscher Schausteller und Marktkaufleute, a group that represents businesses that sell food and gifts at Christmas markets.
“There have been threats for years,” Mr. Hammerschmidt said. “People have shown they won’t let their lives be influenced by terrorists. I suspect that will be the case this time.”
At least one French celebrity, the singer Shy’m, insisted this week that the show must go on. She has concerts scheduled for Tuesday and Wednesday nights in Paris, at the AccorHotels Arena, an indoor sports venue and concert hall. The area is in the 12th arrondissement, not far from where at least five of Friday night’s attacks took place and where the Charlie Hebdo massacre occurred in January.
“After much reflection, doubts and fears, I decided to go on stage,” she wrote in a posting on her Facebook page on Sunday evening. “What has happened to France and humanity is unspeakable but it is out of the question to hole up and stay silent.”
“This,” she added, “is the resistance.”