A decade after rescuing Greece from default, the European Central Bank has launched a very different bailout.

This time it is acting in its own backyard, providing €6.9mn of emergency funding to Frankfurt's oversubscribed European School after the city's council failed to deliver on promises to find a new site.

The affair risks further tarnishing Germany's reputation as the country, once synonymous with reliability and precision, struggles with delayed trains, crumbling bridges and slow-moving bureaucrats.

Founded in 2002 shortly after the start of the ECB, the European School is part of a network of 13 institutions that offer a multilingual education for the children of EU officials, but it has long outgrown its dated premises.

For more than a decade, the City of Frankfurt has been struggling to meet a contractual obligation with the ECB and the government of the state of Hesse to find an area for a larger school building, with no solution in sight.

The old premises have become more crowded by the year. Originally planned for 800 pupils, the school now has close to 1,700 children and is expected to attract another 800 by 2032.

The ECB has provided the €6.9mn as a stop-gap to fund a cluster of new containers that have been turned into 10 additional classrooms and staff offices. Some of the cash will be reimbursed by Germany's federal government.

"This is embarrassing," ECB President Christine Lagarde said when she visited the new containers on Wednesday. "I insist on the temporary aspect of this solution."

Others have also criticised the situation. The "health, safety, and wellbeing of pupils and staff is at risk", said Andreas Beckmann, secretary-general of the European Schools, a body that oversees the 13 international schools.

An area to the north of the ECB's headquarters was a core promise in Frankfurt's successful pitch to host AMLA, the EU's new anti-money laundering authority which will have 400 staff in Frankfurt by 2028.

But political support for the site dwindled after local protests over the relocation of a popular local funfair that currently uses the area twice a year.

"I supported the mayor of Frankfurt when he tried to get AMLA to Frankfurt," Lagarde said on Wednesday, adding that her support had partly rested on the city's promise that good schooling would be available for kids at the European School.

One Frankfurt insider who has been closely following the local debate said the long delays were an example for the "dysfunctionality" of local politics in Germany.

"The city of Frankfurt has so much egg on its face," the person said, adding that it corroborated the impression that "nothing is working in Germany any more".

But the person added that schooling for the children of expats was seen as a "rich people's problem" by many local policymakers and hence not a top priority.

While the bulk of the school's pupils are kids of parents working for the various EU institutions in Frankfurt, one-fifth are local children, its director Anastazija Avsec told the Financial Times. "We would love to take on more but just don't have the space," she said, adding that the school turns down 200 applications from locals each year.

Sylvia Weber, the head of the city council's schooling department, on Wednesday acknowledged that Frankfurt still has not found a solution, although she said she hoped to have an answer by the end of the year.

Lagarde on Wednesday asked Frankfurt to look past its own boundaries and reconsider an offer to host the school from the neighbouring town of Offenbach.

Frankfurt and Offenbach are bitter local rivals, with the wealthier inhabitants of the former tending to look down on the smaller and poorer peer.

Frankfurt swiftly turned down Offenbach's approach, arguing the area was too small. Lagarde was not convinced: "Why not explore it? I hope this is something that can be reconsidered, because we form a community."

ECB's unlikely €6.9mn school bailout funds classrooms in containers