Athens will not Jeopardize Olympics for Stability Pact

Greek Finance Minister Giorgos Alogoskoufis insisted there is no way his government will cut back on costs relating to the upcoming Olympics, despite massive overspending that threatens to bring Athens into conflict with EU budget rules. "There is no way that we will jeopardize the Olympics for this reason," said Alogoskoufis told the Euobserver in Brussels. "We are looking at other areas of public expenditure...not the Olympics." The costs of preparing the 2004 Olympic games, which begin in less than 100 days time, have spiraled out of control and blown a large hole in Greece's budget deficit. Athens originally budgeted 4.6 billion euros for the games, but due to delays in completing the work and higher than expected construction costs, some now estimate the final bill as high as 10 billion euros. And this weighs heavily on the Greek budget deficit, potentially bringing Athens into conflict with the European Commission.

After elections in March, the new Greek government announced it was raising its 2003 deficit projection from 1.2 percent of GDP to 2.95 percent, and putting it perilously close to the three percent ceiling imposed by the euro zone's Stability and Growth Pact rules. Last week, Eurostat, Brussels' statistical office, declared that Greece had indeed broken through the limit in 2003 with a deficit of 3.2 percent.

Alogoskoufis blames part of the overspending on increased security costs for the games. "There were many reasons for the overruns. One was the delays. Second is the increased cost of security ... it's a lot of money, but because of the international situation we have to be extra careful". The Olympics is expected to be supervised by 70,000 security officials, outnumbering athletes by almost seven-to-one. Costs on security could be as high as one billion euro.

Despite prioritizing the "Greatest Show on Earth," the charismatic 49-year-old minister emphasized his country's strong commitment to the euro rules. "It's difficult," he said. "It's not easy to maintain it below the three percent, but we are committed to the Stability Pact." And he hinted that his fellow ministers were sympathetic to Athens' plight. "I made it clear to them both in the euro zone group and in the ECOFIN [meeting of EU finance ministers] ... that this is a temporary and one-off event." (EUobserver.com)