Euro 2012 to leave a more valuable legacy Five years ago, when Poland and Ukraine were granted the right to co-host the 2012 European football championship, the fear of looking like a pair of backwater states in the eyes of the watching world pushed both into a spending spree. Ukraine splurged approximately $13bn on projects linked to the tournament, while Poland spent about $25bn. The question now is was it worth it? Large sports events have a habit of leaving behind herds of white elephants in the form of expensive but empty or underused stadiums, with governments struggling to recoup their investment. But both Poland and Ukraine spent much more on roads than they did on sporting venues, leading some to praise the new infrastructure as a legacy worth having. "The economic benefit of Euro 2012 for Poland and Ukraine is more significant than is usually the case with major sporting tournaments," according to Capital Economics, a consultancy. Poland has long had some of the worst transport infrastructure in the EU: slow railways, dilapidated train stations, crumbling airports with no easy road access to nearby cities and, crucially, a dearth of proper highways that forces traffic to clog up narrow roads running through towns and villages. Robert Dobrzynski, managing partner for central and eastern Europe for Panattoni, a logistics company, says Poland often lost business to better connected countries such as Hungary and the Czech Republic. "In many cases Poland would make sense as a [business] destination, but the quality of infrastructure was so [poor] that investors would go elsewhere," he says. In 2007, Poland had just over 800km of modern highways. Today, it has more than 2,000km and by 2015 it should have about 3,000km. Without the spur of Euro 2012, it would have taken years longer for these projects to be completed, according to Marcin Herra of PL.2012, the government body responsible for preparing Poland for the tournament. "These are investments that change the quality of the functioning of a country," Mr Herra says. The government estimates the economic impact of the tournament at about 2 per cent of gross domestic product. In Ukraine, the disintegrating Soviet-built transport infrastructure has been overhauled in the four cities hosting matches - Kiev, Lviv, Donetsk and Kharkiv - including upgraded airports and repairs to thousands of kilometres of potholed roads. "As far as infrastructure goes, Ukraine has changed noticeably," says Borys Kolesnikov, Ukraine's deputy prime minister in charge of Euro 2012 preparations, and he claims most of these infrastructure upgrades will pay off in broad economic terms. Some of the economic boost is supposed to come from an influx of tourists - both countries are hoping for about 1m additional visitors. But Ukraine has a reputation that is likely to stymie some of the expected benefits. "The influx of foreign visitors and a massive infrastructure upgrade are not likely to generate a sizeable positive effect for the Ukrainian economy in the long run unless the business climate and Ukraine's international image improve considerably," concludes an analysis by Austria's Raiffeisen bank. Ukraine has been harmed by the negative publicity surrounding the case of Yulia Tymoshenko, the former prime minister serving a seven-year jail sentence on abuse of office charges. She has attracted widespread support from west European politicians worried about the atrophy of democratic freedoms. In addition, the biggest contracts for Euro 2012-related projects have been mired in allegations of corruption and fraud, particularly the single-bid construction contracts given to private companies. Despite government denials of wrongdoing, Ukraine spent about double what Poland did to build new stadiums and reconstruct existing ones. "These large expenditures created vast opportunities for corruption and fraud," Raiffeisen wrote in its report. Ukraine did not get the kind of help that Poland received from the EU, forcing the government to shoulder much of the load. But Tomas Fiala, chief executive of Kiev-based investment bank Dragon Capital, said Ukraine's total public debt - expected to stabilise at about 36 per cent of GDP by next year - remains low compared with emerging market peers. While the macroeconomic effect for Poland is positive, the consequences for the country's construction companies are much more grim. Three large contractors and more than 100 smaller ones have gone bankrupt this year - largely because they engaged in a price war to win public tenders and were then whipsawed by fast rising fuel, steel and asphalt prices.