Bored of euro crisis, economists bet on Euro 2012

BERLIN – Tired of the constant barrage of depressing headlines from the eurozone debt crisis, German economists have turned their skills to the rather more fun task of forecasting the European Championships.

Using a variety of tongue-in-cheek models usually applied to complex questions of bond markets or credit default swaps, most analysts have ended up with far from earth-shattering tips, backing favorites Spain or Germany.

The good news for people concerned for the future of the euro area is that the chances of a team from the 17-nation zone lifting Europe’s premier football trophy is a whopping 86 percent, according to economists at DekaBank.

Analyzing the results of the past four European Championships and feeding it into a complex mathematical model, the economists came up with the prediction: “Along with Spain and the Netherlands, Germany is one of the favorites.”

In a research note entitled “Soccernomics”, boffins at ABN Amro said their work was done with a “quasi-serious approach.”

“Because after all, football is the most important of all unimportant things. We certainly need some light relief these days. Europe – in particular the Eurozone – has been engulfed in a crisis for two years now,” they added.

ABN Amro cross-checked a country’s footballing record with its credit rating and concluded that Germany would be triumphant come the final of Europe’s top footballing competition on July 1.

For the eurozone as a whole, however, the research note concludes: “From an economic perspective, the best outcome would be a French victory” as it would boost confidence in one of the shakiest “core” eurozone nations.

Economists at UniCredit really went to town, feeding in macroeconomic data to complex mathematical models in a bid to predict the winner.

They calculated the worth of each individual team based on the transfer market value of their players and decided that the two semi-finals would be “genuine classics” pitting traditional rivals against each other.

“Portugal (338 million euros) against Spain (658 million euros) and Germany (459 million euros) against England (392 million euros)” was the final prediction.

— There’s only one Paul the Octopus —

Economists at the DIW institute in Germany spent their time analysing the market value of 382 football clubs from 25 European football leagues and cross-referencing the players’ worth with their end-of-season success measured in league points won.

Their model also pointed to a Spanish victory, but they thought Germany also had a good chance of winning.

They acknowledged that: “In a tournament format which is played out in small groups and a knockout-basis, luck plays a major role.”

“This means that there is a significant risk that the German team will not make the quarter-finals” as they are in the same pool as top teams Portugal and the Netherlands, inevitably dubbed the “Group of Death.”

ABN Amro noted that the past four major football tournaments have been won by countries now suffering economically. Euro 2004 was won by Greece, the World Cup in 2006 by Italy, while Spain won Euro 2008 and the World Cup in 2010.

“Do sportspeople from countries that are struggling economically develop a winning mentality and do sportspeople from prosperous countries become lazier and less motivated?” asked the analysts.

DekaBank analysts said they were looking to the Championships for a bit of light relief in the dark economic times.

“In these times of euro crisis, Euro 2012 can distract us for a couple of weeks, make us forget our worries and bring countries together a bit,” they said.

And the UniCredit analysts tipped their hats to the doyen of tipsters, Paul the Octopus, who sensationally “predicted” correctly all seven of Germany’s games in the 2010 World Cup, plus the result of the final.

“More seriously, a good alternative to believing in a magic octopus is asking football experts across European countries,” sniffed the economists.