Six years after Germany launched its Corona emergency aid for small businesses, the Federal Court of Audit says Berlin and the states still cannot show the money was spent properly and economically. The auditors see additional repayment potential of just under €1.5 billion. The finding comes from a report to the Bundestag budget committee first described by Politico; we have not seen the report itself and rely on the news-agency account (as of 27 October 2026).
For scale: in spring 2020 the federal government paid out about €13.9 billion to small firms, sole traders and freelancers, with roughly 1.74 million applications approved. The funding period was three months, but closures lasted only about six weeks on average, so many recipients were overcompensated. According to the report, the Federal Economics Ministry has assumed since 2022 that around 30 per cent of the aid exceeded actual need. The states ran the programme end to end, and clawing money back is also their job.
Why €1.5 billion is not a bill
The figure is a potential, not an invoice. How much actually comes back depends on each state’s approval terms, individual settlements and repayments already made. That is the auditors’ real complaint: there is no single procedure, but sixteen variants.
- Hesse paid out about €960 million and at one point expected to reclaim up to €400 million. After protests, Economy Minister Kaweh Mansoori (SPD) halted the process and on 22 May 2026 announced relief worth at least €66 million. It does not apply retroactively to roughly 20,000 closed cases.
- Baden-Württemberg passed a compensation law in late February 2026 for firms that had already repaid; applications are expected from the fourth quarter of 2026, with a six-month window.
- Saxony is reclaiming about 65 per cent, according to the trade paper Deutsche Handwerks Zeitung, with 7,100 objections and 85 court cases as of March 2026. Saxony-Anhalt offers interest-free instalments of up to 72 months.
- Bavaria has closed its reporting deadlines (grace period ended October 2024); those who did not respond received a demand plus default interest.
The legal picture is unsettled. North Rhine-Westphalia’s higher administrative court ruled on 17 March 2023 that the original clawback notices were unlawful because of ambiguous wording, but expressly allowed new final notices. The Cologne administrative court held on 29 May 2026 (case 16 K 2257/26, not final) that the repayment claim only arises with the final notice and therefore can hardly become time-barred, which weakens the statute-of-limitations defence compared with an earlier Cologne ruling from December 2024.
Our assessment, with due caution: pressure on the states to close open cases quickly will probably grow now that the budget committee has the number. A nationwide fix modelled on Baden-Württemberg looks unlikely, since the states are responsible and each faces different budgets and political majorities. For recipients, outcomes will depend heavily on where they live, when their notice was issued and on deadlines.
If you received emergency aid in 2020 and get a letter from your state, do not let deadlines lapse, keep records ready (turnover, running costs, loan repayments) and ask about instalments, deferral or hardship rules; a lawyer or the local chamber of crafts can help. This is not legal advice. It is also relevant to Ukrainians who ran a business in Germany before 2020.
Sources: dts/Ad-hoc-News, LTO (NRW higher administrative court, Az. 4 A 1986/22), Haufe (Cologne administrative court, 16 K 2257/26), hessenschau, Deutsche Handwerks Zeitung
