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The Ukraine and Poland Post Euro 2012 - The Economic Future

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After the all too familiar sight of our national team crashing to another quarter-final defeat on penalties, we can put away our flags and car stickers, shove the vuvuzela to the back of the wardrobe and wait patiently for another 24 months before another gallant attempt is made in the 2014 World Cup. Meanwhile at least we have the Olympics to look forward to!

The international impact of international sporting contests is an established fact, long understood by politicians and economists. Yet could these latest championships have the biggest effect yet? Will Euro 2012 deliver an Eastern European 'Barcelona effect' dragging Ukraine and Poland out of their Soviet past and propelling them into 21st century tourist destinations? Or will the investment made run out of control and the organisation unravel with the same humiliating consequences that so embarrassed the Greek Olympics in 2004? The failure of those Games was a dark and unheeded warning of the desperate problems besetting Greece which have now coalesced into the perfect financial storm, bailout and possible exit from that other Euro - the single currency.

I recently visited Eastern Europe on a non-football trip in order to get a sense of how the new tourism market is shaping up and of the wider potential benefits that the Euro 2012 Championships, just ended, may bring.

Euro 2012 was clearly a catalyst for a great deal of much needed infrastructure projects with more than 73% of Ukraine's UEFA Euro 2012 investment heading to the transport sector. Meanwhile Poland has spent zł 110bn (about £21bn). Investments include new airport terminals in each host city, a modernised international feel of Poland's train stations, new high speed rail linking the host cities of Kiev, Lviv, Kharkiv and Donetsk; and the countless hotels sprouting across both countries. According to a London-based economic consultancy, Poland has, via state and private investments, pumped about £20bn since 2008 into infrastructure upgrades. That is equivalent to 1.3 per cent of annual GDP. Ukraine has injected less, some £9bn, but is equivalent to 1.7 per cent of its annual GDP.

This investment is highly visible in the train stations of Poland (particularly Warsaw and Krakow) which have become anglicized hubs for the international community: Signs and announcements in English make it possible for even us monolingual 'Brits' to get around and master the station ticket machines - even if they were slightly in short supply. There were plenty of ASDA style 'happy to help' volunteers, aptly dressed in green, offering advice even on non-footballing matters. The volunteers displayed more national flags pinned to their chests signaling the languages they spoke than the medals of any Soviet tank general. And it is not only the trains which have improved to accommodate an array of international visitors. The bus and tram systems have also undergone sweeping facelifts making it far easier to get to your destination, especially if it is a stadium; navigation in Poland was much easier than I remember it being in Germany in 2006. There also appeared to be additional way-posts and information points established to deal with the greatly increased number of visitors. The hotels also enjoyed catering for international guests, with visitor guides and 'what's on' booklets in the rooms, whilst inevitably cashing in on the extra demand for rooms.

With such large infrastructural projects underway or complete, it certainly makes it easier and more efficient for tourists to get around, essential when considering the pre-game estimates that each nation will receive an additional 1 million more tourists. The positive impact on Poland's and Ukraine's GDP could be an additional 0.2% and 0.4% respectively. However, post games analysis suggests that the number of tourists will be closer to 1.4 million (a tournament record), and it is reasonable to suppose that these investments have encouraged this growth.

But high investment walks hand- in-hand with high risk. Both Poland and Ukraine need these games to be a commercial success or risk the start of a potential 'Athens 2004' chapter on "how not" to host an international sporting event. Ukraine's public debt stands at about £39bn and the cash-strapped government faces more than £6bn in debt obligations this year alone which has left some nationalists questioning the Euro 2012 spending splurge.

How will this investment hold out in the post games era? I do not think that the two countries are likely to see an influx such as that experienced by Barcelona after the 1992 Olympics (more than 100% increase over a 10 year period). However, there is little doubt that there will be an increased interest in visiting the two host nations. TV companies have done their bit by placing media stands outside some of Poland's iconic, and in the case of Krakow, original old town monuments and buildings fully displaying its rich history: similarly with Ukraine. Such images help steer the mind away from the Soviet monolithic memory.

It has not been all good news flowing out of the east, with over inflated accommodation, some reports suggesting the devoted and loyal football fans were asked to pay up to £560 per night and the UEFA President described the hotel owners as "bandits and crooks". However I saw no such problems with an excellent room in the heart of Warsaw costing me £50 and in Krakow around £30; I challenge anyone to find that in central London or the Ille de Paris.

More important than the room prices, it is hard for one to ignore the political situation, with the ongoing trial of the former Ukrainian Prime Minister Yulia Tymoshenko and the arrest of Poland's leading businessman on charges of corruption. This coupled with the racism and violence issues reported in Ukraine which have been splashed across the front pages of every paper from The Sun to the NY Times and the Wall Street Journal. One publication went as far as describing it as "war without guns". Moreover, fans were advised not to visit the tournament by an ex-England captain fearing it would be too dangerous; however this did not seem to deter many visitors and there have been no major racial or inter-nation violence reported during the tournament (though of course any such trouble is too much).

Now the European Championships are over, how much will Poland and Ukraine benefit from being at the centre of football's second most prestigious tournament? Surely the global television exposure; the millions of fans who visited; the UEFA investment and the enhanced infrastructure, which both countries now enjoy, can only be a good thing, right? I do hope people go to visit these two countries as they have so much to offer. And I hope these countries grasp the opportunity they have been offered and continue their internal investment plans to their own benefit - and to ours.