Athens counting cost of the Olympics

Published on 04/08/2005 00:54

THE cost of the Athens Olympics, already tagged as the most expensive ever, could rise at least ten per cent to up to €11-12billion, a top Greek government official said yesterday.

"If we calculate spending by local councils and public organisations, the total cost could come to €11-12billion (7.5-8.5billion), up from a previous estimate of about €10billion," the official said ahead of the first anniversary of the Games. The source added that new costs, which had never been in the original Olympic budget, included hospital upgrades, communications and many labour 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 €9billion.

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

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 €12billion proves correct, the cost of the Games 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 per cent of gross domestic product in 2004, breaching the European Union's cap of three per cent.

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

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 US$140 million over the budgeted $2.6 billion.

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