The Unwanted Legacy of Euro 2012

Clock in Lvov Prospekt Svobode (Freedom square), Ukraine showing time to start of EURO 2012. Photo: Petar Milošević. wikimediaWith only days to go until the first ball of Euro 2012 is kicked, the tournament’s hosts, Poland and Ukraine, are preparing to hold a major sporting event for the first time. From June 8 until July 1, their major cities will fill with enthusiastic supporters of Europe’s 16 best national football teams. There is little doubt that the host nations’ promise of a fantastic atmosphere and wonderful, lasting memories for visiting fans will be fulfilled. However, while both Poland and Ukraine will undoubtedly benefit from the massive influx of tourists, once the tournament’s final whistle blows on July 1 only one thing will remain: the tournament’s costs.

The concern regarding potential ‘white elephants’ (a property requiring much care and expense, yet yielding little profit) is one the politicians in both countries have not adequately addressed—the eight newly-built or restored stadiums in preparation for the tournament have cost over €2.5 billion. When the average attendance in Poland’s Ekstraklasa (premier-division football league) is 8,500, and the Ukrainian Premier League averages 11,500 spectators per match, it seems rather clear that the two nations will have problems making the stadiums—which hold between 30,000 and 60,000 spectators—economically viable in the long-run. There are precedents that tournament organisers should have been aware of: after hosting major sporting events, Japan, South Korea, Greece, and Germany all have ‘white elephant’ stadiums being kept afloat almost exclusively by government funding. The most serious case of ‘white elephants’, however,  must be in Portugal, where some stadiums built or refurbished in preparation for the Euro 2004 football championships are scheduled to be demolished due to their unsustainably high maintenance costs.

Euro 2012 Logo. Photo: Petar Milošević. wikimediaThis may not be too big an issue if the problems regarding costs ended there, but the cost of the stadiums is only one part of the overall expenditure incurred by the two countries. Investment in Poland is said to have exceeded €20 billion, and total expenditure in Ukraine has cost over €10 billion. Ukrainian citizens seem to be divided on the benefits of the tournament. Igor Basanskyi, from Kiev, feels that “it is an honour [for Kiev] to host the final of Euro 2012” and that “foreigners will find out more about our country—they’ll be able to see for themselves what Ukraine is.” Fellow Ukrainian Yana Brovdi is not so sure: although she agrees that Euro 2012 is “a great opportunity to show that Ukraine belongs in the European Union,” she believes that the huge costs of infrastructure improvements due to “the involvement of the private companies of Ukrainian politicians … in various construction projects” have put a heavy burden on Ukrainian tax-payers. She may have cause for concern: according to Reuters, Ukraine is scheduled to repay billions in outstanding loans to Russia’s VTB Capital and in Eurobonds later this year. To make matters worse, Ukraine “has failed to agree on a new credit line with the International Monetary Fund.” Incurring further debt due to Euro 2012 seems to be the last thing the country needs, yet the most recent estimates suggest the tournament’s losses may total €6 billion.

The new infrastructure will undoubtedly yield benefits: the Ukrainian city of Lviv, for example, is estimated to have “leapt forward ten years in terms of development.” But some are critical of such benefits. Mani Shankar Aiyar, the Indian Minister of Youth Affairs and Sports, experienced India’s hosting of the 2010 Commonwealth Games, which saw India spend approximately €14 billion after an initial budget estimate of €300 million. Aiyar’s feelings towards massive investment on sporting events are unequivocal:  “Why the investments in city infrastructure and tourism development must be linked to a ball jumping on a football field? If a country needs new airports and railroads, they must be built [regardless] of any championship.”

With Euro 2016 scheduled to be held by France, there will likely not be a repeat of this problem in four years’ time—France has held major events before and already has good infrastructure and well-used stadiums throughout the country. But with the European Championships expanding from 16 to 24 teams from Euro 2016, how many other European nations will be able to handle the burden of increased spending in preparation for hosting the tournament? By focusing on the huge costs of the most recent major sporting events, the answer to that question is simple: not many.

SEAN KEARNS