Long before the start of Euro-2012 critics were saying that the preparation process would never pay off and that Ukraine would go into the red. In particular, the critics cited the example of Greece, which still suffers debt consequences of holding Olympic Games in 2004. However, today's situation has changed and many experts say that the general effect of the event is rather positive. ForUm has looked into the matter to figure out the real situation.

Victory or loss?

Indeed, if to count in nominal figures, the vice PM and minister for infrastructure Borys Kolesnikov admits that Ukraine has spent about $5 billion while has earned about $1 billion. According to the specialist, Ukraine was visited by about 1.8 million people and "taking into account that each  spent about $400 plus additional incomes of the budget and business, the championship has brought in total about $1 billion." As for the expenses, construction and reconstruction of the roads cost the most (about $2.2 billion), and total cost of stadiums amounts to $900 million. The reconstruction of Olympic stadium in Kyiv cost the most  - $600 million. 50 million euro were spent for services - interpreters, technicians and other personnel.

Executive partner of "Capital Times" investment company Erik Nayman says that the means spent by the state budget were taken as loans from foreign banks. "With 5% of annual interest rate only for the debt service will cost Ukraine $250 million annually. In addition, having won the bid we expected an investment boom in 2007-2008, but it did not happen."

Back in spring the Cabinet estimated the earnings in the amount of $1.5 billion. However, the clear sum has appeared to be 1.5 times less. Nevertheless, economist Viktor Lisitski notes that "even if we've earned less than expected the world has learned about our hospitable country." "Despite all negative forecasts the tourists will keep coming in Ukraine. Besides, now we have modern stadiums, speed trains, new high-ways and airports of the European level. If we use this potential thoughtfully, we may return the expenses in 2-3 years."

Analyst of the Gorshenin Institute Maryna Tkachenko declares that winning the bid was an important long-term investment. According to the expert, the improvement of the tourist and investment attractiveness of the country will result in the growth of GDP within the next years, and the modernization of the basic infrastructure will improve the effectiveness of the economy. "There are direct and indirect economic effects of the championship. The direct one is the infrastructure investments and spending of the fans. The indirect effect is the improvement image of the country, business and certain national companies. Even the indirect effect can be turned into financial gain - increased amount of export and new foreign investments." In turn, Kolesnikov specified that the new airports will produce a profit for the next 30-40 years, while the landing strips designed for 75 years of operation.

Speaking about the immediate effect, the specialist says that the very preparation to the event has increased country's GDP and created new jobs. The Gorshenin Institute has calculated that the total economic effect of the preparation and staging of the championships for 2008-12 has made about 2.8% of GDP (GDP of 2011 was used as a basis). In Poland, for comparison, the similar effect amounts to 2.1% of GDP, taking into account the fact that Poland has spent 7(!) times more than Ukraine.

Investments in the future

Indeed, such abstract notion as positive image of a country on the world arena means very concrete figures for the investment climate, including the trust of economic and political foreign partners. Basing on this parameter the countries are rated for further long-term investments, loans and cooperation programs. Executive director of The Bleyzer Foundation Oleg Ustenko says: "This is a forward thinking investment, and one should not expect immediate pay-off. The football event has improved the image of the country. The foreign businessmen who visited Ukraine will put it on their investment maps."

Political scientist Oleksandr Kava notes that Euro-2012 has opened the country for foreigners. According to the specialist, "the event has enabled Ukraine to reveal its true potential and to improve its infrastructure. Even UEFA president Michel Platini mentioned that thanks to Euro Ukraine has made a 30-year progress." In his turn, MP Oleksandr Volkov confirmed that the results of staging the championship are more important than the expenses. "After Portugal had held European championship it became a touristic Mecca. I think Ukraine will follow."

Analyzing by the regions, Lviv has earned the most  - about UAH 500 million. Donetsk mayor reported about 300 million of profit and the capital managed to het 84 million. All major airports also don't lag behind: the Kharkiv Airport has increased its passenger flow fourfold on average, Lviv and Donetsk airports - 2-2.5 times and the Boryspil Airport - threefold.

With the end of Euro the infrastructure projects do not come to the end. Prime Minister Mykola Azarov believes that further development of infrastructure must be included into state budgets for 2013-2014 years. "Moreover, we must doubt the rate. We have things to do for the next ten years. The matter concerns the construction of airports in every regional center, the construction of roads, bridges, diagnostic and treatment centers, modern housing..." Azarov said. Remember also the national project "Olympic hope - 2022".

This all means that despite the investment "underboom" and other "spoons of tar" Ukraine has got the expected positive outcome. Indeed, out investment climate is far from being perfect, but nevertheless Ukraine has become popular even among those operators, who did not even know about the very existence of our country. Indeed,  the reconstruction of roads and airports have not been completed, but the whole world knows now that Ukrainians are capable to welcome guests. Indeed, the Association agreement with the EU has not been signed yet, but tens of millions of Ukrainian have already got a feel of being Europeans.

Andriy Boyarunets


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