ECB Overspends By €400 Million On Luxury Offices As It Preaches Austerity

ECB Architects Plans

While people across the European Union are struggling to survive because of austerity measures imposed by the Troika, desperate to keep the eurozone together at any cost, the European Central Bank is spending over €1.25 billion on a swanky new office.

It’s hypocrisy over spending was revealed in a series of Freedom of Information Act requests by The Times, albeit heavily redacted, which showed the cost ‘ceiling’ for the Bank’s huge new premises in Frankfurt is now over €400 million euro over its initial budget of €850 million, and three years behind schedule.

The new offices will stand at over 185 metres tall, 30 metres higher than the Deutsche Bank towers, the home of Germany’s largest bank, and funded by the same tax payers the ECB preaches austerity to. The Bank has also taken over a 1920s Grossmarkthalle and stands in the district known as Mainhatten, thanks to its proximity to the River Main and the towering office blocks.

The documents show that while the ECB was overseeing cuts in spending even for the poorest in countries such as Greece, which has suffered hugely from being in the moneyary union where policies are determined by what is best for Germany, officials were approving cash injections to complete its lavsh new Headquarters.

On 6th November, project managers went begging to the governing council, admitting its overspend and wanting more cash from the Brussels slush fund. According to the documents, “The current Overall Investment Cost ceiling stands at €1,252 million . . . supplementary funds will definitely be needed soon,” adding, “a single budget increase is preferable.”

Another document revealed concerns by the managers over the “claiming and invoicing behaviour of one of the contractors” which is being looked into. A final cost, it said, would not be revealed until the end of 2014 at the earliest.

The new building’s design began in October 2008 and was due to be completed in 2011. Last November, after a delay of three years, some of the Bank’s employees finally moved in.

While the ECB has taken on new areas of competence, including banking supervision, staff numbers have increased to 2,577. Since the design was only for 2,300 staff, the building was already too small even before it had been built. A further 600 work areas have had to be added to make room for the new staff, so the building can accommodate 2,900 in its workforce and a cost of more than €431,724 per workspace — enough to buy a family home for every employee.

The ECB said that the cost increase was down to the rising price of building materials and “unforeseen challenges” in the conversion of the Grossmarkthalle as well as the need to expand the building’s capacity.

Only days before the managers pleaded Oliver Twist style for more cash, the Bank’s President Mario Draghi was criticised for his “secretive” approach with one source telling the Reuters news agency, “the national governors sometimes feel kept in the dark”.

This has been shown in the Bank’s response to the request for information about public money, with passages explaining the costs of the new building having been redacted almost completely and details on the smoking policy also censored.

In the European Parliament buildings, smoking is permitted even though there are bans across member states for everyone else.

The reason for holding back information on the massive overspend, it says, is because it would be putting itself at a commerical disadvantage rather than other reasons, such as more bad publicity for an EU Institution.

In line with other EU buildings, there is an executive dining room near the top of the building, offering panoramic views for Europe’s monetary union power brokers over all they survey.

Tory MEP Daniel Hannan wrote on twitter:
‘Taxpayers in Greece, Spain etc may be irked to learn that the ECB is spending an unbelievable 1.2 billion euro *on its own offices*’