Greek deputy Development minister Notis Mitarakis has stunned economic observers by agreeing to plough around €30 million of subsidy into the construction of a €100m racetrack near Patras, Western Greece, which could be used to hold Formula 1 events.
Now heading towards its sixth year of recession, and under EU pressure to deliver continuing – and increased – austerity in order to pay down its national debt, Greece has also released funds worth €44m to build a glass factory in the North, and to expand a luxury palace hotel in Crete.
Observers in the rest of Europe, who are midway through loaning the stricken country up to €130bn, have reacted with shock at the apparently superfluous nature of the spending; after all, Greece currently has no deal in place to stage any forthcoming Formula 1 events – although the circuit would also be capable of hosting world championship motorbike racing and go-karting. Nonetheless, officials have defended the move, claiming that stimulus is needed to boost the stagnant economy, and that the projects will create a total of 800 badly needed new jobs in a country where unemployment is nearing 25%.
The project’s funding has been approved at a time when austerity has come in for tough scrutiny, with debate raging in the UK in particular about whether it is an effective driver for growth. But perhaps the people of Greece will be glad that, even if their debt problems haven’t disappeared by the time the course is complete, they will at least have some top quality motor-racing to take their minds off their problems.