* Watchdog will keep euro zone banks in check
* ECB earmarks 156 million euros in 2015 for 1,000 staff
* Salaries can reach 245,000 euros, ECB says good terms
By John O'Donnell
FRANKFURT, May 27 The European Central Bank will
spend 300 million euros ($410 million) this year and next in
building an elite group to monitor top banks, with the lion's
share spent on generous pay for many of its staff.
While the new watchdog is funded by a levy on the banks
rather than by taxpayers, the wage bill could reignite a debate
about salaries for European Union officials after protest
parties triumphed in elections to the European Parliament in
France, Britain and elsewhere.
For the hiring spree, which has prompted a flood of 8,000
applications, the ECB has a 156 million euro budget in 2015 for
1,000 staff earning low-tax salaries of up to 245,000 euros a
year for the top supervisors.
The new authority in Frankfurt will lead supervision of
banks throughout the 18 countries of the euro zone, overseeing a
clean-up of the sector this year and ensuring that the lenders
blamed for triggering the financial crisis are kept in check.
Revealing the budget for the "Single Supervisory Mechanism"
(SSM), the ECB defended what it called "comparatively good
conditions" as necessary to recruit qualified staff.
"You need to have some good people," said Steven Keuning,
the ECB's budget chief, told reporters on Tuesday. "This is not
amounting to a very lavish bureaucracy."
A further 78 million euros or so will be spent next year on
travel, consultancy and information technology, while 26 million
euros is set aside for premises.
The 'gross salaries and other personnel costs' at the agency
work out at roughly 156,000 euros per person. ECB President
Mario Draghi earned 378,000 euros last year while the watchdog's
chief, Daniele Nouy, does not disclose her salary.
The issue of pay for top European civil servants is
contested while the economy remains sluggish and unemployment in
some countries such as Spain and Greece is at a record high.
"People are being alienated for several reasons," said
Costas Chrysogonos of Greece's leftist Syriza party, who will
join the growing number of critical voices in the European
Parliament following the elections which ended on Sunday.
"There is huge inequality. There are people in Bulgaria who
are paid 150 euros a month for their work. And there are people
in Brussels who are being paid some tens of thousands of euros."
HATS IN THE RING
With the agency's budget set to increase further over time,
its establishment has attracted wide interest from bankers, many
of whom have lost their jobs as the industry slims down.
Barclays, for one, is cutting up to 19,000 staff as the
British group pares back investment banking and embarks on a
revamp. Other banks are also scaling back after the credit
bubble that led to the economic crash burst.
The new ECB watchdog, which will take the pulse of the euro
zone's biggest banks in health checks this year, will be tasked
with restoring shattered confidence in the sector.
For some bankers involved with risk management, for example,
the hiring in Frankfurt offers hope in an often barren jobs
market. Supervisors working for national agencies that are
handing over part of their powers to the ECB are also throwing
their hat in the ring.
The top jobs are particularly hotly contested. In one
instance, 1700 hopefuls applied for 90 high-ranking positions.
The salary scale at the watchdog is the same as at the
European Commission and other EU institutions, which have been
criticised for paying staff too generously while enforcing
budget austerity for member states.
EU civil servants pay special tax rates of between 8 and 45
percent which are also typically lower than national levels.
Many of those who responded to the watchdog's job
advertisements in the Economist magazine, the Financial Times or
on its own website have been women. Nouy has pledged to give
preference to female applicants.
So far, roughly a third of the jobs have been filled and the
arrival of these officials in Frankfurt is already fuelling
increases in rents for upmarket property.
More than 700 of the new jobs will be supervisors with the
remainder support staff.
Sven Giegold, a German Green member of the European
Parliament who helped to create the new scheme of supervision,
defended the costs. "I would rather have a supervisor with good
people than a banking crisis that costs many hundreds of
billions," he said.
($1 = 0.7325 Euros)
(editing by David Stamp)