TIAMSA Blog: Effects of the Corona Crisis on German Art Galleries.

The Meltdown – German Art Gallery Sales Drop to Zero
by Kristian Jarmuschek & Birgit Maria Sturm 

“We just moved into a new location, we and our artists were looking forward to the opening. We invested so much – now it’s all going to waste.” “I was at our partner gallery in Vienna to choose works for a new project. When it was announced that the closure of the borders was imminent, I fled Austria, now I am quarantined for two weeks.”
“We put a lot of effort into organising a show with a dozen students of a renowned German artist. Nobody visits the show, nobody buys.”
Many messages like these are sent to us these days. 

The shutdown began with the cancellation and postponement of upcoming art-fairs. The entire public cultural life, along with its institutions, is in a coma. But unlike museum directors, gallerists are not receiving their salaries, and unlike artists they are not protected by an affordable compulsory insurance.

Digital presentations are now on the rise. Online viewing rooms provide galleries and their artists with at least a virtual presence in the internet. New ideas for presenting artworks and for building electronic platforms on the web and social media are being tested and implemented. “Emerging artists,” however, and those whose work requires explanation and mediation, often need a physical space so that their work can be presented meaningfully and effectively. They depend on the communication and experience of the “real” world. For artists, the exhibition space – be it in a museum, in a gallery, or at a fair – is more than a place to dream of. It is essential.

The German art trade annually amounts to more than 4 000 free exhibitions for over 11 000 German and foreign artists, all at its own financial risk. The relationships between the galleries and their artists are not merely commercial; they are usually marked by trust and long-lasting personal exchanges. Most of these symbiotic relationships result in mutual recognition and economic success. Outsiders are rarely aware that selling art is anything but a simple business transaction. A prevailing idea of the gallerist – a rich individual in constant party mood – is unfortunately fostered by media coverage that mainly concentrates on international auction records and blue-chip galleries. The reality could hardly be more different, however: half of German art galleries have an annual turnover between 50,000 and 200,000 Euros and only 14% have a turnover that exceeds 500,000 Euros.

The financial crisis of 2008 had disastrous consequences for the German art market. Peer Steinbrück – former German minister of finance, and someone who is likely to know – now predicts that the Corona crisis will be worse. It actually is: sales are down to zero. Most smaller and mid-tier galleries do not have sufficient savings to fall back on. In spite of the standstill, they have to face fixed costs. To be sure, employees may receive “short-time” work contracts (the German system of keeping employees in their jobs), yet bridge loans – if granted – will result in a mountain of debt that will not vanish after the crisis. 

In this dire situation, the German government’s most recent aid package for individuals in the “creative industry” will no doubt be helpful. Hopefully, many galleries will apply for these grants to secure a certain financial relief for the first three months. The postponement of tax and artists’ social security payments, a relaxation and adjustment of the rules imposed by the insolvency law, better protection for tenants, and more ammunition for the “bazooka” – the large scale provisions for safeguarding the national economy: all of these measures are beneficial for the time being, but will ultimately amount to nothing more than the proverbial drop in the ocean. Will this operation turn out to be technically successful, but deliver a dead patient?

What can (cultural)-politics do? The Corona crisis poses a new challenge also for politicians. The German EU-presidency in July will bring more influence and responsibility. In 2014 German art dealers and galleries, unlike all other sectors in the creative industry, were denied the right to a reduced VAT rate. A wave of gallery closings ensued. A reversal of this decision would provide a strong incentive and would honor the efforts that galleries make to enrich the cultural life in Germany. After a number of short-term aid packages, reducing the VAT on works of art would offer a lasting support for galleries and artists.

German cultural politics for the visual arts is unfortunately fixated on institutions and artists. The art market as a third pillar of this sector is barely acknowledged and has been subjected to immense pressures caused by the introduction of a multitude of regulations and laws in recent years. Resentment and misinformation seem to have guided these decisions. A 2019 survey of Berlin art galleries has shown that, given the recent assault on galleries’ resources, 80% of all gallerists now say that they would not choose this profession again. 

Galleries have the same responsibilities towards artist as publishers have towards authors. But unlike German galleries, German publishers have been beneficiaries of a range of protective measures. This must change if the government is serious about wanting to provide artists with a sustainable subsistence.

In spite of the lockdown and the resulting absence of viewers, art galleries around Frankfurt cathedral have recently opened their spring exhibitions. Most of the exhibits can be admired at a distance by passersby through the large shop windows. In the evening the gallerists mark their resistance to the crisis by turning their lights off a little later – in spite of the fact that hardly anybody walks the streets at night these days. 

Kristian Jarmuschek is President, Birgit Maria Sturm is Secretary General of the Bundesverband Deutscher Galerien und Kunsthändler (the German Association of Art Galleries and Art Dealers – bvdg.de)

This text was first published in German in: Politik & Kultur. Zeitung des Deutschen Kulturrates, edited by Olaf Zimmerman and Theo Geißler, April 2020 (www.kulturrat.de).

Translated into English by Julius Woeste, Galerie Nordenhake Berlin/Stockholm/Mexico City.