A new investigative report titled “The Art of Lobbying” has challenged the allocation of funding in the German art world.

When the pandemic threatened the future of cultural institutions in Germany, including its art market, the federal government rushed to support businesses with its mammoth program Culture Neustart (New Start Culture). Initially, a total of €1 billion in aid was offered; another billion have completed it in 2021, and more are yet to come to deal with the current energy crisis.

A report by public radio station Deutschlandfunk shares data that suggests significant sums have gone to businesses in shopping malls which, in the end, have not been as badly affected by coronavirus closures and postponements as could have been expected. The article notes that while everything was done legally, the government failed to consider the real need for a gallery or art fair.

The New Start Culture program was initiated by then Minister of State for Culture Monika Grütters and continues today under her successor Claudia Roth.

Of the billion euros, about 100 million euros ($103 million) ended up going to the visual arts, according to Deutschlandfunk. About 30% of this prize pool was spent on commercial galleries, including Sprüth Magers, König Galerie, Esther Schipper and Eigen + Art, and art fairs, thanks to what the article describes as dedicated lobbying by Kristian Jarmuschek , president of the Federal Association of Germany Galleries and Art Dealers which also manages a gallery and three art fairs in Germany. About 80% of all commercial galleries that applied received at least one grant.

Installation view: neugerriemschneider, Art Cologne, 2021
© neugerriemschneider, Berlin. Courtesy the artists and neugerriemschneider, Berlin. Photo: Mareike Tocha

Deutschlandfunk examined the distribution of this taxpayers’ money by the program’s specialist partners. For example, 15.5 million euros ($16 million) went to galleries via the Stiftung Kunstfonds (Art Fund Foundation) in Bonn, for sums of up to €70,000 ($72,698) at a time. . Four out of five requests were accepted without any apparent attempt to assess their need.

Grütters defended the way the monies were distributed, saying a check to assess actual needs was simply not “possible in the acute situation” in a comment to Deutschlandfunk. “As the sums involved weren’t that great, we agreed to work with a watering can,” she said of the scattergun approach.

The German Archaeological Association oddly presided over another €35 million ($36 million) pot, allegedly giving up to €100,000 ($103,000) each to around 150 galleries, as well as museums and memorial sites.

Among the recipients was the eminent gallery Esther Schipper, who received €92,000 ($95,500) for “the necessary digitization and protection of visitors and employees”. Galerie Kewenig in Berlin received €6,755 ($7,015) for “the purchase of high-performance laptops for the home office” and Rother in Wiesbaden received €32,400 ($33,650) to develop its “usable space for showcasing and marketing promising young artists”.

Claudia Roth, member of the German Bundestag, addresses the crowd during the Green Party's election campaign rally in Cologne on May 13, 2022. Photo: Ying Tang/NurPhoto.

Claudia Roth, the new Minister of Culture, will oversee the ongoing Neustart Kultur programme. Photo: Ying Tang/NurPhoto.

Support also came via trade show discounts for stand prices. Exhibitors attending Art Cologne in 2021 had up to 70% of their stand cost covered by money from Neustart Kultur, including galleries that may have already received help from Neustart Kultur through other streams .

Even though this year’s edition, which opens to VIPs today, November 16, has no coronavirus restrictions, attendees still receive 32% off their booth price. The art fair, one of the largest in Germany, is believed to have received overall funding of 12.16 million euros ($12.4 million) so far.

The skeptics quoted in the article wondered to what extent this support was really necessary. Deutschlandfunk reporters investigated how much art galleries and trade fairs were really affected by the pandemic, keeping in mind originally projected losses of up to 100% of sales for retailers, a category that includes shopping malls. Grim predictions like these had spurred the urgency of government aid.

Instead, according to The Art Basel and UBS Global Art Market Report, global art trade fell by much less than that, just 22.1% in 2020. This figure is apparently slightly higher for the art trade. German art, which fell by 39%, according to a federal government report.

Although galleries had to close for a long time, many of these businesses still found many customers online and were allowed to reopen as retail establishments sooner than museums. Deutschlandfunk reviewed more than 20 gallery balance sheets and interviewed other dealers. Their data suggests that some established galleries have had, at least, a boom period.

Gallery owner Gerd Harry Lybke of the Eigen Art gallery stands in his booth next to a sculpture by Stella Hamberg at the Art Cologne art fair in 2013. Photo: Oliver Berg/picture alliance via Getty Images.

Eigen + Art made an estimated profit of €3.65 million, surpassing the €2.6 million ($2.7 million) it made the previous year. He reportedly received over €80,000 in public funding.

The two years of substantial government funding did little to help the German art market prosper in the long term. Instead, it has since declined. “Our sales have dropped dramatically in 2021 and 2022,” said Judy Lybke of Eigen + Art, reporting that their profits are now close to zero. He noted that he was able to retain his employees.

Some German media have defended art galleries. “Deutschlandfunk’s research is hardly good for a scandal,” wrote Monopol online editor Daniel Völkze, noting that the 2020 fund round was the first time the commercial sector had received state support. “Funding to the film industry from the federal budget amounts to approximately 40 million euros ($41.5 million), year after year.” He noted that the money was being well used by galleries, which held showcase exhibitions during the closures, artist publications and online projects.

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