Qatari investment in Spain may help to combat World Cup opposition

14 July 2015

Sheikh Hamad’s €1bn investment comes amid a Spanish legal attack on the 2022 World Cup

On 13 July Spain’s biggest retailer, El Corte Ingles, announced that former Qatari prime minister, Sheikh Hamad bin Jassim bin Jabr al-Thani, had bought a 10 per cent stake in the company in a deal worth €1bn ($1.1bn).

The deal has been interpreted in some quarters as a risky bet on Spain overcoming the challenges that have dogged its economy since the 2007-8 global financial crisis.

However, the large Qatari investment in one of Spain’s largest employers may well bring more benefits than just simple financial gains.

The billion-euro injection from a senior member of Qatar’s ruling family is likely to help increase Qatari influence within Spain and could even temper opposition to Qatar hosting the World Cup in 2022.

Sheikh Hamad’s investment comes two weeks after it was revealed that that the Spanish football league (LFP) is mounting a legal challenge to the Qatar hosting the 2022 Fifa World Cup.

The Spanish league says that holding the tournament during Qatar’s winter will cost it an estimated $72m.

The use of foreign direct investment (FDI) as a foreign policy tool to increase influence in European countries has long been a tactic employed by Qatar.

Using investment vehicles such as the Qatar Investment Authority it has made multi-billion dollar investments in companies that include the UK-based bank Barclays, the Canary Warf business district in London, and the department store Harrods.

The continuous flow of investment between Qatar and the UK has formed the basis of a strong political relationship that has weathered accusations of Qatari terror financing and labour rights abuses.

Qatar has also invested heavily in Germany-based Volkswagen, Europe’s largest carmaker, as well as awarding significant construction contracts to German companies operating in Qatar.

France too has benefitted from Qatari investment, with Qatari entities taking stakes in French companies including the media company Lagardere Unlimited, the oil company Total, the luxury conglomerate LVMH, France Telecom, the Champs-Elysees retail complex and the media company Vivendi.

On top of all this, 2011 Qatar Sports Investments bought the struggling football club Paris Saint Germain, funnelling money into the organisation and transforming it into one of Europe’s top clubs.

Earlier this month Fifa president Sepp Blatter said that Qatar’s strong economic ties with France and Germany led to political pressures that influenced the 2022 World Cup award.

Speaking to the German weekly newspaper Welt am Sonntag he said there were political interventions motivated by economic interests from the former French president Nicolas Sarkozy and former German president Christian Wulff.

While Sepp Blatter is currently at the heart of ongoing investigations into Fifa corruption and has significant motivation to deflect accusations of corruption away from himself – speculation about economic and political influence on the French and German world cup votes existed long before Blatter’s statements to the press.

While Michel Platini, the French president of Europe’s football association Uefa, denies that former French President Nicholas Sarkozy asked him outright to vote for Qatar to host the 2022 World Cup he admitted to the Spanish football magazine Don Balon that the president said it would be “a good thing if [he] did”.

Whether the new Qatari investment in El Corte Ingles will have a direct impact on Spanish opposition to Qatar hosting the 2022 World Cup remains to be seen.

However, increased Qatari involvement in companies that are of significant importance to the wider Spanish economy is almost certain to make Spanish political figures more wary about upsetting the Qatari royal family.

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