The PIGS that flew

Two of the biggest names in real estate - IVG and Jones Lang LaSalle - announced before the kick-off of the first match that they had employed their considerable powers of research and analysis to calculate who the likely Euro 2012 winners were going to be. They had done this by correlating the results in previous tournaments against the real estate data of those countries at that time. How well did they do? Not very, it would seem. IVG's analysis of "macrosoccer indicators" concluded that Germany would emerge as Euro 2012 champions, since they have "always entered the finals in two succeeding tournaments and afterwards paused for another two." In the final they were to meet and defeat Croatia, who had got this far in the tournament because "there were six different champions in the last six tournaments and six different countries in the last three finals, only one of them not from Southern Europe." The Croats would also be the losing finalists according to JLL, thanks to a combination of the Adriatic state's office returns, industrial capital value growth and prime office rents, but would ultimately be vanquished by the Portuguese. Of course, Croatia didn't even get past the group stage. JLL also predicted that Spain and Germany would fail to make it through to the knock-outs and that Russia would top their group, beating Holland in the quarter final. The only prediction that the consultancy got spot-on was England winning group D (based on retail returns) with France as runner-up; but it then rather blotted its copy book by forecasting that England would beat Italy in the next match.

This was, of course, all just meant to be a bit of fun - and so it's not surprising that these forecasts were rather wide of the mark. With the benefit of hindsight, however, is it actually possible to discern any relationship between a country's real estate market and its performance at Euro 2012? Three of the four teams that made it to the semis were PIGS, while Greece (even though it somehow managed to win the thing in 2004) nevertheless out-performed by getting to the quarter-finals. The relatively less credit-crunched nations of northern Europe fared less well. Denmark and Sweden failed to progress to the knock-out stage, along with Poland - the only EU country not to go into recession since the Lehman collapse. England under-performed as usual (question: if you always under-perform should it still be called under-performing?), while Holland couldn't win a single game. Although a semi-finalist, Germany will also feel that it fell short of its expectations, as its 16-year trophy drought continued despite having one of the most dashing teams. France, on the other hand, were simply passed to death by the Spanish. And Russia, with its booming real estate sector, failed to beware of Greeks and also flopped miserably.

Was this a case of PIGS biting the hand that bails them out? Greece-Germany was certainly built up in the media as a grudge match between the debt-crippled Hellenes and their Teutonic creditors. Spain with its half-built ghost towns, Greece with its boarded up high streets, Italy with its construction sector on its knees after it bunga-bunga partied itself into recession... how could they have turned around their fortunes so dramatically on the football pitch? Perhaps the most rational explanation is that the teams they have now are the products of better times, when the investment and the money was still flowing in. But as a life-long fan of Oldham Athletic, an English lower league club that always seems to be going bankrupt, I prefer a more romantic explanation. Football has always provided a wonderful escape from poverty and economic distress. These countries, which more than most were enriched and then impoverished by the real estate bubble in the last decade, have responded in the best way possible by putting their woes to one side and absorbing themselves in the excitement of the beautiful game. In fact, the triumphs they enjoyed were in spite of the market data, rather than because of it. Southern Europeans might not be so good when it comes to economic reality, but they still know how to inject a dose of fantasy when it's needed.