66 LEGAL IMPACTS OF COVID-19 IN THE TOURISM INDUSTRY As the recapitalisation is the far most distortive form of aid in the TF, the application of Section 3.11 in individual cases always generated political debates about how much the State should keep large air carriers like Lufthansa138 and KLM139 alive with euro billions of public funds. Even though the Commission tried to attach strong safeguards to the application of TF 3.11 and incentives, these aid measures will have significant impact on the markets for years. 6.1.7. AID FOR UNCOVERED FIXED COSTS Aid for uncovered fixed costs under Section 3.12 of the Temporary Framework (3.12 TF) was a late addition to the aid categories of the Temporary Framework, introduced with the fourth amendment as of 13 October 2020. Member States may grant aid to undertakings to cover their “uncovered fixed costs”140 (essentially, their losses not covered by revenues and other resources, such as insurance or other aid) during any period between 1 March 2020 and 31 December 2021 (eligible period), provided that their turnover in the eligible period dropped by at least 30% compared to the same period of 2019141. Beneficiaries may not have been in difficulty at the end of 2019 (with the exception of micro and small enterprises)142. The maximum aid intensity is 70% of the uncovered fixed costs (90% for micro and small enterprises), and after the fifth amendment, the aid amount may not exceed 10 million euros143. Member States can grant and pay the aid after the eligible period or before it, on the basis of projections in the latter case. If projections are used to calculate the uncovered fixed costs, the aid grantor is required to check the factual data later, when they are available, on the basis of audited or tax accounts144. Beyond direct grants, the aid can be provided as tax and payment advantages, repayable advances, guarantees, loans and equity, and similarly to 3.1 TF aid, the nominal value of all forms and instruments of aid count against the 10 million euro cap and reduce the amount of uncovered fixed costs145. 138 State Aid SA.57153 (2020/N) – Germany – COVID-19 - Aid to Lufthansa. 139 State Aid SA.57116 (2020/N) – The Netherlands COVID-19: State loan guarantee and State loan for KLM 140 Point 87(c) of the Temporary Framework. 141 Point 87(a) and (b) of the Temporary Framework. 142 Point 87(f) of the Temporary Framework. 143 Point 87(b) and (d) of the Temporary Framework. 144 Point 87(c) of the Temporary Framework. 145 Point 87(f) of the Temporary Framework.
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