Germany: COVID-19 aid repayment issues impact businesses

The state government of Saxony has introduced new measures to facilitate the repayment of COVID-19 emergency aid to businesses. As of late June 2026, authorities have approved 11,026 out of 12,018 applications to cease repayment claims, with only 617 rejections recorded. Many recipients have also utilized options for extended payment terms.

In Kassel, the pressure of these repayments has led to significant economic distress. Three fashion retailers—Chewing Gum, Stella, and Voice—have filed for insolvency. Managing director Manuel Milbert stated that the insolvency filings were triggered by repayment demands related to pandemic aid totaling in the high six-figure range, rather than issues with regular business operations. The affected companies employ approximately 65 people, and negotiations with potential buyers are currently underway for some of the businesses to preserve jobs.