The Greek case, where good old partisanship rules

Plenty of economic activity accompanies an Olympic Games, and Greece had a separate developmental bonus: $17.5 billion in EU funds from the Third Community Support Framework. How well these funds are utilized («absorbed» in the jargon) has been the source of great debate. But the need for a structured plan to channel this money – not just through projects and blueprints but through human and organizational initiative – has been clear for years. Even at this late stage, Diamantopoulou says, there are two things that can be done to get a competitive edge from the Games: (a) position Greece as a business crossroads, building on the technological infrastructure that will be a major legacy of the Games; and (b) get an edge in tourism, going beyond the usual package-tourist approach, a theme sounded by others as well. The old-fashioned way But if the Games are a way to position for the future, the ever phlegmatic Finance Minister Nikos Christodoulakis insisted that Greece’s preparations were firmly in the publicly funded mold, at a level challenged only by Moscow, 1980 hosts – hardly the best of models. The 4.5 billion (and counting) euro bill for infrastructure, involving some 480 different projects, has been wholly government-funded. Even the renowned sponsorship program, he insisted, has relied on publicly owned companies, and there has been an «almost complete lack of private participation.» It was not clear whether this was an admission of shortcoming or a point of pride for the Socialist government. The minister insisted, however, that this imbalance has its upside, namely the unlikelihood of a major slowdown in the economy after 2004. The state spending juggernaut will not suddenly grind to a halt following the Games, and indeed all prior hosts have seen major benefits accruing after the Games, while completion of Olympic projects will free up more public funds for other future projects. Not just the Games but the post-Games economy will be state-led. It is a sort of freight-train logic; you can’t slow it down or even steer it easily. In order to succeed, however, the Games need to fulfill nine different criteria. These include the «heritage of experience» gained from learning from timely completion of projects; good hospitality for guests to create a «bond with Greece»; making the best use of the Games by the business community; good post-Olympics use of infrastructure; more national self-confidence; expenses kept to a minimum; and the drawing up of a viable post-Games development plan encompassing areas outside of Attica. That’s a lot of ifs. Another government figure, Gikas Hardouvelis, a loquacious counselor to the prime minister, reiterated that resources will be released after the Games. Yet his claims of lower unemployment drew snickers from the audience, while his talk of true convergence with the EU by 2015, providing a 3.5 percent growth rate, somehow rang hollow. He also drew attention to an overlooked fact – echoed later by Christos Pachtas, deputy economy minister – that EU structural funds will begin drying up in 2008, not 2006, and that neither the Games nor the ending of the EU windfall are «swords of Damocles» hanging over Greece’s head. These were soothing words for a country where many fear the worst after 2004 – even if its citizens have, as they claimed, a «will to compete» in Europe. Time will tell, but at least Pachtas produced a better definition of «convergence» than most: «to create a feeling of belonging» to the greater EU, involving attitudes, not just numbers. The response Convergence talk is unlikely to pan out if the past 20 «disappointing» years is any guide, said ND MP Giorgos Alogoskoufis, who combines a sterling academic background with a stirringly partisan message. Missed opportunities, wasted funds, delayed projects, the non-sustainability of the Olympics works, and the general decline, as he sees it, of the Greek economy – now at 60 percent of per capita income compared with the EU, and with unemployment at four times the level of 1980 (2.7 percent), and a public debt over three times 1980’s levels. The numbers, however accurate, aren’t pretty from his point of view. Not surprisingly, amid this catalog of misfortune, a «different economic policy» is needed, one entailing growth and social cohesion and bringing public expenses below those of the private economy. And completing the political twist, ND’s economic spokesman said that Greece needs to take environmental initiatives, not just follow them, and generally that Greece must do its housekeeping. Yet his claim that a new ND government, if elected in the spring, would immediately implement a new economic policy to move beyond the vicious circle is undercut by Karamanlis’s pledge that ND would do nothing to impair Olympic preparations. But as the Games will be the only game in town after the elections, it seems that any «immediate shift» in economic policy will have to wait six months at least until the Paralympics are over in the fall of 2004. A less political figure, Dimitris Symeonidis, president of the Federation of Industries of Northern Greece, underscored the need to keep investment up after the Games even while any budget surplusses will have to pay off the high debt, which should be below 60 percent of GDP, not over 100 percent as now. And Symeonidis drew attention to the painfully low level of foreign investment, the «Achilles’ heel of the Greek economy.» (Karamanlis later stressed that outside investment amounted to just 50 million euros last year, the lowest in some 27 years, casting doubt on the «globalizing» Greek economy.) A new legal framework, public-private partnerships, structural changes in tax and insurance, and more flexibility are all needed for greater international investment in Greece – even without the Games, but especially with the opportunities they raise. And Symeonidis said more regional convergence within Greece was needed before Greece as a whole can converge with the rest of the EU. It was an uncomfortable reminder that the Games have skewed development even further in the direction of the capital, which may be reversed. All speakers in the morning session managed to touch on the huge question of unemployment and human management, and all managed to skirt the issue of immigrant labor, even as immigrants have provided cheap and flexible labor for Olympic projects. Again, diagnoses and ideology outstripped solutions and pragmatism, by a wide margin.