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| Opportunities & Exposures |
Run for the Money
John S. Irons
08/02/2004
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For example, there have been construction delays at
some of the major venues in Athens. Although the International Olympic Committee
(IOC) has reported that all facilities should be finished on schedule, builders
have certainly earned no gold medals. The swimming arena, for example, will have
to host events without a roof. Greek builders failing on the world stage might
actually hurt the country’s manufacturing exporters, who would be—perhaps
unfairly—tainted by their countrymen’s very public failure.
Terrorism
represents another peril. According to the Washington Post, the IOC has
purchased a $170 million insurance policy in case it must cancel the Games due
to terrorism or natural disaster. If there were an incident, and foreign
visitors came to perceive Greece as unsafe, it would certainly hamper tourism.
The relatively small bombing incident at the Atlanta Games demonstrates how easy
it is for malicious individuals to distract attention from the Games, and to
taint the image of the host.
Debt is another sticky issue. Due in part to its
spending to prepare for the Olympics, Greece exceeded the European Union’s 3
percent budget-deficit limit for governments, posting a 3.2 percent gap in 2003.
Many predict a similar shortfall this year. This exacerbates the nation’s
already-high debt level, which exceeds 100 percent of GDP. Fortunately for
Greece, this has not yet affected the credit ratings on its securities.
While
it might be too late to play in the construction game, those interested in
investing in Greek debt might still have a race to run. After all, Greece will
be paying for these Games long after the last Olympic medal is awarded.John S. Irons is an economist at OMB Watch, a Washington, D.C.-based
government watchdog organization, and founder of ArgMax.com, an award-winning
economics website. Art by Matt Mahurin
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