Lower Saxony Hairdressers Fight Repayment of COVID-19 Emergency Aid
Facing renewed financial strain, thousands of salons in Lower Saxony are petitioning the state parliament to halt demands for repayment of pandemic-era financial assistance.
Thousands of hairdressing businesses in Lower Saxony are facing the unexpected burden of repaying Corona emergency aid received in 2020, sparking a fierce backlash from the industry. The state guild association of the hairdressing trade has launched a petition arguing that the funds were initially presented as non-repayable grants, and that demanding repayment now threatens the very existence of many salons already grappling with economic headwinds.
Industry Association Cites Misleading Communication
The core of the dispute lies in the initial communication surrounding the emergency aid program. According to the industry association, businesses were led to believe the financial support was a grant, not a loan. “The reclaim today creates exactly what the emergency aid was intended to prevent: existential fear,” stated a senior representative of the guild. This sudden demand for repayment has blindsided salon owners who had already factored the funds into their pandemic recovery plans.
The impact is potentially significant. Lower Saxony is home to over 7,500 hairdressing businesses, many of which received one-off grants ranging from €9,000 to €15,000 for a three-month period. If all 7,500 companies were required to repay the lower end of that range – €9,000 – the total amount due would reach approximately €67.5 million.
Mounting Economic Pressures Exacerbate Crisis
The demand for repayment comes at a particularly challenging time for the hairdressing industry. Salons are already contending with rising wages, escalating energy prices, a shortage of skilled workers, and a decline in customer spending. These combined pressures are creating a perfect storm, pushing many businesses to the brink.
The association’s petition calls for a complete waiver of the repayment requirement for 2020 funds, as well as reimbursement of any amounts already paid back. Furthermore, they are urging the state government to lobby the federal government for a broader suspension of repayment demands across the country.
Parliamentary Review Scheduled
The petitions committee in the state parliament is scheduled to review the matter on February 18th. Should the petition be approved, the association will need to gather 5,000 signatures within a six-week timeframe to further advance their cause.
NBank Defends Repayment Requests
The NBank, the state development bank responsible for administering the Corona aid, maintains that the program guidelines always stipulated potential repayment in cases of “overcompensation.” A spokesperson for the bank emphasized that the aid was designed to address immediate, life-threatening financial bottlenecks and that, as funds originated from taxpayer money, recipients should not ultimately benefit more from the assistance than they would have without the pandemic.
According to the NBank, approximately 140,000 applications totaling around €908 million were approved in Lower Saxony in 2020. Around 1,570 cases remain unresolved, but the bank assures that installment payments or deferrals are available for businesses facing genuine financial hardship.
The situation highlights the complex legacy of pandemic-era financial support and the challenges of balancing the need for accountability with the ongoing economic vulnerabilities of small businesses.
