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Athens Games cost may hit 12 bln euros -govt source

August 3, 2005

By Lefteris Papadimas

ATHENS (Reuters) – The cost of the Athens Olympics, already
tagged as the most expensive ever, could rise at least 10
percent to up to 11-12 billion euros, a top government official
said on Wednesday.

“If we calculate spending by local councils and public
organizations, the total cost could come to 11-12 billion euros
($13.54 billion-$14.78 billion), up from a previous estimate of
about 10 billion euros,” the official told Reuters ahead of the
first anniversary of the Games.

The official said new costs, which had never been in the
original Olympic budget, included hospital upgrades,
communications and many labor costs on a range of projects.

“A large part of the spending by local authorities,
hospitals and public entities was not included in the official
Games budget,” the official added.

The new costs, just submitted by local councils, were not
in Finance Minister George Alogoskoufis’ estimate last year
that the Games total cost had been close to 9 billion euros.

Asked on Wednesday what his estimates were on the total
costs, Alogoskoufis told reporters: “When we have the total
number we will announce it.”

POLITICAL FOOTBALL

The Games cost has become a major political football
because of its effects on Greece’s budget deficit within the
euro zone.

The country’s conservative government, which took power
just six months before the Games started, has heaped all blame
on a decade of previous socialist rule.

If the figure of 12 billion euros proves correct, it would
be four times the three billion euros estimated by the then
PASOK socialist government in 2000.

Olympic spending left Greece with a hefty budget deficit of
6.1 percent of gross domestic product in 2004, breaching the
European Union’s cap of 3 percent.

The higher Olympic costs also pushed up public borrowing in
2004 to 43 billion euros in 2004 from an earlier target of 35
billion.

EU finance ministers have given Greece a 2006 deadline to
bring its deficit to below the EU limit.

Even before the latest estimate, the Athens Games had cost
far more than their 2000 predecessor in Sydney where spending
ran $140 million over the budgeted US$2.6 billion.

Years of delays in construction and a huge rise in the
security budget dramatically inflated the costs of the Athens
Olympics.

($1=.8121 Euro)




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