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Qatar Airways targets expansion strategy to ‘defeat’ regional blockade



Qatar’s flagship airline is embarking on a strategy of expansion in part to counter losses borne by the regional embargo imposed on it in 2017 by several neighboring states.

Qatar Airways CEO Akbar Al-Baker told CNBC on Tuesday that he would bring an end to the “illegal” blockade through a policy of increased flight frequencies.

“We are focusing everywhere in the world, we’ve been increasing frequencies into Eastern Europe, Southeast Asia, increasing our network into the sub-continent, so we are going all over the place,” he said. “We are very determined to make sure that this illegal blockade is defeated in a very, very strong way.”

Several Arab countries led by Saudi Arabia cut diplomatic ties with Qatar last June, accusing the tiny oil-rich state of supporting terrorism. Qatar rejected the accusations.

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt imposed a blockade on their neighbor, closing their land, sea and air borders with Qatar.

Qatar Airways initially predicted losses for the 2017 financial year due to the blockade, but Al-Baker suggested Tuesday that these will be softer than first anticipated. The company’s annual financial results will not be out until late March.

“In addition to this we are expanding, we’re keeping on stretching our global network, we are increasing frequencies and we are doing other investments that will give us positive returns on our balance sheet,” Al-Baker said.

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Airbus-Boeing truce not a complete reset in US EU relations, experts



US President Joe Biden has reportedly agreed to lower the income level caps for the third round of stimulus payments.


LONDON — The U.S. and the European Union might have reached a trade truce, but some analysts have doubts over whether the two sides will be able to agree on other contentious issues such as digital taxation and relations with China.

U.S. President Joe Biden and European Commission President Ursula von der Leyen announced on Friday a suspension in tariffs imposed during the Trump presidency over aircraft subsidies. The dispute first emerged in 2004 and the World Trade Organization ruled in 2019 and in 2020 that the U.S. and the EU had granted illegal support to Boeing and Airbus respectively.

The $7.5 billion tariffs on EU products and $4 billion duties on U.S. goods are now on hold for four months as both sides look to draw up a deal that will include a permanent solution over support for the aircraft sector.

European officials have said the announcement marks a “reset” in transatlantic relations after four fractious years under the Trump presidency, but some analysts are not convinced.

“The tariff suspension is a first step to defrost trade relations between Europe and the United States, and hopefully a sign that these tariffs will be taken away altogether soon,” Fredrik Erixon, trade expert at the ECIPE think tank, told CNBC on Monday.

“I’m less convinced that the suspension signal a completely new orientation in transatlantic trade, with new agreements to support more economic integration.”

Tech giants

One particularly contentious issue is how some of the world’s biggest tech companies are taxed.

Last week’s news is good news and takes away a short-term risk for the economy we always have had to count in during the last four years.

Carsten Brzeski

economist at ING in Germany

The EU and the U.S. have been at odds over this matter, as well as security concerns around 5G, for years. But since Biden arrived at the White House, the EU is confident that some of these disagreements can be overcome.

In fact, the U.S. has opened the door toward a deal over digital taxation, which the Organization for Economic Cooperation and Development aims to conclude this summer.

But Biden has not departed from all of his predecessor’s policies completely. He has implemented the Buy American First initiative, to incentivize manufacturing in the country and to boost the overall economy as the pandemic takes its toll on the world’s largest economic power.

In the meantime, the EU has also stepped up discussions over strategic autonomy, aiming to reduce its reliance on certain parts of the world.

“Both sides are raising their economic protection against the world economy. In the U.S. by new Buy America polices, for instance, and in Europe by a general campaign to wean itself off its technology dependence on the U.S.. Both sides say they want to take trasatlanticism into a new age, but for that to happen they would first have to resolve controversial issues like digital taxes and new technology frictions,” ECIPE’s Erixon added.

China and Russia

In addition, there are also some sensitivities over how to deal with China and Russia.

The EU signed an investment deal with Beijing just weeks before Biden was inaugurated, despite fears the 27-member bloc could be jeopardizing its relationship with the new president. At the same time, some American lawmakers believe the EU is not assertive enough when it comes to human rights issues in China.

The U.S. also opposes the gas pipeline being built from Russia to Europe and has sanctioned some firms involved in the project.

However, in a press statement on Friday, after a phone call with Biden, von der Leyen said: “We share a strategic outlook on Russia.”

Holger Schmieding, chief European economist at Berenberg told CNBC on Monday that the next item on the transatlantic to-do list could be “attempts to defuse the conflict about the Nordstream 2 pipeline.”

Carsten Brzeski, economist at ING in Germany, also said that the tariff suspension “doesn’t mean that everything will be fine, there are still many stumble blocks ahead like Nordstream and how to deal with China.”

But in the meantime, European exporters can breathe a tentative sigh of relief, at a time when the region is facing a severe economic crisis.

“Last week’s news is good news and takes away a short-term risk for the economy we always have had to count in during the last four years,” Brzeski added.

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EU clears Microsoft Bethesda acquisition



Visitors queue to play the video game Fallout 76, developed and published by Bethesda Softworks, during the Paris Games Week on October 27, 2018.

Chesnot | Getty Images

LONDON — The European Union approved Microsoft’s $7.5 billion acquisition of ZeniMax, the parent company of iconic video game publisher Bethesda Softworks.

The European Commission — the executive body of the EU — made the decision to clear the Microsoft-ZeniMax deal on Friday, according to an update on its merger case register. The Commission says it found no competition concerns resulting from the takeover.

Microsoft announced it would buy ZeniMax in September. It’s the biggest gaming acquisition in Microsoft’s history, eclipsing the $2.5 billion the firm paid for Minecraft developer Mojang in 2014.

Bethesda is a household name in the video game industry, known for publishing a raft of successful game franchises including Fallout, The Elder Scrolls and Doom. Microsoft plans to push its subscription offering, Xbox Game Pass, by bringing Bethesda’s games to its extensive library of titles.

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Treasury yields rise after Senate passes stimulus package



The 10-year U.S. Treasury yield hit 1.6% on Monday morning, after the Senate passed a $1.9 trillion coronavirus economic relief and stimulus bill on Saturday.

The yield on the benchmark 10-year Treasury note climbed to 1.606% at 3:30 a.m. ET. The yield on the 30-year Treasury bond rose to 2.311%. Yields move inversely to prices.

Senators passed the stimulus bill through budget reconciliation, a process that required no Republican support but every Democratic vote.

The Democratic-held House aims to pass the bill on Tuesday, and send it to President Joe Biden for his signature before a March 14 deadline to renew unemployment aid programs.

Treasury yields have been moving rapidly higher recently amid expectations of economic recovery from the pandemic and concerns about a rise in inflation.

Ambrose Crofton, global market strategist at JPMorgan Asset Management, noted in a comment Friday that this recent spike in yields has caused “some indigestion in equity markets.”

However, Crofton said investors should take comfort from comments made by Federal Reserve Chairman Jerome Powell last week, indicating that “should markets become disorderly, then action would be taken to maintain favourable financial conditions and keep the economy on the path to full employment.”

Powell said at a Wall Street Journal conference last week that he was “very mindful” of the lessons from runaway inflation in the 1960s and ’70s, but believes the current situation is different.

Auctions will be held on Monday for $54 billion of 13-week bills and $51 billion of 26-week bills.

CNBC’s Jacob Pramuk contributed to this report.

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