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UEFA Development

Political Stability | Economic Overview | Business and Regulatory Environment | Working Within the System |


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The decision to hold part of the UEFA Euro 2012 football championship in Ukraine was made in 2007, when the Orange Revolution was still fresh and the West assumed Ukraine was going to fall into its fold. Since the shift to an anti-Western government in 2010, there is a lingering level of resentment in Europe about the games being held in Ukraine.

 

Generally speaking, UEFA-stipulated infrastructure requirements have caused Ukraine to go into overdrive. Ukraine expects more than 600,000 tourists to visit Ukraine for the games. Most new infrastructure will be modern roads and rail connections from the Ukrainian border to all the host cities (Kiev, Donetsk, Kharkov and Lviv). The wave of new construction also includes hotels (70 are planned for Kiev alone), airport upgrades in each host city, restaurants and large stadiums.

 

There is concern that Ukraine will not complete any more of the planned infrastructural expansion, upgrades or new construction than the minimum requirement called for under the UEFA regulations. One problem for all the construction projects is the permitting structure mentioned above. As it is, most of the required projects are far behind schedule, and sponsors are concerned that some may not be completed by the time the games begin.

 

The government master plan has changed more than 20 times since 2010. Actual financial figures surrounding the plan are hard to come by due to lack of government transparency. The Ukrainian Finance Ministry estimates that the government spent roughly $3.5 billion on Euro 2012-related projects from 2008 to 2010. Over the next two years, the latest government plan released in April indicates that taxpayers will spend $7.2 billion, though independent estimates are closer to $12 billion. Another $7.5 million will come from city coffers and “other sources” of financing. Roughly 70 percent of these other sources will be public or semi-public companies, namely the state railway company Ukrzaliznytsia ($2.2 billion) and the state roadwork company Ukravtodor ($1.1 billion). (The latter is also expecting some $2.5 billion in government orders.) The government is hoping to cover part of the bill with borrowed money (mainly Eurobonds and low-interest loans from Japan and China).

 

For a government already in dire financial straits, the UEFA games are an incredible burden. Over the long term, however, the construction projects that are completed will be a boon for a country that has lagged behind in modern infrastructure development. There is hope that the new transit links will also help spur trade into and across Ukraine.

 

Security during the games will be a major issue. Traditionally, the European games are much more rowdy than the World Cup because football hooligans and skinheads can travel more easily on the continent than they can around the world. Past UEFA games in England and Portugal saw thousands of incidents of violence and property damage, mainly fights between rival spectator groups, broken windows and a car turned over here and there. Thus far, Ukraine has not planned to implement any alcohol restrictions, which tend to fuel such violence.

 

 

 


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