German central bank scales back HQ revamp, citing costs and home working

BERLIN (AP) — Germany’s central bank is scaling back plans to revamp its Frankfurt headquarters, citing a sharp rise in construction costs and the fact that many of its employees want to continue working from home.

The Bundesbank started work on modernizing its 50-year-old main building in 2022. It said Wednesday that it is “recalibrating” plans to create more room for employees, and will now add only one new building — an office block with about 5,000 square meters (nearly 54,000 square feet) of space.

Bank President Joachim Nagel said that “after the experience of the pandemic, many employees find the idea of being able to continue working flexibly in terms of location appealing.” He said in a statement that, starting in June, the Bundesbank will allow staff to work up to 60% of their working hours from home — reducing the need for office space at the bank itself by about 40%.

The bank also pointed to “the sharp surge in construction costs as a result of pandemic-related supply bottlenecks and the further price rises” that followed Russia’s invasion of Ukraine also were a factor in its decision. Nagel said that “as a public sector institution, the Bundesbank has an especially strong duty to uphold cost-efficiency.”

The European Central Bank, which now sets monetary policy for Germany and the 19 other countries in the euro area, has raised interest rates several times in recent months in an attempt to bring down inflation that is still well above its 2% target.

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