"The Games can revive a struggling economy like Spain's," Coe said in an interview with Efe, the Spanish-language news agency.

"The economic and emotional benefits are huge."

But doubts continue to grow over how Spain could afford to host the Games after official figures showed that unemployment has jumped to 24.4 per cent in the first quarter of 2012 - the highest rate in the 17-country Eurozone - from 22.9 per cent in the fourth quarter of last year.

The data show that another 365,900 people lost their jobs in the first three months of the year, taking the total unemployed to 5.6 million.

The rate for people under 25 year is now 52 per cent, up from 48.5 percent in the previous quarter.

"The figures are terrible for everyone and terrible for the Government," said Spain's Foreign Minister Jose Manuel Garcia-Margallo.

"Spain is in a crisis of enormous magnitude."


The total figure for people unemployed increased by 729,400 compared to the first quarter of 2011.

The National Statistics Institute said Spain now has 1.7 million households in which no one has work.

The figures were another blow to the conservative Government after Standard & Poor's (S&P) became the first of the three leading credit rating agencies to strip Spain of an A rating.

It cited a worsening budget deficit, worries over the banking system and poor economic prospects for its decision to reduce the rating by two notches from A to BBB+.

S&P even warned that a further downgrade is possible as it left its outlook assessment on Spain at "negative".

Spain, the Eurozone's fourth-largest economy, is just now just three notches above so-called junk status.

But Coe claimed the Olympics could help revive Spain's fortunes.

"Some £7 billion (£11.4 billion/€8.5 billion) have been invested in London in the last few years through contracts that have gone to British companies, this at a time when both the UK and global economies have been hit by the economic crisis," the two-time Olympic 1500 metres champion told Efe.

"The construction of the Olympic Park [in Stratford, East London] has generated 40,000 direct and indirect jobs.

"Many companies all over the UK have benefitted from these contracts and have created new employment opportunities.

"At a time when there's not a lot of optimism around and the world is seen as a complex place, the Olympic Games give people something they can enjoy and get involved in."

Coe has long been close to Spanish officials, being a personal favourite of Juan Antonio Samaranch, the late President of the International Olympic Committee. 

Indeed, in 2003, he was approached by Madrid to work on their bid for 2012 before he was given an official role by London but turned the down offer.

Spain's economy situation is far worse than that faced by Italy, whose Government refused to back a proposed bid from Rome 2020, but Coe insisted that Madrid was right to continue with its campaign, where they are facing rivals Baku, Doha, Istanbul and Tokyo,

"It wouldn't be right for me to get involved in Spanish politics, but it's good that the Olympic budget has been left untouched at what is a very tough time for the world economy, when the public sector and companies are going through difficult times and the Government is making some tough decisions," he said.

Britain's own economic situation is far from stable with the country officially entering into a "double dip" recession this week.



But Coe (pictured with Theresa Zabell, the chief executive of international relations for Madrid 2020) claimed that things could be even worse if it were not for London 2012.

"Back in 2005, when the venue for this summer's Olympics was chosen, none of us knew the importance of these Games," he said.

"In creating so many jobs and so much activity in an economy that's in the doldrums, you're performing a service to society.

"If you look at the investment in East London, you'll see that the area has been regenerated with new stadiums that weren't there before, and with new infrastructures etc.

"I see it as an investment in the community, and that community will reap the benefits for many years to come.

"In London we now have 750,000 more teenagers playing sport, a figure you just wouldn't have seen before we started bidding for the Olympics.

"I don't see it as a way of making or losing money.

"I honestly don't.

"There financial returns are huge, but there's an incredible emotional legacy too."

Contact the writer of this story at [email protected]


Related stories
April 2012: Madrid 2020 bid boosted by support of IPC President
April 2012: Cities bidding for 2020 Olympics launch international campaigns
April 2012: Madrid 2020 tries to reassure WADA that Spain is tough on drugs in sport
March 2012: Barcelona 1992 medallists back Madrid 2020 bid at special gathering
February 2012: Baroness Tanni backs Madrid bid for 2020 Olympics and Paralympics