THE LEVEL PLAYING FIELD IN CRISIS MODE 59 presumably lost a significant portion of their revenues in 2020 as compared to 2019). Under the scheme, the Italian state provided a direct grant to such businesses provided that they still carried out their activities in June 2020. The eligible costs were the difference between the two levels of revenues in June 2019 and June 2020, and depending on the level of annual revenues, the intensity varied between 5 to 15%. As the Italian authorities agreed to conform to the limited conditions of 3.1 TF aid, the Commission authorised the measure. Again, while the measure was essentially a loss compensation scheme that could have been introduced on another legal basis, it was possible to implement it under 3.1 TF aid rules due to their flexibility and simplicity94. 6.1.2. AID IN THE FORM OF GUARANTEES ON LOANS Aid under Section 3.2 of the Temporary Framework (3.2 TF aid, “Aid in the form of guarantees on loans”) is a liquidity tool95. Under this aid category, Member States are allowed to grant guarantees for loans subject to favourable but gradually increasing premiums96. The guarantees can be granted for six years maximum97. However, Member States can “modulate” the guarantee terms in their schemes to a certain extent by offering e.g. longer (but maximum 8-year) duration at higher premiums or flat-rate premiums98. The total amount of loans that can be backed by 3.2 TF guarantees is linked to the liquidity needs of the undertaking: it is the higher of double the 2019 wage bill of the undertaking or 25% of its 2019 turnover99. Exceptionally, the total amount of the guaranteed loan can be established on the basis of a liquidity plan presented by the beneficiary100. The guarantee is maximum 90% of the loan principal if the losses are sustained proportionally by the state (the guarantor) and the credit institution and is capped at 35% if it is a first-loss guarantee borne 94 Other examples of Section 3.1 aid in the tourism sector include Commission decision C(2020) 8458 final of 25 November 2020 (SA.59338 (2020/N) Estonia COVID-19: Aid to undertakings in tourism and directly related sectors) or C(2020) 4835 final of 9 July 2020 (SA.57797 (2020/N) – Belgium Support for the social tourism sector). 95 Point 24 of the Temporary Framework. 96 Point 25(a) of the Temporary Framework. 97 Point 25(f) of the Temporary Framework. 98 Point 25(b) of the Temporary Framework. The Commission published a document summarising its case practice on modulation options, available in https://ec.europa.eu/competition/state_aid/what_is_new/summary_of_case_practice_on_modulation_ under_point_25(b)_of_TF.pdf (accessed on 1 March 2021). 99 Point 25(d)(i) and (ii) of the Temporary Framework. 100 Point 25(d)(iii) and point 25(e) of the Temporary Framework.
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