How the 2004 Olympics Triggered Greece's Decline

As they watch the London Olympics, many Greeks may wonder how their country went from the international glory of the Athens Games in 2004 to the recriminations of today’s crisis. Hosting the event cost almost €9 billion ($11 billion at today’s exchange rate), making the 2004 Games the most expensive ever at that point. Greek taxpayers were on the hook for €7 billion, which did not include the cost of extra projects such as a new airport and metro system.

Within days of the closing ceremony, Greece warned the euro area that its public debt and deficit figures would be worse than expected. The 2004 deficit came in at 6.1 percent of gross domestic product, more than double the euro-zone limit, while debt reached 110.6 percent of gross domestic product, the highest in the European Union. (Today, Greece’s debt is 165.3 percent of GDP.) Greece became the first EU country to be placed under fiscal monitoring by the European Commission, in 2005.