{"id":95008,"date":"2025-08-19T19:11:13","date_gmt":"2025-08-19T19:11:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/95008\/"},"modified":"2025-08-19T19:11:13","modified_gmt":"2025-08-19T19:11:13","slug":"bundesbank-faces-enormous-cost-overruns-on-refurbishment-of-its-iconic-hq-politico","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/95008\/","title":{"rendered":"Bundesbank faces enormous cost overruns on refurbishment of its iconic HQ \u2013 POLITICO"},"content":{"rendered":"

Meanwhile, the Dutch central bank did<\/a> manage to stick to its \u20ac320 million refurbishment budget, in stark contrast to developments in The Hague, where a similar project for the Binnenhof Parliament buildings ended up coming in at more than four times the initial estimate. And the Central Bank of Ireland\u2019s new HQ also cost a relatively modest \u20ac323 million \u2014 although it got its hands on the property for a knockdown price because its original owner, Anglo-Irish Bank, collapsed in 2009, taking the entire Irish economy with it.<\/p>\n

Building projects and monetary policy are of course two entirely unrelated disciplines, but poor management of the former inevitably invites accusations of incompetence in the latter. Powell and the Fed, in particular, have found out how vulnerable they are to politicians who envy their power over economic policy. President Donald Trump has latched<\/a> onto the Fed\u2019s runaway renovation tab as a new pretext to oust Powell, having been told by the Supreme Court that he cannot fire him over his refusal to cut interest rates.<\/p>\n

In a single social media post this week, Trump showed how easy it is to conflate the two, urging<\/a> Powell to cut interest rates \u201cNOW\u201d and threatening him with a \u201cmajor lawsuit\u201d because of alleged poor management of the building project.<\/p>\n

The stakes are almost unimaginably high. For decades, both academic research and real-world experience have shown that central bank independence is unrivalled in keeping inflation down and building the foundation for sustained growth. However, that doctrine has come under fire after the worst global bout of inflation in 40 years, which has only subsided gradually. To make things worse, the Bundesbank project has gone sour just as it has booked a series of massive losses<\/a> thanks to years of zero interest rates and bond purchases by the ECB.<\/p>\n

When the Bundesbank moved into temporary offices at the start of this decade, journalists joked it wouldn\u2019t be the ECB\u2019s bond-buying spree that cost it its independence \u2014 as Weidmann had long warned \u2014 but the renovation project.<\/p>\n

Germany\u2019s current political realities make a Powell-style public assault on Nagel unthinkable \u2014 for now. But the country\u2019s trust in its institutions is fraying<\/a>, and Nagel himself has warned<\/a> that undermining the Fed could reverberate far beyond the U.S. The venerable Otmar Issing, formerly chief economist of both the Bundesbank and the ECB, warned<\/a> last month that independence \u201cis a historical exception and could be reversed by a change in the political climate.\u201d<\/p>\n

Recognizing its explosive potential, Nagel assumed direct responsibility for the project relatively quickly after taking office in 2022 and is now conducting a feasibility study of the entire project in line with the Federal Audit Office\u2019s recommendation. But it\u2019s far too early to tell whether that will ultimately protect him and his institution: The building process is scheduled to run another 10 years.<\/p>\n","protected":false},"excerpt":{"rendered":"Meanwhile, the Dutch central bank did manage to stick to its \u20ac320 million refurbishment budget, in stark contrast…\n","protected":false},"author":2,"featured_media":95009,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[1532,14955,28,15034,19232,12514,12,101,6797,2402,1923,64375,2938,64376,9335,27829,21],"class_list":{"0":"post-95008","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-banks","9":"tag-buildings","10":"tag-business","11":"tag-central-banks","12":"tag-conservation","13":"tag-construction","14":"tag-donald-trump","15":"tag-economy","16":"tag-germany","17":"tag-inflation","18":"tag-ireland","19":"tag-jens-weidmann","20":"tag-jerome-powell","21":"tag-joachim-nagel","22":"tag-monetary-policy","23":"tag-renovation","24":"tag-united-states"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/95008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=95008"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/95008\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/95009"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=95008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=95008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=95008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}