Financial crisis no barrier to Madrid hosting 2016

By Duncan Mackay in Madrid

altMay 7 - The current financial crisis, which is affecting Spain more than most countries, will not prevent Madrid hosting a spectacular Olympics in 2016, bid officials claimed today.

The International Olympic Committee (IOC) Evaluation Commission were told that 90 per cent of the income for the Games was already guaranteed.

Juan Antonio Samaranch junior said: "Our candidacy is secure and full of vitality.

"The Games could be held here with or without a crisis for a very concrete argument: in this country the majority of the investment has already been carried out.

"This message the whole world can understand."

Samaranch, the son of the former IOC President of the same name, said Madrid's bid had a budget of $2.7 billion (£ 1.7 billion) for organising the event and another $3.4 billion (£2.2 billion) for infrastructure.

He said:  "It is not just a budget of numbers, you have to convert them into action and how to do so is also spelled out."

Madrid mayor Alberto Ruiz-Gallardon, who appeared before the IOC delegation with Samaranch, called the budget "conservative, realistic and safe".

He said:  “It’s conservative in its hypothesis, because all the concepts it integrates have been assessed in relation to current Spanish market prices and take into account the economic situation.

"It is realistic, as proven by the fact that 77 per cent of the installations have already been built.

"And it is secure because the organising committee manage and finance the Games without institutional hindrance [in spite of having their guarantees] thanks to private resources,”

Last week Madrid's City Government announced it had agreed to guarantee the full price tag of  870 million Euros (£775 million) for the construction of the Olympic Village if the Spanish capital is awarded the 2016 Games.

Mercedes Coghen, the bid's chief executive, said: "Spaniards have worked hard and saved for this event and the Games would be a great opportunity to create new jobs."

Spain has the highest unemployment rate in the European Union at 17.4 per cent and it is forecast to hit 20 per cent next year.

Spain was once one of Europe's economic success stories, posting more than a decade of solid growth.

But over the past two years it has been hit hard by the collapse of its all-important construction industry and tighter credit conditions by banks amid the global downturn., The economy is forecast to contract three per cent this year.

Juan_Antonio_Samaranch_junior_supporting_Madrid_2016Samaranch (pictured) said members of the IOC delegation expressed concern over the possible impact which the fluctuation in the value of the dollar and the euro may have on the finances of the event.

He said: "About 70 per cent of our revenues are in dollars and the percentage of our expenses in euros is even higher.

"How to face up with currency fluctuations is an easy question to answer: you can't.

"It is a natural risk that exists, but which through mechanisms known as exchange rate insurance you can minimise."

The vast majority of residents of Madrid, 85 per cent, support the bid according to the recently undertaken IOC polls, Madrid bid organisers said.

That compares to only 56 per cent support in Tokyo for its bid.

Figures for the other cities in the race to hold the 2016 Games, Chicago and Rio de Janeiro, were not known, they said.

The 13-member IOC inspection team arrived in the Spanish capital on Monday after already visiting the three other candidate cities, Chicago, Tokyo and Rio de Janeiro.

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