Athens 2004 Olympics
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13 November, 2004
The cost of the Athens 2004 Olympic Games substantially overshot the budget, Economy and Finance Minister George Alogoskoufis said on Friday, speaking at a press conference following a meeting of the Inner Cabinet chaired by Prime Minister Costas Karamanlis, but added that "it was a major investment, which will yield in the coming period".
Alternate Culture Minister Fani Palli-Petralia, addressing the same press conference, said that last August's Olympic Games in Athens were "an immense venture with very great success and security, but also very expensive", adding that "everything was done with absolute transparency" and that "the next day" was very important.
Alogoskoufis said that the largest proportion of expenditures was carried out in 2003 and 2004, noting that the initial forecast put the cost for the Olympic Games at 4.5 billion euro, while the overall cost (state and private funding) was estimated to reach 8.954 billion euro, not including the cost of projects that were completed or the construction of which were accelerated due to the Games, but which had been planned for construction regardless of the Games. Those projects included the Attiki Road highway, Athens' new Eleftherios Venizelos international airport, the tram, and the suburban railway. Of that 8.954 billion euro total, an estimated 7.202 billion was footed by the State, with the remaining 1.752 billion euro coming from the Athens 2004 Organizing Committee (ATHOC) and financed by the committee's revenues from ticket sales, television broadcast rights, Olympic-logo product sales, and sponsorships.
The largest proportion of state financing -- expected to reach 7.202 billion euros -- was earmarked from the Public Investments Programme (PDE), under which 6.583 billion euro, or 73.5 percent of the overall state funding, was forthcoming, and was channeled mainly to infrastructure projects, Olympic athletic venues and facilities, equipping of the venues and facilities, security expenditures, and cultural activities, Alogoskoufis said.
The minister also noted that "the projects for the Olympic preparation and the specific projects of national planning" (referring to public works projects of national magnitude which had been planned regardless of the Games) were financed "exclusively from national resources", adding that the infrastructure projects category included expenditure for improvement in hospitals and transportation means.
He further clarified that the special projects of national magnitude included not only the projects carried out in Attica, but also those carried out in the provinces under the "Greece 2004" program.
Regarding the expenditures covered by ATHOC, Alogoskoufis said they were expected to reach 1.752 billion euro, or 19.6 percent of the overall 8.954 billion euro cost of the Games, and were funded from ATHOC revenues chiefly emanating from ticket sales, television rights, sale of Olympic-logo products, and sponsorships.
In an analysis of expenditure by category, Alogoskoufis said, spending on infrastructure works was estimated to reach 2.861 billion euro (39.7 percent), and spending on sport venues and equipment was expected to reach 2.153 billion euro (29.9 percent), while spending on the promotion of Greek culture, environmental intervention and landscaping, and the hosting of athletes was due to reach 1.108 billion euro (15.4 percent), while the remaining 15 percent, or nearly 1.080 billion euros, was the outlay for security, including all categories of additional compensation.
As for the distribution of expenditure by ministry, via the Public Investments Programme (PDE), Alogoskoufis said the biggest proportion of PDE-related expenditures was footed by the Environment, Town Planning and Public Works ministry (35 percent) and the Culture ministry (34 percent).
News that the final cost of the Athens Olympic Games was nearly double the amount originally budgeted for, as revealed by Finance Minister George Alogoskoufis during a briefing of the cabinet, drew sharp criticism from the opposition parties on Friday, especially main opposition PASOK.
PASOK spokesman Nikos Athanassakis launched a bitter attack against the government, pouring scorn on the figures produced by Alogoskoufis and accused him of "political fraud" in order to deceive the Greek public and divert attention away from foreign policy issues and the upcoming debate on the government's tax bill in Parliament.
He also suggested the announcement was linked to the upcoming ECOFIN council next week, when EU finance ministers will discuss the reduction of the Greek public deficit over the next two years. According to Athanassakis, the government was trying to bump up the cost of the Games in order to convince its EU partners that it would be relatively easy to reduce the deficit in 2005 and 2006.
The spokesman said the government had added all infrastructure spending to the Olympics bill, even that which had post-Olympic uses, and had failed to include significant sources of revenue generated by the Olympics, such as VAT and taxes levied from business.
Finally, he accused the government of failing to make use of Olympics infrastructure and allowing it to deteriorate, while sharply criticizing a statement by Alternate Culture Minister Fani Palli Petralia that the Athens Games had been "very expensive".
Source: Athens News Agency