Costly Sporting: Greece's Post-Olympic Woes
Wood, Clement, Harvard International Review
To the surprise of much of the world, Greece overcame construction delays, a July blackout in Athens, weak ticket sales, and infamous sweltering summer temperatures to put on a fun and secure show at the 2004 Summer Olympics. But, as predicted by much of the world, the shiny aura of olive wreaths and medals has given way to the hazy, harsh reality of the small Mediterranean country's economic outlook; the government's estimate of the Games' cost, 8.95 billion euro (US$10.83 billion), puts them 4.35 billion euro (US$5.26 billion) over budget and makes the 2004 Olympic Games the most expensive in the 108-year history of the modern Olympics.
The record-setting price of the Games brings an uncertain future for indebted Greece, which sits near the bottom of the European Union's economic ladder. The small Mediterranean country's budget deficit for 2004 is projected at 5.3 percent of its gross domestic product, a figure which would place Greece well above the three percent maximum limit for EU members using the euro currency. Although richer and more developed EU states such as France also exceed the three percent ceiling, they do so to a lesser degree and to much less general consternation, given the much greater relative strength of their economies.
In its public statements about the Games' cost, the center-right New Democracy Party government of Prime Minister Kostas Karamanlis is predictably emphasizing the prestige accrued as justification for the money lost. "There were massive over-runs--this investment is big, but all Greeks should be proud [of the Games]," Finance Minister George Alogoskoufis said after a November meeting with Karamanlis.
Alogoskoufis also said that the 8.95 billion euro price tag did not include "the construction cost of projects completed or sped up to be ready in time for the Games," improvements like Athens' three-year old airport, a new ring road, and a tram line. This announcement came after the former socialist administration, which the New Democracy party defeated in elections last March, promised that the Olympics would not cost much more than 4.6 billion euro. The European Commission's December announcement that Greece had submitted inaccurate deficit data before joining the euro zone in 2001 has dealt another blow to the credibility of Greece's finances. …