ECONOMY

Athens 2004 budget strained by overruns

The recent decision by Athens 2004, the organizers of the Olympic Games, to reduce both the expenses and revenues of its «balanced» budget by 5 percent provides evidence of financial difficulties in the overall endeavor. Above all, it is indicative of the worries of Gianna Angelopoulos-Daskalaki, the Athens 2004 president, regarding revenue estimates totaling 2 billion euros upon which the budget was originally based. The organizers also seem to be trying to cut expenses at the last moment, after a long period of spending freely. Poor ticket sales, with only 35 percent of the total number of tickets having been sold to date, does not seem to present the major problem for Athens 2004 regarding earnings. The value of tickets already sold amounts to 137 million euros, approaching about 75 percent of the budgeted total income of 183 million euros. The main problem seems to arise from the stance of sponsors, who for months now, have shown dissatisfaction with returns on their «investment» in the Games. Limited interest and lack of enthusiasm on the part of the Greeks, as a result of the Olympic preparations having been turned from a feast to a stressful «battle» for the timely conclusion of the necessary infrastructure projects, as well as a great deal of inconvenience caused to citizens by the construction of public works, have had a negative impact on relations between the sponsors and Athens 2004. The organizers are aware that this fact will have repercussions on the sponsor income program. The situation becomes more complicated when seen in the light of problems related to the funding of projects undertaken by Athens 2004 for the government. One typical example is that of the so-called overlays, concerning the necessary adaptations of Olympic facilities to the International Olympic Committee’s standards, which have pushed expenses considerably above the original budget – already tight due to overruns in previous years. The previous government was mainly responsible for this problem, accusing, on one hand, Athens 2004 of financial «black holes» while, on the other, pressing it to fund certain ventures and promising that ways would be found for the budget to be balanced. Liquidity problems, which worsened in the past few months, were met through the recent borrowing of 200 million euros from Alpha Bank. Now the difficult task of balancing the Athens 2004 budget is expected to be more keenly pursued. Insiders insist that this amounts to an extremely difficult exercise.