An Olympic torch has been lit in Azerbaijan; an Olympic stadium has been opened in Baku. All seems ready for the June 12 opening of the inaugural European Games, a mini-Olympics for European states. There is only one big question still hovering over the event: how will Azerbaijan pay for it all?
As the South Caucasus’ wealthiest country, energy-rich Azerbaijan did not have to worry much about paying the bills – until recently. The slump in global oil prices has put a crimp in the country’s budget. In February, authorities felt compelled to devalue its currency, the manat, by a whopping 33.5 percent against the dollar and 30 percent against the euro.
That means less cash on hand for pet projects like the European Games. Azerbaijan receives well over half of its 19.4-billion-manat ($24.7-billion) state budget from oil-and-gas revenues. Budget calculations for the Games were made at a time when oil prices stood closer to $110; Brent crude oil, the baseline for the oil-market, currently stands at about $65 per barrel.
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Emanuele Giulianelli provided reporting for this story.