The Athens Olympics will cost over $12.09 billion, more than double the original target, pushing Greece’s budget gap well above EU limits, finance ministry sources said on Wednesday.
The original Games budget was set around $5.5 billion, but a rising security bill and overruns in construction costs have prompted several upward revisions in recent months.
“The estimate is that the total cost of the Olympic Games will be close to 10 billion euros ($12.09 billion), mainly due to overruns in spending,” said the official who declined to be named.
“For example, the costs of security will exceed the 1 billion euro ($1.2 billion) target,” he said.
Within the last two months the Greek government has twice raised its cost estimates first to $7.2 billion and last week to more than $8.4 billion. Deputy finance minister Petros Doukas has also warned higher costs will push Greece’s budget deficit above 4 percent of gross domestic product this year.
On Wednesday another finance ministry official said that following a deficit overshoot last year and higher-than-planned spending this year the 2004 budget shortfall was set to come around 4.5 percent, well above the European Union’s three percent limit.
The head of Greece’s statistics service told Reuters last year’s deficit was seen at 4.4-4.7 percent.
The conservative government, which took over the reins after March general elections, has blamed the frantic race to complete venues for the Aug. 13-29 Games after years of delays and the costly security operation for the overshoot.
Greece has budgeted an unprecedented $1.2 billion to protect the first Olympics since the September 11, 2001 attacks on the United States.
But opposition socialists, who helped Athens win the Olympic bid and lost power just five months before the Games, say the current government is inflating the costs by including projects only loosely linked to the Olympics.
They argue that by exaggerating the state’s fiscal woes the government is trying to avoid fulfilling its campaign pledges of increased spending on health and education.
“I don’t agree with that number, it’s a New Democracy practice to show higher spending by including works not related to the Olympic Games such as new metro lines,” Costas Kartalis, a former socialist official in charge of Olympic preparations.
The European Commission has already warned Greece was set to breach the European Union’s three percent limit and gave it until November to rein in deficits by 2005, but when it issued its warning it predicted only a moderate overshoot.