Hairdresser Marion Allemeyer still remembers March 23, 2020. It was the second day of Germany’s first lockdown in an effort to stop the spread of COVID-19, when then-Economics Minister Peter Altmaier (CDU) and then-Finance Minister Olaf Scholz (SPD) made bold promises. In his explanation of the coronavirus emergency aid for micro-enterprises and self-employed individuals, Scholz said: “It is very important to me that we are providing grants, not loans. This means there is no need to repay anything.”
To which Altmaier said: “We will leave no one behind!”
Five and a half years later, Marion Allemeyer now feels quite abandoned.
“There was a lot of publicity, but none of the promises were kept,” he told DW. “Many colleagues and friends warned me at the time: ‘Be careful, you’ll have to pay for it.’ And I replied, ‘No, it is not possible; They can’t do that.
At that time, Allemire received €9,000 ($10,400) in emergency aid, money she urgently needed as she had lost all income over the course of six weeks. It was not until May 4, 2020, that social distancing rules were relaxed in Germany and hair salons were allowed to reopen.
faulty calculation
However, it was later announced that the subsidy was given only based on an estimate of what was needed to bridge the “liquidity gap” caused by the pandemic. This was because the Federal Economy Ministry estimated that of the approximately €13 billion that federal and state governments had paid for emergency pandemic aid from March to June 2020, there had been an overpayment of €5 billion.
As a result, thousands of requests for repayment were sent – including to Marion Allemeyer. The hairdresser was asked to repay €7,000. She took legal action against the official decision and won, but the North Rhine-Westphalian state government still wants half the money, €3,500, from her as a settlement.
Self-employed individuals like Allemeyer were able to apply for €9,000, businesses with up to ten employees could get up to €15,000, and €25,000 was available for companies with ten to 50 employees. For many people, this financial assistance was a lifeline at the time, or at least a big help.
This was also the case for hairdresser Guido Wirtz, representative of hairdressers in the neighboring state of Rhineland-Palatinate.
In an interview with DW, he said: “Politicians made promises they didn’t keep. There is an overwhelming sense of frustration and anger among all hairdressers. Sales did not return to pre-pandemic levels until mid-to-late 2024, but the number of customers remained significantly lower.”
Many of his colleagues were so desperate that they even canceled their retirement plans to make ends meet, while others simply gave up: “We hairdressers are dying quietly.”
The downside of German federalism
What really troubles small business owners and the self-employed is Germany’s federal regulatory patchwork with each state handling the issue of repayment differently.
In Bavaria and Baden-Württemberg, those affected were unable to appeal the decision and had to take immediate legal action. The Administrative Court of Baden-Württemberg has now ruled in favor of the entrepreneurs in five cases: They were not ordered to repay funds received during the COVID-19 pandemic.
The reasoning behind the decision will be given later, as the decisions are not final yet.
In North Rhine-Westphalia, repayment terms on websites were changed at least 15 times in a matter of weeks.
Hesse has now temporarily halted its review of coronavirus emergency aid. Hesse’s Minister of Economic Affairs Kaveh Mansouri explains the reasoning behind the decision: “After all, this is not about large global corporations, but about the self-employed, small and medium-sized businesses and skilled professions. I therefore want to use all legal options to provide relief to those affected. For me, it is also a question of fairness.”
Hairdresser Wertz is now down to one staff member and is repaying his €15,000 loan in monthly installments of €635 as emergency aid.
“Politicians no longer know how to get out of this situation,” Wirtz said. “A politician once told me that he estimated that the cost of processing the repayments was significantly higher than the repayments themselves. After all, a lot of staff were hired to keep track of and handle the processes.”
political disillusionment
Rainer Hermann is one of the people from North Rhine-Westphalia who knows most about the details of COVID-19 emergency aid. In mid-2020, the lawyer founded IG NRW-Soforthilf (IG NRW Emergency Aid) and now supports around 11,000 people fighting against repayment requests, including Marianne Allemeyer.
In his opinion, the emergency aid program is an outrageous administrative disaster. People are not only depressed, but also extremely angry, he told DW: “I’ve seen highly educated people, experienced entrepreneurs go to extremism – you can’t talk to them anymore. Others are completely desperate and broke. Many have already filed for bankruptcy or will have to do so soon because, of course, other economic support measures are now being decided.”
But what should Germany have done differently or better? Harman didn’t have to think long: First, to avoid federal chaos, the federal government should have set uniform conditions for emergency aid, with the 16 states acting only as executive bodies. Furthermore, he believes that applications should have been written in a clear and understandable manner, with sufficient information provided in advance so that those affected do not “risk their necks” due to lack of experience with subsidies and case law. Finally, he believes that the state government should view citizens as partners rather than adversaries and should not refuse to engage in constructive dialogue.
A glance at the neighboring country would have been enough.
“Of all countries, our neighbor Belgium introduced an aid program that was extended and/or revised, expanded and reduced every month,” Rainer Hermann said. “There was a program that people could sign up for, and no one complained, complained, or moaned; instead, everything worked wonderfully.”
This article was originally written in German.
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