German central bank abandons controversial overhaul

The enormous 1970s brutalist concrete building had become synonymous with the Bundesbank and was said to reflect its culture of fostering economic stability.

The planned overhaul envisaged adding new buildings to create a campus. Some 170 million euros ($196 million) had already been spent, including on removing asbestos, and the bank had relocated temporarily to different offices in downtown Frankfurt.

But criticism mounted over the costs, and the case took on echoes of the scandal in the United States over the expensive overhaul of the Federal Reserve's headquarters.

Controversy had mounted after Germany's top audit authority last year estimated the total cost would come in at 4.6 billion euros. The Bundesbank later scaled back the projected costs, but this did little to blunt criticism.

Announcing the change of plans, Bundesbank chief Joachim Nagel said an analysis had shown that buying a new building made more sense than proceeding with the overhaul.

The decision was not easy, he said, noting that "many people -- active and former colleagues, residents of the city and the country -- have a connection to this building".

Officials now hope to convert the building into a new site for the European School Frankfurt, whose pupils are mostly children of staff at the Frankfurt-based European Central Bank and other EU institutions.

Gold reserves currently held in the Bundesbank's vaults will however remain on site.

The ECB, which sets monetary policy for the eurozone, and Frankfurt city announced the plan to transform the 10-hectare site into a new campus to replace the current European school, which is overcrowded.

Officials hope the new school can be opened in four to six years.

ECB President Christine Lagarde hailed a "breakthrough", which would "allow the European school in Frankfurt to bring together on a single campus all levels of education".