Relief for recipients of emergency aid in Baden-Württemberg

The skilled trades sector breathes a sigh of relief: The governing parties of Baden-Württemberg want to settle the dispute over the repayment of Corona emergency aid with a law.

The governing CDU and Green Party parliamentary groups in Baden-Württemberg have announced they will end the months-long dispute over the Repayments of Corona emergency aid to settle this with a new law. This was reported by the Baden-Württemberg Crafts Day (Handwerk BW) , who welcomes the end of what he calls the "emergency aid drama." Recipients of the aid funds who submitted their applications by April 7, 2020, are to exempt from the obligation to repay will happen if the initiative is approved.

Important for those affected: Applications for emergency aid submitted from April 8, 2020 onwards are not covered by the repayment exemption law.

This would, however, put recipients of emergency aid who submitted their applications by April 7, 2020, on equal footing with those businesses that had successfully sued against repaying the emergency aid in the meantime. According to its own statements, Handwerk BW (the Baden-Württemberg Chamber of Skilled Crafts) had already called for a solution to the problem weeks ago, before the election.

"The long period during which our businesses were left in the dark is not a point of pride for the ministries," he says. Rainer Reichhold, President of the Baden-Württemberg Crafts Association"Finally, Parliament is taking matters into its own hands and keeping its promise that the honest shouldn't be the ones who lose out." Reichhold thanked the governing parties for this initiative and also the opposition for the pressure they had exerted in recent weeks. The skilled trades sector now expects the draft to receive support from as many parties as possible.

With the proposal submitted on February 4, 2026 Law "on compensation in connection with Corona emergency aid from the state of Baden-Württemberg based on the 'Guideline for the support of the self-employed, companies and members of the liberal professions affected by the Corona pandemic ("Corona emergency aid")' of 22 March 2020" According to Handwerke BW, the parliamentary groups are "looking for a way out of the legal back and forth regarding how the state government should deal with the rulings of the Administrative Court of Appeal from October 2025".

Background and history:

In several cases, the judges ruled that demands for repayment under the first emergency aid directive were unlawful. This concerned... exclusively for aid applied for between March 22 and April 7, 2020 were.

These subsidies were granted on the basis of a guideline, the interpretation of which the state later changed to the detriment of the businesses – particularly regarding the calculation of a liquidity shortfall and the period of use.

The court clarified that this retroactive restriction was inadmissible. Beyond the plaintiffs, an estimated 62.000 businesses and self-employed individuals are affected, not only in the trades, but including many hairdressers.

The Ministry of Economic Affairs had already announced in January that it would withdraw all repayment demands in these cases. However, a dispute arose with the Ministry of Finance over how this could be done. A further stalemate threatened to last until after the election.

"Now the CDU and Green Party parliamentary groups have broken the deadlock," writes the German Confederation of Skilled Crafts. Their draft legislation provides for a program in which eligible businesses can apply online for a refund of their reimbursement.

"The process doesn't exactly sound like a prime example of cutting red tape. And the fact that the Ministry of Economic Affairs and presumably the L-Bank now have to prepare a new online platform also seems like a time risk to us. But at least the funds are secured in the budget," said the state president of the Chamber of Skilled Crafts.

It is now urgently necessary to clarify what businesses need to pay attention to – also because the law does not cover cases in which no legally binding repayment notices from the L-Bank have yet been issued and businesses still have legal recourse (such as filing an objection), the trade association emphasizes. "The parliamentary groups have demonstrated responsibility for the economy here; otherwise, the credibility of the state would have been at stake once again," said Reichhold.

The skilled trades sector in Baden-Württemberg hopes that the law will be passed by the end of February and that the application process will begin promptly. The Ministry of Economic Affairs and the L-Bank are responsible for ensuring this happens. Now that the long-awaited legal clarification has been achieved, the focus is on providing actual financial relief. 

Source: Handwerk BW

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