Greek Fiscal Crisis and the Olympics

http://www.futureofcapitalism.com/2010/02/greek-fiscal-crisis-and-the-olympics

There's been no shortage of explanations offered here for the pressure on Portugal, Ireland, Greece, and Spain -- "PIGS", from the lack of Jews in those countries to the arrogance of the elites to a bear raid. A reader e-mails to suggest one explanation I haven't yet seen much attention paid to; the hangover from the 2004 Olympics in Athens. It's an explanation you'd think we might be hearing more about given that there are Olympic Games underway right now in Vancouver. The economic trouble facing Greece is something worth considering for anyone who thinks that infrastructure investment is the answer to America's economic problems. It's actually almost painful now to go back and read some of the journalism that was committed over these issues. Here's the Christian Science Monitor in a July 2008 dispatch from Athens. "Citizens question the event's $15 billion price tag – most of it paid for by the state," the Monitor reported, dwelling on empty sports arenas. But it concluded with positive spin from Kostas Kartalis, former head of Hellenic Olympic Properties, the state-run company responsible for the Olympic venues:

the Olympics did leave a positive legacy for Athens, especially in the city's center.

Once notorious for its traffic and chaos, the historic heart of the city near the Acropolis was cleaned up with the creation of pedestrian walkways that link many of the city's ancient sites. The walkways had been planned for more than 150 years, but it took the Olympics to make it reality.

Athens also got a new airport and a new metro, finished on the eve of the Olympics, which now carries more than 600,000 passengers a day.

"I believe that the overall legacy for the city of Athens because of the Games of 2004 is positive," says Kartalis. "The tourist industry has been enjoying an increase year. The infrastructure is much better."

That new airport and subway and those pedestrian walkways can't be much comfort now that the country is dragging down essentially the whole world's financial markets while frantically trying to come up with more tax revenue.

Here's a Washington Post columnist in August 2004 opining that the cost of the Athens Games doesn't matter to Americans: "So while the enormous cost, now estimated at $9 billion, and the emptiness of some stadiums can be counted against them in weighing whether these Games were a success, frankly, that's their business. It's not ours, since we won't be around to split the cost or help shoulder their problems after tomorrow." Apparently, word that the global economy is interconnected, and that a fiscal crisis in Greece can affect prices of shares traded on the New York Stock Exchange, hadn't reached the Post columnist, who touted the "restoration of Athens as a splendid world capital." Splendid -- and nearly broke.

The chairman of the U.S. Olympic Committee Board of Directors, Peter Ueberroth, concluded the 2004 Athens Olympics by saying that Greece had proven itself "a successful country, a country to be proud of." It's not looking too succcessful right now.

London's Independent, in an article in 2008, concluded:

Athens's legacy is among the worst of any Olympiad. Four years after the closing ceremony of the Games that former International Olympic Committee president Juan Antonio Samaranch called the "best ever", as many as 21 out of the 22 venues lie abandoned. The open-air swimming pool is empty and stained, while squatters camp outside the graffiti-festooned Faliron complex, which hosted events such as taekwondo and beach volleyball.

The Athens Olympics, which cost a record £9.4bn to stage (way over its original budget, which rocketed after the September 11 terrorist attacks increased security costs) have left Greece groaning under a huge debt. In the months after the Games, the shortfall amounted to €50,000 for each Greek household, and taxpayers are still footing the bill. Maintenance of the sites alone has cost as much as £500m.... Despite the success of the sporting events and the smooth running of the Games (workers pulled of a small miracle by finishing some venues with hours to go), as well as undoubted improvements to the city's infrastructure – notably its subway – Athens has become a manual on how not to stage the Olympics.

Hope the Obama-Warren Buffett high speed rail plan works out better for America than the new and improved Athens subway did for Greece.

by Ira Stoll  |  Feb 16, 2010 at 9:55 am Related Topics:  Europe, President Obama, Press, Stimulus, Warren Buffett receive the latest by email: subscribe to the free futureofcapitalism.com mailing list