An analysis of the Covid-19 support schemes is now making it increasingly clear that many of the demands for repayment are not simply a reflection of sound budgetary management, but the result of legally questionable tightening of the rules, unclear decisions and hastily conducted mass proceedings. Courts in North Rhine-Westphalia and Baden-Württemberg have set clear limits for the authorities. Whilst other federal states are responding politically to this development, Berlin has so far stuck to a hardline and non-transparent approach.
Happening in North Rhine-Westphalia, Baden-Württemberg and Bavaria
Anyone who still pretends today that the recovery of COVID-19 aid is, as a rule, legally unproblematic is ignoring developments over recent years. The Higher Administrative Court of North Rhine-Westphalia had already made it clear in March 2023 (Case No. 4 A 1986/22) that the partial recovery orders issued at that time were unlawful if the state deviated from the binding provisions of the grant notices when demanding repayment. In October 2025 (Case No. 14 S 303/25), the Administrative Court of Baden-Württemberg ruled in several test cases that revocation and reimbursement notices are unlawful. The message is clear: the state may not unilaterally rewrite the rules of 2020 years later to the detriment of the recipients.
The political developments in Baden-Württemberg are particularly noteworthy. There, the administration’s setbacks were not confined to court defeats. On 25 February 2026, the state parliament passed the ‘Act regulating a claim for compensation in connection with immediate coronavirus aid (…)’ (CoronaVSofortHilfAusglG BW). This Act compensates for financial burdens arising from recovery claims or repayments under the old guidelines of 22 March 2020. This covers not only cases involving final revocation and reimbursement notices, but even situations in which those affected had already voluntarily repaid the funds before a recovery notice had even been issued, unless the repayment constituted a waiver of the grant (Section 2(3), first sentence, No. 1 of the CoronaVSofortHilfAusglG BW). This is more than just a technicality: it is political recognition that a correction in accordance with the rule of law must not fail simply because someone did not lodge an objection.
Bavaria is once again demonstrating that political relief is possible when the will is there. The Bavarian State Government had already set out its policy on 18 April 2023, stipulating that no one should be plunged into financial difficulties as a result of repayment; since 31 July 2023, the self-employed and sole traders have been able to apply for a waiver if their livelihood is at risk. This, too, sends a clear signal: the state need not enforce repayment blindly if it threatens people’s livelihoods.
And Berlin? It remains stubborn
So far, Berlin has done one thing above all else: carried on. In a response to a written question from three Green Party MPs (AGH-Drs. 19/23 757), the Senate Department for Economic Affairs itself stated that the settlement of the Covid-19 aid payments would not be completed until 2027 at the earliest. By the end of June 2025, processing costs had already amounted to 140.5 million euros; a further 39 million euros or so is expected by the end of 2027. The Senate explicitly describes the process as a chain comprising verification, recovery or supplementary payments, appeal procedures and enforcement. This is not a measured correction of errors. It is a major bureaucratic project directed against the recipients themselves.
Furthermore, the Senate cannot portray the settlement as an exclusively operational matter for the Investitionsbank Berlin (IBB). The IBB is the state’s development bank; at the same time, the Senator for Economic Affairs, Franziska Giffey, holds key positions on its supervisory bodies: she is a member of the Advisory and Administrative Boards, as well as the Nomination, Risk and Remuneration Control Committees. The fundamental political responsibility for the design, oversight and, where necessary, correction of the Berlin procedure therefore remains with the State of Berlin.
The Berlin figures themselves demonstrate just how error-prone and contradictory this mass procedure is. In autumn 2025, the Senate Administration estimated that the final settlements would result in a total recovery of around 325.5 million euros, whilst at the same time anticipating additional payments of around 386.3 million euros. Anyone calculating figures in the hundreds of millions of euros on both sides is not dealing with a simple ‘case of abuse’. They are managing a mass procedure that is highly prone to error, in which the original eligibility criteria were clearly by no means as clear-cut as is often claimed today.
Even more sobering is the political handling of cases of hardship. When asked how companies facing the threat of insolvency due to repayments would be dealt with, the Berlin Senate’s response in May 2025 essentially amounted to: deferral combined with instalment payments. Nothing more can be discerned from the official statements that have been found. At the same time, the relevant Senate department stated in autumn 2025 that, at the time of the final settlements, it had no knowledge of impending insolvencies linked to repayments. This may be administratively correct, but politically it amounts to an admission of failure. Those who do not wish to acknowledge the social consequences of such a harsh recovery policy need not change anything. It is the task of the Berlin Administrative Court to examine whether this course of action still falls within the authority’s discretionary powers.
The criticism of Berlin’s approach is therefore no surprise. Since 2025, the professional association of visual artists in Berlin (bbk) has been reporting mass recovery claims, notices with no apparent connection to individual cases, a failure to take cooperation into account, and procedures that are barely comprehensible to those affected. The Senate’s response to this appears remarkably cool: it acknowledges that criticism may arise in individual cases and that the processes are subject to ongoing review; at the same time, it explicitly states that the system in place – despite specific criticism – does not provide for confirmation of document submissions. A lack of self-criticism – even though barely a third of all applications from the ‘arts, entertainment and recreation’ sector have been approved – is symptomatic. This is precisely the kind of technocratic detachment that undermines trust in government action.
Berlin’s Senate Department for Culture and Social Cohesion itself emphasises that Berlin owes its appeal to “the diversity, quality and density of Berlin’s cultural institutions”. This makes it all the more incomprehensible that the culture budget is being cut by around 130 million euros this year – approximately 12 per cent of the budget. At the same time, a policy of clawing back funds is being pursued which appears ineffective, inefficient and questionable from the perspective of the rule of law: For example, the IBB estimates that the procedure itself will take 16 months and, despite the extensive documentation involved, grants no extensions to deadlines whatsoever upon request during the hearing process. This approach must be regarded as questionable, to say the least.
Conclusion
Developments in other federal states have long shown what would also be possible in Berlin: to pause, make legal corrections and take political responsibility. North Rhine-Westphalia has encountered legal limits, Baden-Württemberg has also responded through legislation, and Bavaria has opened up a route to remission for cases where people’s livelihoods are at risk. Only Berlin has so far stuck to a course of action that reduces those affected to mere items in a file. That is precisely why now is the right time to hold the Berlin Senate politically to account: no further mass recovery claims without genuine transparency, no enforcement in legally dubious cases, and finally a political solution for those who have relied on the benefits – and rightly so.