Olympic borrowing is part of debt crisis

Greece has resorted to emergency borrowing to cope with excessive spending and the increased cost of funding the Olympic Games. The pressure has emptied state coffers and it emerged yesterday that in late April and early May Deputy Finance Minister Petros Doukas quietly concluded five long-term loans covering a total of 5.75 billion euros. In the first five months of the year, the total of loans concluded came to some 30 billion euros, against a forecast of 32 billion euros for the whole year. This situation has created great concern and raises the specter of a crisis this autumn, once the Olympics are over and the full extent of the debt is revealed. Rumors say that latest estimates raise the cost of the Athens Olympics to 10 billion euros, way over the 4.6 billion euros forecast by the previous government. Most of this extra cost will be covered by borrowing. National Economy and Finance Minister Giorgos Alogoskoufis pledged yesterday that after the Games there will be a full accounting of the cost. The New Democracy government, which came to power on March 7, has issued 30-year bonds worth a total 2 billion euros, the one at 5.1 percent interest and the other at 4.52 percent. Another two, at floating rates, are for five years and seven years and worth 2.35 billion and 1 billion, respectively. Another bond issue is worth 400 million euros.