Athens: Once the Olympic flame dies next August, Greece will face what could be an even greater challenge than hosting the Games — turning the billions spent on preparations into a profitable long-term investment.
The impact that the massive spending ahead of the Athens 2004 Games has already had on the Greek economy is indisputable.
The government estimates that about 40 billion euros of European Union funds, complemented by public and private investment, have been adding up to half a percent to the country’s gross domestic product since 1998 and the effect for 2004 is seen at 0.9 to 1.3 per cent.
This has helped Greece sail through the global economic slowdown and grow at around a four per cent clip while many of its euro zone peers have been flirting with recession.
But once the work on Olympic sites is done and athletes and spectators go home, the benefits will look less certain.
The Greek government, facing general elections by May — three months before the Games — has promised to keep greasing the wheels of the economy with investments after 2004.
The government centre for planning and economic research estimates about 65,000 permanent jobs will be created thanks to the Games, mainly in the telecommunications, services and tourism sectors. Greek construction firms are also seen expanding, helped by expertise gained while completing Olympic projects.
But economists worry that unless those billions already spent and those yet to be invested are flanked by sweeping economic reforms their impact will fizzle out once EU funds start drying up after 2006.
The Federation of Greek Industries (SEV), a leading business lobby, has warned that without deregulation, a more flexible labour market and tax cuts, Greece risks a post-Games slump and a spike in unemployment.