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Last Updated: Tuesday, 2 November, 2004, 17:16 GMT
Deficit woe for Greece post-games
Olympic flag and torch
Tourists shunned Greece in Olympics year
A shortfall of foreign visitors at the Athens Olympics has left Greece in financial difficulties as it bids to climb out of a budget deficit.

The Greek government is outlining its economic prospects after the games, and its message contains strong lessons for London, bidding to hold the 2012 event.

Greece's budget deficit grew as it took on the games' 7bn-euro (4.8bn) cost.

Security fears, poor marketing, and hotel price rises mean total visitors for the year may be down 10% on 2003.

Hotel bookings down

In 2003 tourism made up about 18% of Greece's GDP, with about 12 million visitors.

The Athens 2004 Organising Committee had estimated that an additional 500,000 foreign tourists would descend on the city for the Olympics.

But hotel room occupancies during the two-week event were said to have been up to 20% lower than expectations.

Greece's budget deficit, which breached the EU cap in 2003, is now expected to hit 5.3% in 2004.

Eurozone states are expected to have deficits of below 3% of gross domestic product (GDP).

'Foreign currency earner'

In October the Institute for Public Policy Research, and fellow think tank, Demos, said the organisers of any London Olympics needed to develop a long term strategy to improve the city after the games.

The two organisations said previous Olympic cities had struggled to maintain prosperity after the event.

On Tuesday, Greece's deputy finance minister Peter Doukas admitted that tourism was no longer the country's biggest foreign exchange earner.

He said the boom in China's economy had helped shipping overtake tourism.

"It has rendered Greek shipping a stronger foreign currency earner than tourism," Mr Doukas told the economic conference in Athens.

About a fifth of the world's shipping fleet is owned by Greek companies and in 2004 they will bring in about 7.8bn euros in foreign currency, compared to tourism's 6.9bn euros.

The Greek government's draft budget, which aims to reduce the deficit to 2.8% in 2005, forecasts the economy will grow by 3.9% in 2005.


SEE ALSO:
Greek debt spirals after Olympics
12 Sep 04 |  Business
Greek hopes for Olympic windfall
31 Aug 04 |  Business
Olympic costs hit Greek deficit
04 Aug 04 |  Business
Olympics 'may cost Greece dear'
02 Jun 04 |  Business
Greek budget mess earns EU rebuke
20 May 04 |  Business


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