EURO 2012: SOCCER ORGANIZER SHOWS UKRAINE THE YELLOW CARD

UNCLAS SECTION 01 OF 02 KYIV 000940

SIPDIS
SENSITIVE

DEPT FOR EUR/UMB, EUR/NCE, EUR/ERA, EB/CIP,
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYK

E.O.: 12958: N/A
TAGS: ECON EFIN ECPS BEXP EINT UP

SUBJECT: EURO 2012: SOCCER ORGANIZER SHOWS UKRAINE THE YELLOW CARD

Summary
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1. (SBU) Ukraine is in danger of losing the prestigious 2012
European soccer championships, which it is to co-host with Poland.
Games were to be played in four Ukrainian cities, but the UEFA,
Europe's ruling soccer body, has announced that only Kyiv is on
track to be a host, and that its role could be reduced if it does
not meet key planning deadlines by November. Other Ukrainian cities
will be struck entirely in November if they fail to make progress
preparing the necessary infrastructure to handle the large inflow of
visitors that are expected for the month-long spectacle. Planning
for the event has fallen victim to a lack of organization, weak
political leadership, and a dearth of financing in the wake of the
economic crisis. Losing the games would deny Ukraine an opportunity
to showcase itself to Europe, and further damage the country's
already tattered image across Europe. End summary.

Ukraine's Chance To Showcase Itself to Europe
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2. (U) In April 2007 the Union of European Football Associations
(UEFA) awarded the European 2012 soccer championships to Ukraine and
Poland. The nearly month-long spectacle, featuring the 16 best
national teams from throughout Europe, is the third most popular
sporting event in Europe after the summer Olympics and the soccer
World Cup. It is expected to attract over a million visitors, and
hundreds of millions of television viewers in Europe. Eight cities
- four in each country - were scheduled to host games, and Kyiv was
to host the final.


3. (SBU) In Ukraine, billions of dollars of investments are
necessary to modernize stadiums and key infrastructure such as
airports and roads and to increase hotel space and other services
for tourists. To date, upgrades at several airports and stadiums
have begun. Overall, however, relatively little progress has been
made due to poor overall management of the project, political
infighting between the President and Prime Minister, and dwindling
sources of funding on account of the economic crisis.

UEFA Shows Ukraine the Yellow Card
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4. (SBU) Until recently, the UEFA had been guarded in its public
comments on the slow progress in Ukraine, although it reportedly
articulated its concerns to PM Tymoshenko and to President
Yushchenko during its many inspection trips to Ukraine over the past
year. In May, however, it finally admitted what many in Ukraine and
abroad had already known -- that the country's preparations for the
games were at best piecemeal and far behind schedule.


5. (SBU) On May 13 UEFA's Executive Committee announced that, of all
Ukrainian cities, it would only commit to allowing Kyiv to host
games. At the same time, it confirmed that four Polish cities were
on schedule to serve as hosts. UEFA even threatened to reduce
Kiev's role in the games, saying that Kyiv would only get the final
match if the city meets UEFA's conditions related to airport
infrastructure, regional transportation, hotels, and Kiev's Olympic
stadium by November 30. Otherwise it will lose the final to Poland
and only host one semi-final and several first round matches.


6. (SBU) The UEFA also announced that three other potential
Ukrainian host cities -- Donetsk, Lvov, and Kharkov -- would not
host games at all if they failed to meet the UEFA criteria by the
end of November. It also dropped two cities -- Dnepropetrovsk and
Odessa - that had previously been in the running. The decision
could mean that, should Ukraine fail to fulfill UEFA's expectations,
the country would only play a minor role in the games. The UEFA did
not say what would happen if Kyiv and the other cities fail to meet
its expectations, yet it is widely assumed that all the games
originally foreseen for Ukraine will be held in Poland.


7. (SBU) Prior to the vote, Yushchenko and PM Tymoshenko assured the
UEFA in a joint letter that Ukraine would fulfill the commitments it
made when it received the nod to host the games in 2007. The letter
does not appear to have swayed the UEFA and its director, former
French soccer star Michel Platini, who had regularly called on both
Yushchenko and Tymoshenko during previous inspection visits to
Ukraine.


8. (SBU) According to press reports, the UEFA has now given all four
Ukrainian cities checklists of what needs to be done by November 30.
In his comments to the press after the May 13 announcement, Platini
spoke of "numerous infrastructure issues that urgently need to be
resolved." The UEFA reportedly also informed Ukraine's organizers
that immigration procedures needed streamlining during the games,

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and expressed concerns about plans for sky-high hotel prices for
rooms during the championship.


9. (SBU) Following the UEFA announcement, Yushchenko, Tymoshenko and
other leading government officials all expressed confidence that
Ukraine would meet the November 30 deadline, yet failed to announce
any significant revisions to the existing planning. Financing both
public infrastructure projects and hotel construction will pose a
significant challenge for the country, as the economic crisis has
dried up sources of both domestic and international funding. The
2009 budget earmarked practically nothing for infrastructure
investment, and investment in real estate projects has nearly
stopped.

Comment
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10. (SBU) A project on the scale of Euro 2012 requires long term
administrative planning and coordination, strong political
leadership and significant financing, all of which are in short
supply in Ukraine at the moment. Progress has been made on some
airport and stadium construction, and most commentators agree that
Ukraine still has a chance to meet the UEFA's expectations if it
acts quickly and with determination. Since the May 13 announcement,
however, a new sense of urgency with regard to Euro 2012 is not
palatable in Ukraine, and the country is in danger of losing a
significant opportunity to showcase itself to Europe and to attract
investment at a time when the country desperately needs it.

PETTIT