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23rd May 2022

EU Parliament pays close to double market price for building

  • The European Parliament's building strategy seeks to purchase and connect its buildings - likely driving up real-estate prices for nearby premises (Photo: Lisbeth Kirk)
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At €74.9m the European Parliament may have paid close to double the market price of a building - as part of a cost-cutting exercise.

"We know that the estimated market value of the building was between €42 and €65 million but we paid €75 [million] for the acquisition," German Green MEP Daniel Freund said on Tuesday (25 January).

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The Wiertz building, since renamed Scholl, is located at the European Parliament in Brussels and is mostly used by MEPs and group staff. The purchase was voted through by the budget committee in December 2020 with knowledge it was above market value.

French liberal MEP Fabienne Keller informed the committee at the time, prior to the vote.

"We have seen, thanks to an independent study, that the purchase price is above market prices," she had said, noting that negotiations for the deal had also been rushed.

Of the 35 MEPs sitting on the committee, only three voted against pushing the deal through. Separately, they had also agreed to spend some €4m a year leasing out buildings in Rome's Piazza Venezia and in Paris to promote European identity.

In a statement, the European Parliament's press services defended the Scholl purchase. It says it was needed to safeguard existing investments already made by the parliament.

"The purchase price can be considered as an acceptable outcome of negotiations," it stated. "After negotiations, the offer was considered the best one in terms of cost/benefit analysis," it added.

Portuguese centre-right MEP José Manuel Fernandes also defended the deal. "The initial price was actually reduced by €8m," he said.

But, with the staff and MEPs teleworking due to the pandemic, the issue has led to calls for the EU parliament to revise its building strategy on purchasing property.

"I think basically that strategy needs to be reassessed under the new working conditions with teleworking," said Freund, who is also the lead MEP on the parliament's budget.

"There are hundreds of desks and offices that remain empty," he said, posing questions on whether seating arrangements could actually reduce office space.

"If you have two people that work three days a home a week, two of those people can basically share one office," he said.

The building strategy was drafted by secretary general Klaus Welle and endorsed in 2018 by the Bureau, composed of the parliament's vice presidents. Among the vice-presidents is German centre-right MEP Rainer Wieland, who chairs the building working group.

Earlier this year, the Guardian newspaper revealed Wieland had spent €486,011 on a state-of-the-art office on the 15th floor of the European Parliament. Wieland described it as an "ideas laboratory", complete with doors costing €25,000.

Wieland and Welle are said to work closely together on such issues, including the building strategy. But defenders also point out the purchases have saved on rent.

Leena Maria Linnus, who oversees the parliament's buildings, estimates almost €1bn had been saved since the late 1990s. "Parliament has always taken a line to favour purchase over renting as regards real-estate," she said in a budget committee meeting in 2020.

By comparison, the European Commission rents out most of its buildings and plans on closing half of its 50 office buildings across Brussels by 2030.

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