More than five years after Germany’s first COVID-19 lockdown, small business owners and self-employed individuals, such as hairdresser Marion Alemeier, are still grappling with the consequences of the country’s emergency aid program. The promises made by politicians in March 2020, which aimed to provide grants rather than loans, have left many feeling abandoned and betrayed, with some now facing the unexpected burden of repaying the financial assistance they once relied on.
The Promises and Reality
On March 23, 2020, during Germany’s first lockdown, then-Economics Minister Peter Altmaier and then-Finance Minister Olaf Scholz made bold promises to micro-enterprises and self-employed individuals. Scholz assured that the financial support was a grant, not a loan, emphasizing, “Nothing needs to be repaid.” Altmaier added, “We will not leave anyone behind!”
However, more than five years later, Marion Alemeier, a hairdresser who received €9,000 ($10,400) in emergency aid, now feels abandoned. “There was a lot of hype, but none of the promises were kept,” Alemeier told DW. She had believed that repayment wouldn’t be necessary, but the reality has been far different. In 2020, the emergency aid was meant to cover the financial gap caused by pandemic restrictions. But soon after, it was revealed that the money had been distributed based on estimated needs, leading to overpayments. The German government later announced that approximately €5 billion of the €13 billion distributed in aid had been overpaid, prompting repayment requests.
The Repayment Struggle
Alemeier was asked to repay €7,000 of the emergency aid, which led her to take legal action. While she won her case, the state government of North Rhine-Westphalia still demands half of the money back, asking for €3,500. Alemeier’s story is far from unique. Many self-employed workers, who once viewed the aid as a lifeline, are now grappling with unexpected financial demands that threaten their survival.
Guido Wirtz, a fellow hairdresser and representative in Rhineland-Palatinate, expressed the frustration many in the industry feel. He noted that politicians’ unkept promises have left many hairdressers feeling betrayed. “Us hairdressers are dying quietly,” Wirtz said, describing how the pandemic caused widespread economic damage that was only partially alleviated by government aid. Even after sales began to recover in 2024, hairdressers faced a significantly reduced customer base, and many were forced to cancel retirement plans just to make ends meet.
The Downside of Germany’s Federal System
The repayment process has been further complicated by Germany’s federal regulatory system, where each state handles the issue of repayments differently. In Bavaria and Baden-Württemberg, affected individuals were not allowed to appeal the decisions and had to take legal action immediately. In contrast, the state of Hesse temporarily halted the review of coronavirus emergency aid repayments, with the Minister of Economic Affairs, Kaweh Mansoori, stating that the aim was to provide relief for small businesses and the self-employed.
Meanwhile, in North Rhine-Westphalia, repayment terms were changed numerous times, leading to confusion and frustration. Wirtz, for example, is repaying €15,000 in emergency aid in monthly installments of €635. “Politicians no longer know how to get out of this situation,” he said, noting the administrative costs of processing the repayments, which far exceed the actual repayment amounts.
Political Disillusionment and the Legal Fight
Rainer Hermann, a lawyer and founder of IG NRW-Soforthilfe, an organization supporting people fighting repayment claims, believes the emergency aid program has been an administrative disaster. “People are not only depressed but also extremely angry,” Hermann said. “I have seen highly educated people, seasoned entrepreneurs, slip into extremism.” Many affected individuals have filed for bankruptcy or are on the verge of doing so, unable to cope with the mounting financial pressure.
Hermann also points out that Germany’s federal system led to a lack of uniformity in the application process. The federal government should have set uniform conditions for emergency aid, with the 16 states acting only as executive bodies. He also criticized the government for not providing clear and understandable guidance during the application process, leaving individuals vulnerable to confusion and legal repercussions.
A Comparison with Belgium’s Approach
Hermann also compared Germany’s handling of the pandemic aid to neighboring Belgium, which introduced a support program that was continuously modified based on the needs of businesses. “No one complained, grumbled, or lamented; instead, everything worked wonderfully,” Hermann noted. This contrast highlights the challenges of Germany’s federal system and its lack of coordination during the pandemic.
Conclusion
For many self-employed individuals and small business owners in Germany, the aftermath of the COVID-19 emergency aid program has been marked by frustration, financial hardship, and a sense of betrayal. The promises made in 2020 have not been fulfilled, and the repayment demands are pushing many to the brink. As these entrepreneurs continue to fight for fairness, the legacy of the emergency aid program remains a contentious and painful chapter in the pandemic’s economic response.
This story may be updated with more information as it becomes available.
