This month will see Euro 2012-related activity in Lviv rech a fever pitch as city officials work to meet UEFA’s tough 30 November deadline. In April 2007 Ukraine and Poland were designated as sites to co-host the UEFA European championships in 2012. This decision is monumental on two fronts.
First, it marked the first occasion since the fall of the Berlin wall 20 years ago where the UEFA championships would be held in two countries formerly belonging to the communist camp. Second, for Ukraine still a fledgling democracy belonging neither to the EU nor NATO, it was one of the biggest single achievements since it gained independence 18 years ago. The challenge now is to make sure Lviv is selected as a host city.
The Euro dividend
Experience has shown that large international sports events such as the Olympic Games or football championships bring significant benefits to its host countries by way of FDI, infrastructure development grants and the positivespillover benefits gained from a growth in tourism, the creation of jobs in the construction and service industries. If we look at some of the impacts of holding the UEFA Euro championships in previous years, one can see that for Switzerland, which hosted the event in 2008, it proved to be the biggest sports event ever held. The overall direct and indirect economic impacts were substantial, boasting a turnover totaling around CHF 550 million and a gross value added of about CHF 320 million. In the case of Portugal in 2004, statistics show that the National Gross Product of this country grew by 0.02 to 0.1% thanks to the event which only lasted a few weeks.
These financial track histories are very encouraging for Ukraine, notwithstanding dissenting voices which negatively assess the impacts of large international sports events on host country economies arguing that events of this nature often do not meet forecasted returns on investments and do not bring long-lasting and sustainable impacts. However, despite these varying opinions, in the case o Ukraine an opportunity to host the football championships can only be viewed through a positive prism because the event will create opportunities that otherwise would not exist under normal circumstances in light of Ukraine’s current political instability, struggling economy and depressed employment market.
Thanks to Euro 2012 Ukraine expects to see additional investments of USD 7 billion into the country’s economy, which will be forwarded to construction of highways, stadiums, airports, hotels, railway reconstruction, technical refit of local TV and radio companies, reconstruction of student dormitories, creation of modern public transportation systems, as well as development of essential infrastructure in the chosen host cities. This is an important opportunity and catalyst for Ukraine in its overall modernization seeing that over its 18 years of independence little attention has been spent on these important projects by all subsequent governments.
Euro 2012 is also important for Ukraine and Poland alike, beyond the financial returns, as it will allow both countries to establish even closer relations as partners in business and international relations, allow them to showcase their countries to rest of the world and secure a leap forward in the standards of life for their citizens.
A cure for regional unemployment?
This is good news for Lviv as the labour market will be able to heave a sigh of relief with its promise of new jobs. According to Mr. Stepan Lukachek from the Lviv Oblast Administration, works on a new stadium and infrastructure will create between 3000 new jobs and another 3000 jobs will be created in building a new airport in Lviv. Another 3-4000 new jobs will be created in engineering networks, setting up communications and building new roads. In total another 25, 000 jobs could be created in Lviv as a result of the championships. Lukachek also indicated that another 5000 new jobs will be created in the service sector. This is an opportunity that Lviv cannot afford to miss out on, but at the same time the question of whether Lviv will be able to respond with the required personnel to complete the works required still remains to be seen.
The unemployment figures in western Ukraine hover at around 10% but whether this category of people will be able to step into these new positions is still an open question. Lviv has placed a large bet on its citizens currently working abroad returning home and joining the labour force (approximately 1 million Ukrainians are reported to be working in Russia alone). At the same time, Ukraine will be in stiff competition with Poland for workers, as Polish wage rates are more competitive. Lviv will also benefit from the influx of tourists and new vacancies will need to be filled in the sectors of hospitality and services. However, the point here really is whether Lviv will be ready to provide services to international tourists in English, which will be the primary language of interaction, and will the service standards be on par with international standards.
Lviv hoping to win UEFA favour
It must also be noted that on 13 May 2009 the UEFA Executive Committee made a few key decisions concerning the selection of host cities for Euro 2012. This included not confirming Donetsk, Lviv and Kharkiv as host cities for group matches of Euro 2012 for the time being as progress had fallen behind benchmark dates. However, a last deadline has been granted to these three cities to meet specific conditions by November 30, 2009 with regard to the stadiums, airport infrastructure, regional transport and accommodation. In light of the overwhelming opportunities, Lviv has no choice but to pull up its socks before November 30 if it wants to cash in on the Euro 2012 football championships and what it will mean for the region.
It must move quickly on its infrastructure projects and find the necessary funding to finish them off before the deadline runs out. It will also need to hire and train the right people to host the influx of tourists who in fact will multiply information about Ukraine abroad. Word of mouth is known to be stronger than any paid-for advertisement and is more resilient than any other.
Let us hope that Lviv can meet the challenge, show that it is a word-class city and give itself the opportunity to move forward despite all of the challenges on its way.
