I remember one of those minor news items on the fringes of Eurovision 2012 in Baku. The scandal went that that the Spanish entrant, Pastora Soler, who had been predicted to do well, had been asked by Spanish television not to win due to the costs that they may incur in hosting the following year.
This was an example of sloppy journalism reinforced by sloppy economics.
Firstly, it is one of the oldest myths associated with the Eurovision Song Contest that the winning country is obliged to host the show the following year. The winning country is offered the right to host the following year and has the right to refuse. The fact that this has not happened since the 1970s surely illustrates how lucrative an opportunity at self promotion for a country the Eurovision remains. Anyone working in PR, tourism or marketing would value the kind of exposure the contest offers in tens of million of euro if not arms and legs.
Indeed, if one remembers how dependent the Spanish economy is on tourism one can easily conclude that Spain could benefit hugely from hosting and that the story originally reported above was of course utter nonsense as, indeed, it turned out to be.
This item was also revealing perhaps of a wider issue regarding the understanding of public spending in general. The narrative of the past few years in Anglo Saxon countries has held that public monies are rarely a good return on investment. In the mind of the monetarist, Keynesian style public spending is a road to ruin. It is merely a means of ratcheting up the national debt while having little, if anything, to show for it.
However, even Keynes himself was eager to point out that all public spending must be targeted and strictly monitored. An example of what he was talking about would be the structural funds spent by the European union in the past 30 years. This spending has been highly targeted at certain areas yet this spending rarely rose above a few fractions of a per cent of total European GDP yet as any Irish road user will tell you, the effect of this spending has been immense. It cannot be overemphasised that Keynesianism is not a power hose it is a very discriminate watering can that focuses it’s resources where it will be best used and lead to the best results.
It would make sense in Spain’s case, for example, if they chose to host it in a city that was large enough so it already had the infrastructure to host the contest, but small enough so that it did not already have international exposure and could benefit from an increase in attention. Bilbao or La Coruña spring to mind.
In the event, of course, we know that it was Sweden and not Spain that were triumphant in Baku and indeed, you might say that the Swedes followed the above formula in choosing their third largest city, Malmö, to host for the following year. From a budget of about 150 million SEK, the event generated about 185 million SEK in extra tourism revenues as well as over a billion SEK’s worth of PR for Malmö and the wider Skåne region of Southern Sweden. Solid proof that this is an event worth hosting.
The whole thing reminds me how pervasive neo-liberal thinking is. This consensus has found fertile ground after decades of pork barrel, uncoordinated and to be blunt, bad spending. Examples of positive spending to the contrary such as those outlined above should be emphasised and should be cited more regularly by progressives