Could Winning the World Cup Revive Spanish Economy?
The state of the Spanish economy, in particular the country’s real estate market, has been in poor condition since the Eurozone crash in 2008. With things looking like they may be about to pick up in the country, could a Spanish Football World Cup victory provide the boost needed to turn around the country’s fortunes?
The FIFA World Cup, arguably the most prestigious sporting competition in the world, kicks off this evening in Sao Paolo, with hosts Brazil, playing Croatia in the first match of the tournament. There has been much anticipation for this year’s World Cup in the four years since the tournament was last hosted in South Africa. Many see the return of the game’s biggest competition to it’s spiritual home Brazil, as a sign that the tournament will be won by a South American team, however, as reigning champions after beating Netherlands 1-0 after extra time in the 2010 competition, Spain are still amongst the favourites to be crowned world champions once more.
Every four years, experts from Goldman Sachs analyse massive amounts of historical statistics and data, to make predictions about the economic impact of football’s international showpiece.
“There is no doubt that the World Cup captures huge attention and with it, generates a massive amount of passion. But does it have any impact on stock markets?” the analysts queried.
The Goldman Sachs report, entitled “The World Cup and Economics 2014,” suggests that a World Cup victory has knock on effects that benefit a country’s market for months after the tournament, while the runner-up experiences a slump in their economy.
“There is a clear pattern of outperformance by the winning team in the weeks after the World Cup final,” the report stated, citing an average advantage of more than 3.5 per cent over other countries and the global equity market.
Just a month after Brazil’s victory at the U.S hosted tournament in 1994, the Brazilian stock market outperformed the MSCI World Index by 21 per cent, jumping up to 38 per cent just 3 months later. Meanwhile, 78 per cent of runners up witnessed an underperformance following the World Cup, with an average drop of 5.6 per cent over three months.
Can They Win?
So, do Spain have the ability to win the World Cup and secure a much needed economic boost? Do they have the players to beat Brazil on their home turf? The answer is a resounding yes.
Out of Spain manager Vicente del Bosque’s 23-man squad, only one player – Napoli defender Raul Albiol – does not play for one of the top 10 club teams in the world, with the rest of the teams players plying their trade for footballing giants Barcelona, Real Madrid, Manchester United, Bayern Munich, Chelsea, Manchester City, Liverpool and current Spanish champions Atletico Madrid.
The position in which Spain were weakest at the last World Cup was up front, with striker Fernando Torres experiencing a poor run of form. However, with the inclusion of Atletico Madrid star Diego Costa who netted an impressive 36 goals in all competitions this year, Spain are arguably a better team this year than they were last time around.
Brazil’s tropical climate, which has caused concerns for many European countries will not be an issue for Spain, whose players are traditionally used to playing in countries with warmer weather.
Of course, there will be difficulties, when the World Cup has previously been hosted on South American soil, it has never been won by a team from a different continent, but if anyone can do it, Spain’s combination of experience, talent and youthful exuberance may just see them retain their title, and earn their country the boost needed to turn the corner in what has been a difficult economic decade for the mediterranean country.
Author Bio: Bradley Shore is an experienced travel and investment blogger, he likes to write about travel and different investment opportunities, you can see examples of his enthusiastic writing style in his latest work for Alta Vista Property.