Practice as You Preach? New ECB Headquarters Over Budget – Business News – CNBC
Preaching austerity is easy, but the European Central Bank ECB has found that it can be difficult to put the virtue in the practice.
The ECB on Thursday announced a significant overrun in the cost of its new headquarters, due for completion in 2014. A series of mishaps—an inconclusive tender process and a failure to identify structural problems in the new site—has pushed the final bill to as much as 1.2 billion euros ($ 1.56 billion), up from an original estimate of 850 million euros.
The EBC has laid out less than half of the projected total cost, raising the possibility that the total bill could rise further. The new headquarters will accommodate a 40 percent expansion of current personnel. The ECB declined to comment on hiring plans, but any move to expand the ECB’s role in bank supervision would require staffing increases.
Funding for the new premises comes from the ECB’s profits on its investment earnings and interest income. That could include revenues earned through bond purchases intended to dampen interest rates in highly-indebted euro zone countries.