Greece hit with €6bn Olympic bill

THE COST of the Athens Olympics will be 30% higher than initially expected, reaching €6bn, Greece's finance minister revealed yesterday.

The conservative Greek government, which swept to power in March after 11 years of socialist rule, had previously hinted the Olympics would considerably exceed the original €4.6bn budget, but had not said what the final bill would be.

"There will be significant overruns in the Olympics, we will reach €6bn," Finance Minister George Alogoskoufis told a parliamentary committee.

After wasting the early years of preparations on in-fighting and bureaucracy, the organisers have gone into overdrive in the last two years to complete the venues.

This has pushed up costs as contractors deploy double and triple working shifts.

Surging Olympic costs have forced the Greek government to borrow more than it had planned this year in the run-up to the games.

Last-minute tightening of the purse strings also meant an Olympic bonus, intended to sweeten up civil servants drafted in to cope with unusually high demand in August, would be given only to a few of the unions it was originally promised to. Greece even cut back on its traditionally high defence spending to make funds available for the games.

"This is a significant overrun which creates a considerable challenge for Greece's fiscal policy," said an economist who preferred not to be named.

"This reduces the government's flexibility to go ahead with the pro-growth policies it has promised, like tax cuts," he added.