How Greece never recovered from Athens 2004

The lead picture of this article is of a stadium that was made 'world-class' for the Olympics and depicts where the country's economy stands today.

“The reason that Greece is currently in this shape is rooted in the fact that we organised the Olympic Games.”

Greece’s Olympic Village, built before the 2004 Athens, was to be turned into the country’s biggest social housing development, but it never happened. Homes, shops, offices and local hospitals et al stand neglected. The quote above is from one of the 8,000 residents in such houses.

While the Olympics cannot be solely held responsible for the turmoil Greece has been in ever since, it must shoulder a part of the blame. The 2004 event was hardly given to the country based on its ability and economics, but far more on romance – the home of modern Olympics, imbued with values and history.

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The Olympic Games is a very costly undertaking, and by default, means crunching financial erosion for the host country. Governments, however, see international attention, an expected boost for tourism and major spending opportunities in events like this.

The 2004 event cost nearly $11 billion by current exchange rates, double the initial budget for the country, and this number does not include the major infrastructure projects rushed to completion at inflated costs. 

It is wrong to say that everything surrounding the event was negative – Greece built a brand-new airport, stadiums, a subway system and a tram service – the latter two still used extensively by the masses. However, the sporting amphitheatres have not paid back, and instead, taken a toll on the lives of several who were asked to relocate for the same.

The swimming pools, the stadiums and the boating facilities are crumbling monuments today that are dilapidating into waste. The IOC, on the other hand, reported that it made $985 million from the Athens Games and a lot of voices called upon the international body to contribute to the country’s growing economic ruins.

Bigger cities and countries may reap benefits of such events, a study suggests, with tourist inflows and the ability to cater to that, but not Greece or Athens. The study revealed that people looking for Mediterranean sun tried to avoid Greece and went to Italy instead.

In 2018, Greece’s debt was 181.2% of its economy, nearly €323 billion Euros. Simply put, the economic freefall of Greece may not have been brought by the Olympics, but the event certainly acted as a catalyst. Over the last decade, the country’s budget deficit remained well above the limit set by the European Union of 3 % of GDP. It rose abruptly in 2009 (in all likelihood helped by the global recession in 2007) to reach an estimated 13.6 %-the highest since the 1993 recession.

But not everything is wrong with hosting the Olympics if done right.

Spain became a democracy in 1978 and just 15 years later, the Barcelona Games happened. The Olympics reinvigorated the city, though at great cost, and advertised that the country was open for business with the world. It helped Spain massively, which grew on the European market and became a hub for tourism at the same time. 

France and Germany have been at loggerheads in the past to keep the country in the Eurozone, and Greece has already received multiple revival packages from European governments and the International Monetary Fund (IMF). The Greek crisis was so abysmal that it even threatened to damage the euro.

The country still languishes in debt and a leaked IMF report, reported by Reuters, stated that the nation needed far more relief than already provided. It also stated that the lending countries would have to give the nation at least a three-decade grace period on all its loans and a dramatic maturity extension, if they do not agree to forego or circumcise the loans. 

Greece isn’t the only country on the list to have been paralyzed by the mega-event, there’s more. We’ll bring you more such incisive reports in this series.