Charlemagne: What price euphoria?

Lessons from small countries that stage big sporting events

IN MEDIEVAL Europe rulers who wanted to make a statement built a cathedral. In modern Europe they build sports stadiums. This weekend the eyes of much of the continent will focus on the Stadium of Light in Lisbon, where the final of the Euro 2004 football championships will be held. Combine the soaring architecture, the songs, the dazzling lights and the delirious fans, and the final may even feel a bit like a religious ceremony. In August it will be Athens's turn to take the spotlight, when it hosts the Olympic Games. A frantic race to complete all the Olympic facilities is now under way.

For Portugal and Greece, Euro 2004 and the Olympics serve similar purposes. They are international coming-out parties for small countries that fret about being on the geographic, political and economic fringes of Europe. Both countries moved from dictatorship to democracy in the 1970s. Both had their fitness to host big sports events questioned, because of their small populations (around 10m apiece) and relative poverty; Portugal and Greece were long the poorest of the EU's 15 countries. Both see this summer's sporting events as a chance to make a statement. The press handbook for Euro 2004 contains a potted history of Portugal featuring revolution, dictatorship and loss of empire, before noting, a touch defensively, that “Portugal is now a modern and progressive nation.” Certainly anyone ambling past the bars and restaurants of Lisbon, packed with football fans, would find it hard to believe that 30 years ago this was a city choked with refugees, as a million settlers flooded back into Portugal after the liquidation of its colonial empire.

Yet using a sports tournament to make a statement about your country is neither risk- nor cost-free. The Greeks fear that construction delays and cost overruns may reinforce the idea that their country is not quite first-world, rather than scotch it. The Portuguese did better, building or completely refurbishing ten football stadiums in plenty of time for the tournament. Even so, it seems a bit extravagant to blow €660m on new stadiums for a four-week tournament in a country that is just emerging from its deepest recession in three decades.

The Portuguese bid to host Euro 2004 was made in the middle of a long economic boom. But by the time the tournament was actually on the horizon, the country was suffering from a severe economic hangover. Government spending had got badly out of control and Portugal achieved the dubious honour of becoming the first of the 12 countries in the euro area to break the stability-pact ceilings on budget deficits. The government of José Manuel Duro Barroso was obliged to slash spending, freeze civil-service pay and raise taxes. The result, at least in the short term, was to make the recession worse. Mr Barroso's virtue has been rewarded this week with his appointment to the presidency of the European Commission. Portuguese virtue could yet be rewarded with higher growth. But there must have been many times when the Portuguese people cursed all that cash going into sky-boxes for football fans, while civil servants marched through the streets in protest at their pay freeze.

The economy is now at least expanding again, but the extravagance of spending on Euro 2004 may seem even more marked when the tournament is over. The Stadium of Light looks and sounds fantastic when capacity crowds of 65,000 roar on their teams. It could feel a little sad and empty during the normal Portuguese football season. Its normal occupant, Benfica football club, attracts an average attendance of 22,000. The figures are even starker for new stadiums outside Lisbon. The new Braga arena holds 30,000 supporters; FC Braga, the local team, attracts an average attendance of just over 5,000.

The tournament will surely give the Portuguese economy a bit of zing over the summer. For the past month it has been virtually impossible to find a hotel room in Lisbon or Porto. Super Bock, the local brewers, are reckoning on selling an extra 650,000 gallons of beer during the football tournament, although that figure may have to be revised downwards after the early elimination of England (along with France, Germany, Italy and Spain). Overall, the government reckons that Euro 2004 will bring in some 200,000 extra visitors and generate rather over €100m ($120m) in extra tourist revenues. A welcome boost no doubt, but it hardly adds up to a transformation. If the football adds 0.2% to this year's GDP, Portugal will have done well.

The Portuguese (and Greeks, when their turn comes) hope that a successful tournament will also have a longer-term impact. Some dub this the “Barcelona effect”, in homage to the way that the 1992 Olympics showcased the Catalan capital, helping to turn it into one of Europe's most fashionable places for conferences and holidays. But such an effect is not inevitable. The image of Atlanta was not improved by the 1996 Olympics: if anything, the reverse. And Belgium did not become suddenly chic thanks to co-hosting Euro 2000. Had you forgotten that?

Portuguese men-of-war

Indeed, the economic arguments for hosting big sporting tournaments are largely spurious. The real case for Portugal taking on Euro 2004 is that sporting success seems to make people feel marvellously good. The English still drone on about winning the football World Cup at home in 1966. Danish supporters in Portugal carried banners bearing the date 1992: a reference not to the signature of the Maastricht treaty, but to Denmark's historic victory in that year's Euro tournament. For the past month the whole of Portugal has been agog as the national side, after an uncertain start, has progressed through the tournament, notching up heart-stopping victories over bigger, richer countries such as Spain, England and the Netherlands on the way. Against most expectations, the Portuguese may even carry off the championship in the final on July 4th. Who needs an empire, or an economic boom, if you can have moments as ecstatic as that?

Commentary feature looks at the value and the costs of big sporting events like Euro 2004 and the Olympic Games taking place in European countries.

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