Games gambit grips Greece
(China Daily)
Updated: 2004-07-30 06:14

Officials hope next month's Athens Olympics will attract scores of foreign tourists and investors to Greece in the coming years, helping the country recoup its sizeable investment in the Games.

"The Games are about putting Greece in the mind of the world," said Greek Deputy Finance Minister Petros Doukas, a former investment banker with US credit giant Citibank.

But such hopes have failed to materialize so far, while Olympics-related expenditure has tarnished the country's recent, hard-won reputation for fiscal rectitude.

The Greek economy has put nearly eight billion euros (US$10 billion) - more than 5 per cent of the country's annual gross domestic product (GDP) - into the August 13-29 Games.

More than six billion euros of taxpayer money were spent by the government on new stadia, roads and security for Games' visitors.

Private firms are estimated to have forked out another 1.5 billion euros, as businessmen, particularly in services, spruced up their enterprises - from overhauling hotels to rejuvenating the Greek capital's cranky taxi fleet.

"We estimate that a successful Olympic Games will attract an additional 450,000 tourists by 2011.

"This in itself can add 1.1 billion dollars, or 0.6 per cent of GDP a year to the Greek economy," said Fanny Palli-Petralia, Greece's Deputy Culture Minister, who is in charge of the Olympics.

Tourism accounts for around 15 per cent of Greek GDP.

More than 10 million tourists visit the country each year, but an unwholesome mix of stagnating European economies, terrorism fears and Olympics-related construction delays that spoiled the country's image smashed Greeks' dream of busy pre-Olympic tourist flows.

"(Commercial) exploitation of the pre-Olympic period was lost... it is our duty to exploit post-Olympic opportunities," Petralia said after figures showed 2004 tourist arrivals dropping by as much as 5 per cent compared with the previous year.

Frantic Olympics-related construction is estimated to have boosted Greece's GDP - currently at 4 per cent a year one of the Eurozone's highest - by around 0.2 points over each of the past three years, according to a study by the state-run Centre for Economic Plannning and Research.

But the end of the Games could signal the end of the boom.

Business confidence among Greece's hitherto pampered construction companies fell for the fourth month in a row in June, according to a survey by Greece's Foundation for Economic and Industrial Research (IOBE). IOBE's confidence index fell to 105.8 points - 35 per cent below its peak from March 2000.

And doubts are raised about the some 40 Olympic venues' financial sustainability.

"The new infrastructure could be a positive legacy, but it may be associated with a debt overhang that could take many years to pay off," accountancy firm PricewaterhouseCoopers said in a report.

After years of efforts to put Greece's finances on a sound footing in the run-up to Eurozone entry, Olympic-related payments caused the country's budget to go deep into the red again.

Greece's public deficit for 2003 breached Eurozone budget rules and the European Union formally put the Greek economy under surveillance.

Post-Olympic maintenance of the Games' nearly 40 venues could cost more than 100 million euros a year, according to a government-commissioned study by the university of Thessaly.

Greece is the first Olympic host since the communist-run 1980 Moscow Games to finance the Games entirely out of state funds.

"Personally speaking, I would definitely have involved the private sector in preparations through public-private partnerships," said Doukas, criticizing Greece's previous socialist government which lost office in Greece's March 7 general election.

The country's new conservative government hopes to arrange with businessmen long-term leases and equity sales in the venues after the Olympics.

Apart from the business volume to be created by visitors during the Games, estimated by KEPE at around US$7 billion, Doukas said that the Games will benefit Greece's private sector in the long run.

"Greek firms have acquired the capacity to finish big projects," he said.

But only a few construction companies have so far translated this new-found experience in new contracts won abroad. Instead they apparently prefer to invest in new sectors, mainly energy and property development.

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