Walt Disney Co.’s ESPN, Fox Corp. and Warner Bros. Discovery Inc. are teaming to create a joint sports streaming service.
The as-yet unnamed service, which could be available as early as the fall and offer a sort of Hulu model for sports, comes amid an explosion in sports-streaming rights and audiences.
The service would essentially be a skinny bundle of the companies’ linear channels, including ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, Fox, FS1, FS2, BTN, TNT, TBS, truTV, as well as the ESPN+ streaming service.
“The launch of this new streaming sports service is a significant moment for Disney DIS, +2.73%
and ESPN, a major win for sports fans, and an important step forward for the media business,” Disney Chief Executive Bob Iger said in a statement late Tuesday. “This means the full suite of ESPN channels will be available to consumers alongside the sports programming of other industry leaders as part of a differentiated sports-centric service.”
Added Warner Bros. WBD,
CEO David Zaslav: “This new sports service exemplifies our ability as an industry to drive innovation and provide consumers with more choice, enjoyment and value and we’re thrilled to deliver it to sports fans.”
Each company will own one-third of the platform, according to Disney, in a deal reminiscent of the original Hulu, which started off as a joint venture between ABC, Fox and NBCUniversal.
The service will have a new brand with an independent management team, and will be available to bundle with Disney+, Hulu and Max subscriptions.
“We’re pumped,” Fox FOX, +0.55%
CEO Lachlan Murdoch said. “We believe the service will provide passionate fans outside of the traditional bundle an array of amazing sports content all in one place.”
More details, including pricing, will be announced later.
Prominently missing from the deal are Comcast Corp. CMCSA, -1.00%,
which owns NBCUniversal and its sports lineup that includes NFL football and the Olympics, and Paramount Global PARA, -0.21%,
which owns CBS — which carries the NFL and college football, among other sports.
The new service will showcase thousands of high-profile sporting events and include all four major sports leagues — the NFL, NBA, MLB and NHL — as well as college football and basketball, golf, tennis, cycling, soccer and UFC.
Shares of Disney were down 1% in extended trading Tuesday, while Fox shares jumped 6% and WBD gained 3%.
Britain is providing the executive an extra £3.3 billion to start patching holes in services and pay long-delayed wage hikes that just triggered the biggest public sector strike in Northern Ireland’s history. The trouble is, the head of Northern Ireland’s civil service, Jayne Brady, has already told the new leaders that these eye-watering sums are still too small to pay the required bills. The U.K. expects Stormont to raise regional taxes, something local leaders have been loath to do.
If anything can unite unionist and republican politicians, it’s their shared demand for the U.K. Treasury to keep sending more moolah — even though the British government already has committed to pay Northern Ireland over the odds into perpetuity at a new rate of £1.24 versus an equivalent £1 spent in England.
Money demands and spending priorities should underpin short-term stability at Stormont. But a U.K. general election looms within months and DUP leader Jeffrey Donaldson wants to reverse his party’s losses to Sinn Féin. That could be complicated by the fact that he’s just compromised on Brexit trade rules in a fashion that distresses and confuses many within his own divided party, leaving him vulnerable.
To strengthen his leadership, Donaldson boosted pragmatic allies and sought to neuter less reasonable opponents in Saturday’s DUP moves at Stormont.
The assembly’s new non-partisan speaker will be DUP lawmaker Edwin Poots, who defeated Donaldson for the party leadership in 2021 only to be tossed out almost immediately.
That move puts Poots — who used his previous role as Stormont’s agriculture minister to block essential resources for the required post-Brexit checks at ports — into a new strait-jacket of neutrality.
Little-Pengelly, by contrast, is one of Donaldson’s most trusted lieutenants and a Stormont insider. He put her into his own assembly seat when, shortly after the 2022 election, Donaldson dumped it in favor of staying an MP in London.
While Stormont is never more than one crisis away from another collapse, for Saturday, peace reigned — and an Irish republican, committed to Northern Ireland’s eventual dissolution, is in charge of making the place work.
“We have been saying this a long time,” he said on a visit to Brussels. “I have been here three times before and always we said if we didn’t do this … the Houthis will never stop. The Houthis have an ideology, have a project. Iran has a project in the region and unfortunately, the others do not respond.”
He expressed frustration that the EU and U.S. spent years pouring their diplomatic energies into wooing Tehran for a nuclear deal, rather than exerting more pressure on the Islamic Republic to stop supporting their Houthi allies, fellow Shi’ite Muslims who were seeking to impose what he labeled a “theocratic, totalitarian” police state.
The idea behind the nuclear talks was that Tehran should limit its nuclear ambitions in return for sanctions relief, but an accord proved out of reach.
No one paid attention
Bin Mubarak noted international momentum for action — which has included U.S. and British strikes on Houthi targets — did not finally come about “because of what [the Houthis] did to the Yemenis. They killed thousands of Yemenis. Not because of the atrocities they committed, raping women … jailing women … Just look at what Houthis did. No one is paying attention.”
He explained Western diplomacy toward Iran was supposed to have focused on three elements: the nuclear program, Tehran’s support for regional proxies, and its ballistic missile program. The fixation on the first, to the detriment of the other two, means the West is now facing an adversary in Yemen that has been very well armed by Iran, bin Mubarak complained.
“[Iran’s] Shahed drones, the first time we started hearing the European Union talking about it, they were being used in Ukraine. But before that, for years, we were saying Iran is supplying Houthis and drones are attacking Yemeni people. No one was believing [it],” he continued, adding that Houthi drone strikes stopped Yemeni oil exports in October 2022.
Parliament on Monday opened an internal probe into Latvian MEP Tatjana Ždanoka after an independent Russian investigative newspaper, the Insider, reported she had been working as an agent for the Russian secret services for years.
She was one of just 13 MEPs who in March 2022 voted against a resolution condemning Russia’s full-scale invasion of Ukraine, which caused her to be expelled from the Greens/EFA group. Ždanoka now sits as a non-attached MEP.
“We are convinced that Ždanoka is not an isolated case,” the three Latvian MEPs wrote, citing concerns over suspicious “public interventions, voting record[s], organised events, as well as covert activities.”
“The Greens/EFA group must bear a degree of responsibility for long-term cooperation, financial support, and informational exchange with Ždanoka from July 2004 till March 2022,” the group added.
The Latvian Socialists did not sign the MEPs’ letter — and there are no Latvian Greens in Parliament after Ždanoka’s expulsion from the group.
The Greens/EFA group released a statement Tuesday saying it was “deeply concerned” about the allegations and asked for Ždanoka to be banned from Parliament for the duration of the probe.
Saudi Arabian Oil Co., commonly known as Saudi Aramco, said that it has been ordered by the Saudi government to keep its oil production capacity at 12 million barrels a day.
The oil and gas company said it received the instruction while it was working to increase production to 13 million barrels per day.
“Aramco announces that it has received a directive from the Ministry of Energy to maintain its Maximum Sustainable Capacity (MSC) at 12 million barrels per day,” it said in a statement.
Write to Pierre Bertrand at pierre.bertrand@wsj.com
Ukrainian authorities uncovered a corrupt arms procurement deal worth nearly €36.4 million, the Ukrainian security service announced late Saturday.
Former and current “high-ranking officials” in Kyiv’s defense ministry were involved in the plot, dating to 2022, to steal funds meant for procuring 100,000 mortar rounds, the Security Service of Ukraine (SBU) said in a statement.
The scheme reflects Ukraine’s ongoing struggle to combat corruption as it tries to fight off Moscow’s invasion and apply to join the EU and NATO.
According to the SBU, the defense ministry paid for the weapons order in August 2022, transferring the funds to supplier Lviv Arsenal. Instead of delivering the weapons, however, the company “took the received funds into the shadows, transferring them to the accounts of another affiliated structure in the Balkans,” according to the statement.
The SBU said it seized the stolen funds and notified five people of suspicion, including the former and current heads of the department responsible for military equipment at the defense ministry. One suspect is in custody after being detained while trying to leave Ukraine, the SBU said.
Ukrainian President Volodymyr Zelenskyy has compared corruption to treason. Yet his move to hand graft-fighting authority to the SBU — a unit under his direct control — rather than existing corruption watchdogs has sparked controversy and fears that sensitive cases could be covered up.
With a rough 2023 in the rearview mirror, Levi Strauss & Co. this year is trying to tackle its problems with new pants.
That includes pants with lighter-weight denim; pants for women that can be worn as high-rise or low-rise; and even nondenim pants that management, during Levi’s LEVI, +1.27%
earnings call on Thursday, referred to as a “tech pant” for men with “moisture control and 360 mobility.” The company also plans to expand its offerings of Performance Cool pants intended to keep the wearer cool and dry on hotter days.
But as those products roll out, the retailers that account for most of Levi’s sales are still cautious about packing their shelves with new apparel — even though Levi’s executives pointed to slightly better demand from clothing stores during the fourth quarter and holiday period. And as the denim pioneer cuts costs, brings in new leadership and tries to be a bigger e-commerce player, Wall Street will now be digging around for signs of a payoff.
“Ultimately, the market will be looking for evidence new strategies can drive accelerated growth,” Stifel analyst Jim Duffy said in a research note on Thursday.
“We continue to believe in brand vitality and opportunities for extension. With product reflective of new direction arriving in the marketplace across 2024, the proof will be in consumer response,” he continued.
In an interview with MarketWatch on Friday, Duffy said he was optimistic about Levi’s standing as an established brand and stronger demand for its dresses, skirts and other women’s clothing items. But the more products a company rolls out, he suggested, the more it has to invest to make them work — and the more it needs to manage if sales falter.
“The risk, as I see it, is that more categories means more SKUs and more product that is fashion rather than core basic styles, and more investment and inventory that, if it doesn’t translate to the marketplace, could result in higher markdowns,” he said, referring to the stock-keeping units by which retailers track inventory.
Levi’s on Thursday said it would lay off between 10% and 15% of its global corporate staff in the first half of this year, a move intended to save $100 million in costs over that period. The layoffs are part of a two-year plan, called Project FUEL, intended to save money and strengthen the part of Levi’s business that sells directly to consumers via its own e-commerce network and its physical stores, as opposed to third-party retail operations.
The layoff announcement arrived days ahead of Chief Executive Chip Berg’s departure from that role, with Michelle Gass taking over on Jan. 29. As the company tries to be bigger than men’s jeans, Gass, in Levi’s earnings release on Thursday, said she saw an opportunity to grow internationally, make Levi’s own online and bricks-and-mortar sales a greater priority, and turn the brand into a larger “denim apparel lifestyle business.”
Levi’s shares fell after hours Thursday, after the company’s full-year profit forecast came in below expectations. The stock rebounded 1.3% on Friday but is still down 10.3% over the past 12 months.
Still, Levi’s direct-to-consumer sales jumped 11% during the fourth quarter, and accounted for 42% of sales overall. Duffy said that the company has pushed deeper into its direct-sales business because it gives executives greater insight into what consumers want, as well as more control over how it markets and sells its clothing. Cutting out other retailers also widens margins on sales, he noted.
Levi’s operating margins were higher in the fourth quarter. It also declared a dividend of 12 cents per share, payable in cash on Feb. 23.
But sales in Levi’s wholesale segment — the sales it gets from retailers who buy Levi’s product, then sell it to consumers — fell 2%. Better results in the U.S. and Asia were offset by a drop in Europe, the company said.
Retailers have spent the past two years trying to clear unwanted clothes from their stockrooms, and cutting prices in the process, after spiking inflation restricted many shoppers’ appetites to basics.
As Gass prepares to take the reins, she sought to put a positive spin on retail-chain sentiment. “So net-net, overall, as a company, we’re exiting the year on a strong note,” Gass said on the earnings call. “And U.S. wholesale, we’re encouraged. But as it relates to that channel, we’re not declaring victory yet. There’s been a lot of volatility this past year, some in our control, some outside. And so we are taking a cautious approach as we look forward.”
BELFAST — First its government collapsed. Then austerity began to bite. Now fresh elections are set to be cancelled, and tens of thousands of workers are going on strike.
This is Northern Ireland in 2024 — a land of political deadlock, public sector cuts and mass labor unrest, with neither British ministers in London nor local powerbrokers the Democratic Unionist Party (DUP) willing to do what is needed to restore a coherent government in this ever-divided corner of the United Kingdom.
Nearly two years after the DUP first sabotaged the Northern Ireland Executive — the cross-community government at the heart of the region’s decades-old peace process — its leadership appears no closer to ending its boycott on cooperation with Sinn Féin. The Irish republicans overtook their DUP opponents as the most popular party at the last Stormont election in May 2022, but have been waiting ever since to lead a government under a power-sharing system the DUP refuses to revive.
Similarly unwilling to fill the political vacuum is Northern Ireland Secretary Chris Heaton-Harris, who refuses to resume “direct rule” from Westminster. Northern Ireland was governed directly from London through most of its decades of bloodshed during the 20th century, and through a previous collapse of powersharing at Stormont between 2002-07.
At least partly filling the vacuum over the past year have been Northern Ireland’s senior civil servants, abandoned to run their country without the help of elected politicians. They protest they lack both the power and democratic mandate to make essential spending and cost-cutting decisions — a weakness that has left public services to wither from within.
This long-running crisis has triggered months of labor unrest, finally reducing Northern Ireland to a standstill on Thursday as 16 unions staged the region’s first coordinated mass strike in a half-century. It may not be the last.
“This is a campaign we will continue,” said Gerry Murphy of the Irish Congress of Trade Unions. “This is a campaign we will win.”
Labor pains
More than 170,000 workers — nearly a fifth of the entire workforce — shut down schools, transport links, non-emergency healthcare and almost all government-funded services on Thursday in a mass demand for long-withheld pay raises.
The promised salary hikes were secured in principle years ago as part of wider U.K. labor agreements, but most of this money has yet to reach paychecks and pensions in Northern Ireland because the relevant Stormont ministers aren’t in office. In their absence, the U.K. Treasury is withholding the required funds.
That was supposed to change as part of a conditional funding package that Heaton-Harris presented to local parties last month in a bid to break the DUP logjam. If Democratic Unionist leader Jeffrey Donaldson agreed to lead his party back to Stormont, Heaton-Harris announced, the U.K. would provide £3.3 billion in exceptional financial supports to make the relaunch of power-sharing a success. Included in the package: £584 million for the outstanding pay claims.
But to the exasperation of other parties, and despite Donaldson’s own efforts to telegraph a coming move, the DUP leader failed to persuade his most powerful deputies to grasp the offer as a moment for compromise.
Donaldson since has insisted that talks with U.K. government officials will drag out indefinitely until the DUP wins further concessions on Northern Ireland’s complex post-Brexit trading arrangements, which unionists fear are pushing the economy toward a united Ireland.
The DUP leader failed to persuade his most powerful deputies to grasp the offer as a moment for compromise | Charles McQuillan/Getty Images
Indeed, dangling billions in front of the DUP seems only to have backfired. Heaton-Harris has repeatedly said the £3.3 billion will not be forthcoming until the DUP returns to Stormont — a condition that both British unionists and Irish nationalists have denounced as blackmail.
Mass unrest
Reflecting that anger, tens of thousands of striking workers braved freezing conditions on Thursday to march in central Belfast, Londonderry and Enniskillen, venting their anger and demanding their salaries be boosted to the levels of their professional peers in England, Scotland and Wales.
As one example, they cited how a newly qualified teacher in Northern Ireland earns around £24,000 a year, versus £30,000 elsewhere in the U.K. Official U.K. statistics indicate that public sector workers in Northern Ireland have seen the value of their incomes fall by 11 percent in real terms during the past two years of government collapse.
Heaton-Harris, an arch Brexiteer who was appointed to the post by ex-PM Liz Truss during her brief Downing Street reign, has struggled to find any pressure point that works on Donaldson, whose DUP is frequently cited as the most stubborn political party in Europe.
Heaton-Harris’ most common threat — to call an early election for Stormont — has proved particularly absurd because it would potentially help the DUP. Donaldson would hope to claw back ground lost to politicians representing the moderate middle ground, who did unusually well in the 2022 vote.
Indeed, the prospect of fresh elections is one reason why Donaldson keeps playing for time. Accepting a deal now — and so accepting the current post-Brexit trade arrangements are here to stay — would likely split his party and drive support toward Traditional Unionist Voice, an even harder-line unionist rival that rejects working with Sinn Féin in all circumstances.
Reflecting that anger, tens of thousands of striking workers braved freezing conditions on Thursday to march in central Belfast | Paul Faith/AFP via Getty Images
And so the stasis — and the misery — looks set to continue.
The unions behind Thursday’s mass strike have vowed to conduct a rolling series of similar protests until Heaton-Harris untethers their pay demands from any proposed DUP sweetheart deal.
But Heaton-Harris looks poised to kick the Stormont can down the road yet again, meaning Northern Ireland’s public services keep suffering via piecemeal funding half-measures.
The minister is expected to unveil emergency legislation next week that gives both himself, and Northern Ireland’s permanent secretaries, a new “hybrid” mix of powers and responsibilities over the region.
But a former permanent secretary who oversaw the Brexit process in Northern Ireland, Andrew McCormick, said Heaton-Harris’ mismanagement of the situation to date meant neither the Stormont mandarins nor the secretary of state himself “have a legal basis for the strategic decisions that are needed. The government can and should change course as a matter of urgency. Abdication is not acceptable.”
The legislation also is expected to delay, once again, the legally required date for the next Stormont election to early 2025 — by which time a U.K.-wide general election will likely have ended the Conservative government’s 14-year reign and turned Northern Ireland into a problem for the British Labour Party.
Western warplanes and guided missiles roared through the skies over Yemen in the early hours of Friday in a dramatic response to the worsening crisis engulfing the region, where the U.S. and its allies are facing a direct confrontation with Iranian-backed militants.
The strikes against Houthi fighters are a response to weeks of fighting in the Red Sea, where the group has attempted to attack or hijack dozens of civilian cargo ships and tankers in what it calls retribution for Israel’s military offensive in Gaza. Washington launched the massive aerial bombardment of the group’s military stores and drone launch sites in partnership with British forces, and with the support of a growing coalition that includes Germany, the Netherlands, Australia, Canada, South Korea and Bahrain.
Tensions between Tehran and the West have boiled over in the weeks since its ally, Hamas, launched its October 7 attack on Israel, while Hezbollah, the military group that controls much of southern Lebanon, has stepped up rocket launches across the border. Along with Hamas and Hezbollah, the Houthis form part of the Iranian-led ‘Axis of Resistance’ opposed to both the U.S. and Israel.
Now, the prospect of a full-blown conflict in one of the most politically fragile and strategically important parts of the world is spooking security analysts and energy markets alike.
Escalation fears
Houthi leaders responded to the strikes, which saw American and British forces hit more than 60 targets in 16 locations, with characteristic bravado. They warned the U.S. and U.K. will “have to prepare to pay a heavy price and bear all the dire consequences” for what they called a “blatant aggression.”
“We will confront America, kneel it down, and burn its battleships and all its bases and everyone who cooperates with it, no matter what the cost,” threatened Abdulsalam Jahaf, a member of the group’s security council.
However, following the overnight operation, Camille Lons, a visiting fellow at the European Council on Foreign Relations, said there may now be “a period of calm because it may take Iran some time to replenish the Houthis stocks” before they are able to resume high-intensity attacks on Red Sea shipping. But, she cautioned, their motivation to continue to target shipping will likely be unaltered.
The Western strikes are “unlikely to immediately halt Houthi aggression,” agreed Jonathan Panikoff, a former U.S. national intelligence officer for the Near East. “That will almost certainly mean having to continue to respond to Houthi strikes, and potentially with increasing aggression.”
“The Houthis view themselves as having little to lose, emboldened militarily by Iranian provisions of support and confident the U.S. will not entertain a ground war,” he said.
Iran also upped the ante earlier this week by boarding and commandeering a Greek-operated oil tanker that was loaded with Iraqi crude destined for Turkey, intercepting it as it transited the Strait of Hormuz. The vessel, the St. Nikolas, was previously apprehended for violating sanctions on Iranian oil and its cargo was confiscated and sold off by the U.S. Treasury Department. Its Greek captain and crew of 18 Filipino nationals are now in Iranian custody, with the incident marking a sharp escalation in the threats facing maritime traffic.
Israeli connection
Washington and London are striving to distinguish their bid to deter the Houthis in the Red Sea from the war in Gaza, fearful that merging the two will hand Tehran a propaganda advantage in the Middle East. The Houthis and Iran are keen to accomplish the reverse.
The Houthi leadership claims its attacks on maritime traffic are aimed at pressuring Israel to halt its bombing of the Gaza Strip and it insists it is only targeting commercial vessels linked to Israel or destined to dock at the Israeli port of Eilat, a point contested by Western powers.
“The Houthis claim that their attacks on military and civilian vessels are somehow tied to the ongoing conflict in Gaza — that is completely baseless and illegitimate. The Houthis also claim to be targeting specifically Israeli-owned ships or ships bound for Israel. That is simply not true, they are firing indiscriminately on vessels with global ties,” a senior U.S. official briefing reporters in Washington said Friday.
Wider Near East crisis
The Red Sea isn’t the only hotspot where American and European forces and their allies are facing off against Iran and its partners.
In November, U.S. F-15 fighter jets hit a weapons storage facility in eastern Syria that the Pentagon says was used by the Iranian Islamic Revolutionary Guard Corps and the Shia militants it supports in the war-torn country. The response came after dozens of American troops were reportedly injured in attacks in Iraq and Syria linked back to Tehran.
Israel’s war with Hamas has also risked spreading, after a blast killed one of the militant group’s commanders in the Lebanese capital, Beirut, earlier in January. Hezbollah vowed a swift response and tensions have soared along the border between the two countries, with Israeli civilians evacuated from their homes in towns and villages close to the frontier.
All of that contributes to an increasingly volatile environment that has neighboring countries worried, said Christian Koch, director at the Saudi Arabia-based Gulf Research Center.
“There’s a lot at stake at the moment and the Kingdom of Saudi Arabia and others are extremely worried about further escalation and then being subject to retaliation,” he said. “Now, the danger of regional escalation has been heightened further, which could mean that Iran will get further involved in the conflict, and this is a dangerous spiral downwards.”
While long-planned efforts to normalize ties between the Saudis and Israel collapsed in the wake of the October 7 attack and the subsequent military response, Riyadh has pushed forward with a policy of de-escalation with the Houthis after a decade of violent conflict, and sought an almost unprecedented rapprochement with Iran.
“Saudi Arabia has had one objective, which is to prevent this from escalating into a wider regional war,” said Tobias Borck, an expert on Middle East security at the Royal United Services Institute. “It has attempted over the last few years to bring its intervention in the war in Yemen to a close, including through negotiations with the Houthis and actually from all we know from the outside, [they] are reasonably close to an agreement.”
The Western coalition is therefore a source of anxiety, rather than relief, for Gulf States.
“Saudi Arabia and UAE are staying out of this coalition because mainly they don’t want to have the Houthis attack them as they had been for years and years with cruise missiles,” said retired U.S. General Mark Kimmitt, a former U.S. assistant secretary of state for political-military affairs. However, American or European boots on the ground are unlikely to be necessary, he added, because “our capabilities these days to find, fix and attack even mobile missile launchers is pretty well refined.”
Far-reaching consequences
At the intersection of Europe and Asia, the Red Sea is a vital thoroughfare for energy and international trade. Maritime traffic through the region has already dropped by 20 percent, Rear Admiral Emmanuel Slaars, the joint commander of French forces in the region, told reporters on Thursday.
According to data published this week by the German IfW Kiel institute, global trade fell by 1.3 percent from November to December, with the Houthi attacks likely to have been a contributing factor.
The volume of containers in the Red Sea also plummeted and is currently almost 70 percent below usual, the institute said. In December, that caused freight costs and transportation time to rise and imports and exports from the EU to be “significantly lower” than in November.
In one indication of the impact on industrial supply chains, U.S. electric vehicle maker Tesla said Friday it would shut its factory in Germany for two weeks.
Around 12 percent of the world’s oil and 8 percent of its gas normally flow through the waterway, as well as hundreds of cargo ships. Oil prices climbed more than 2.5 percent following the strikes, fueling market concerns of the impact a wider conflict could have on oil supplies from the region, especially those being shipped through the Strait of Hormuz, linking the Persian Gulf with the Indian Ocean and the world’s most important oil chokepoint.
The Houthi attacks on the Red Sea, one of the world’s busiest waterways, have already caused major shipping companies, including oil giant BP, to halt shipments through the Red Sea, opting for a lengthy detour around the Cape of Good Hope instead.
According to Borck, the impact on energy prices has been limited so far but will depend on what happens next.
“We need to look for two actors’ actions here. One is the Houthis, how they respond, and the other one is, of course, looking at how Iran responds,” he said. While Tehran has the “nuclear option” of closing the Strait of Hormuz altogether, it’s unlikely to do so at this stage.
“I don’t think the Strait of Hormuz is next. I think there would be quite a few steps on the escalation ladder first,” he added.
But Simone Tagliapietra, an energy expert at Brussels’ Bruegel think tank, warned that a growing confrontation with Iran could lead to tougher enforcement of sanctions on its oil exports. The West has turned a blind eye to Tehran’s increasing sales to China in the wake of the war in Ukraine, which has relieved some pressure on global energy markets.
A crackdown, he believes, “could see global oil prices rising substantially, pushing inflation higher and further complicating the efforts of central banks to bring it under control.”
However, Saudi Arabia and the UAE could help compensate for such a move by ramping up their own production — provided they’re willing to risk the ire of Iran.
Gabriel Gavin reported from Yerevan, Armenia. Antonia Zimmermann from Brussels and Jamie Dettmer from Tel-Aviv.
Laura Kayali contributed reporting from Paris.
Gabriel Gavin, Antonia Zimmermann and Jamie Dettmer
Alaska Airlines, United Airlines and Turkish Airlines have all grounded their Boeing 737 Max 9 airplanes after part of one such jet tore away during an Alaska Airlines flight on Friday. But despite the potential safety risks for travelers and further damage to Boeing’s BA, -8.03%
reputation, some Wall Street analysts, for now, have downplayed the financial impact for the jet maker.
In part, they pointed to the company’s status as one of two major players in aircraft production — the other being Airbus EADSY, +3.52%.
They also cited a tighter supply of available aircraft and limited near-term impact, at least while investigators try to figure out the cause of the incident.
Those airlines and others took the action over the weekend after a panel on a jet blew out about 10 minutes into Alaska Airlines Flight 1282 at an altitude of about 16,000 feet.
No one died in the incident. But the Federal Aviation Administration ordered the temporary grounding of certain Boeing 737 Max 9 aircraft. The order covered 171 planes.
Still, some Wall Street analysts on Monday said to buy the stock anyway. They said the latest difficulties with the aircraft — which follow the 2019 grounding of Max jets by many nations following two fatal crashes — were unlikely to have a big near-term financial impact.
BofA analysts, in a research note dated Sunday, said that “at this point in time, due to the duopoly nature of the industry, we do not see this impacting orders for any of the 737 MAX variants. However, if the hits to the program do keep coming … at some point, the flying public may lose confidence in the 737 MAX which could ultimately impact sales.”
The analysts said it wasn’t clear yet whether the blowout on Friday was due to an assembly mistake at Boeing, an improper installation from fuselage maker Spirit AeroSystems or oversight issues elsewhere. But they noted that the aircraft was relatively new, having been delivered on Oct. 31. And they said that “some scrutiny must be saved for regulators as well, as the FAA is ultimately responsible for certificating these aircraft before delivery.”
Spirit AeroSystems’ stock SPR, -11.13%
was down 11%.
Analysts at William Blair also said they didn’t expect a big hit to Boeing’s financials.
“While the Alaska Airlines door plug accident was terrifying, we do not believe that it will have a major financial impact, unless another incident occurs after the aircraft returns to service,” they said in a note on Monday.
Analysts there estimated that over the past two months, the Max 9 made up less than one-fifth of Boeing’s total deliveries. They said those deliveries would only be “modestly impacted over the first quarter as it could take some time to determine the cause.”
Of the 23 analyst ratings on Boeing’s stock tracked by FactSet, 18 are buy ratings or the equivalent.
However, Morgan Stanley analyst Ravi Shanker said the 737 Max 9 issues will likely disrupt first-quarter results for United Airlines UAL, +2.78%
and Alaska Air ALK, -0.21%.
“This will hopefully be a situation resolved in days/weeks rather than months, but it will also serve as a reminder of how fragile airline capacity can be despite the overhang of capacity,” Shanker said in a Monday research note.
United Airlines’ stock rose 2.4% on Monday, while Alaska Air’s dipped by 0.3%.
Along with United Airlines, Alaska Airlines and Turkish Airlines, Copa Airlines and Aeromexico grounded about 40 Boeing 737 Max 9 planes, according to reports.
According to Deutsche Bank analysts, the affected fleet accounts for 16.1% of Alaska Airlines flights and 6.6% of United flights, although United has more 737 Max 9 aircraft than Alaska.
Other airlines with the plane in their fleet include Jet Airways of India with one plane, Jin Air of Korea with three, KLM Royal Dutch Airlines KLMR,
with five and Korean Air Lines 003490, -1.52%
with nine, according to Planespotter.net.
European regulators also grounded the 737 Max 9 for inspection.
Some major airlines do not have any 737 Max 9s in their fleets, including American Airlines AAL, +7.21%,
Southwest Airlines LUV, -0.10%
and Air Canada AC, +3.42%,
according to reports.
Shares of Uber Technologies Inc. and the ride-hailing giant’s smaller rival, Lyft Inc., have sprinted higher this year. But analysts on Friday suggested there might not be much left in the tank for either stock heading into 2024.
Nomura analysts Anindya Das and Masataka Kunugimoto on Friday downgraded Uber UBER, -2.49%
to a neutral rating from buy, arguing that most of the things that could drive the stock higher are already baked into the price. They also downgraded Lyft LYFT, -3.54%
to their equivalent of a sell rating from buy, saying the company failed to fully capitalize on the travel industry’s post-pandemic recovery.
Shares of Uber, which closed out the year up 142%, were down 2.5% on Friday. Lyft’s stock gave up 3.4% and finished 2023 up 34.8%.
Uber, the analysts said, had managed to grow this year while occasionally turning a profit, and consolidated its grip on the ride-sharing markets in the U.S. and Canada. Meanwhile, Lyft, they said, had stumbled in its efforts to take advantage of the travel rebound after pandemic restrictions eased, cutting more staff this year after doing the same in 2022.
After years of losing money, they said Uber’s stronger financials this year allowed it to refinance its debt at a lower interest rate and extend the terms of that debt. They noted the company recently joined the S&P 500 Index SPX
and that the market is expecting more stock buybacks from the company, as well as interest-rate cuts by the Federal Reserve next year.
“Thus, most of the milestones and catalysts that we were anticipating to boost Uber’s stock value have been largely met,” they said.
They added: “At this time, we think most of the catalysts for the stock are already priced in, and Uber is fairly valued at the current price. We therefore downgrade it to Neutral from Buy.”
Lyft has tried to cut its prices to compete with Uber, and has held off on expanding into areas like food delivery. But as travel demand settles, the analysts suggested, the advantages would still flow to its archrival.
“We expect 2024 to be more of a ‘normal’ year, in terms of people’s propensity to travel,” the analysts said. “Once the current rebound in travel subsides, we think Lyft’s subscale market positioning, and lack of cross-selling opportunities (unlike Uber), could constrain topline growth for the company.”
“Offsetting a more moderate pace of ridership growth by raising prices would be challenging for Lyft,” they said, “as we think it would be bound by the actions of its larger and more profitable peer, Uber.”
Elon Musk just got an early, unwelcome Christmas present from Europe: the bloc’s first-ever investigation via its new social media law into X.
The European Commission on Monday opened infringement proceedings under the Digital Services Act (DSA) into X, formerly known as Twitter, after the billionaire and his company were subjected to repeated claims they were not doing enough to stop disinformation and hate speech from spreading online.
The four investigations focus on X’s failure to comply with rules to counter illegal content and disinformation as well as rules on transparency on advertising and data access for researchers. They will also scrutinize whether X misled its users by changing its so-called blue checks, which were initially launched as a verification tool but now serve as an indicator that a user is paying a subscription fee.
“The Commission will carefully investigate X’s compliance with the DSA, to ensure European citizens are safeguarded online — as the regulation mandates,” Margrethe Vestager, the Commission’s executive vice president for digital policy, said in a statement.
“We now have clear rules, ex-ante obligations, strong oversight, speedy enforcement and deterrent sanctions and we will make full use of our toolbox to protect our citizens and democracies,” said EU Internal Market Commissioner Thierry Breton.
“X remains committed to complying with the Digital Services Act, and is cooperating with the regulatory process,” Joe Benarroch, an X executive, said in an email to POLITICO.
The investigations, which do not constitute wrongdoing and will lead to a monthslong probe, could lead to fines of up to 6 percent of a company’s global revenue.
The rulebook, which started applying in late August, represents the most widespread attempt by any region or country in the Western world to hold social media companies to account for what is posted on their platforms. That includes lengthy risk assessments and outside audits to prove to regulators these companies are clamping down on illegal content like hate speech.
The Commission, which enforces the DSA on 19 so-called Very Large Online Platforms, or VLOPs, has already taken preliminary steps like requests for information against several other social media networks including Instagram, Facebook, TikTok, YouTube and Snapchat. The focus has been on how they handle illegal content, combat disinformation and protect minors.
While Europe’s new social media rules only came into full force in late summer, X has been squarely on Brussels’ radar.
Musk fired half of the company’s employees — including almost all of its trust and safety team — in November, 2022. That included many of the company’s European Union-focused policy jobs, either in Brussels or in Dublin, where the company has its EU headquarters.
The social networking giant also pulled out of the EU’s code of practice on disinformation in May, an industry pledge coordinated by the Commission that will soon serve as a part of the bloc’s DSA rules.
Musk publicly committed X to complying with the bloc’s DSA rules, though he remains a vocal advocate for almost unfettered free speech rights for people that use his platform.
Yet it was after Hamas militants attacked Israel on October 7 that Commission regulators upped their attention, according to four officials with direct knowledge of the matter who were granted anonymity to discuss internal discussions. Part of the investigations, linked to potentially illegal content, resulted from posts associated with the ongoing Middle East war.
In the days and weeks following the Middle East attack, X was flooded with often gruesome images of suspected beheadings — often with few, if any, removals by the tech giant. Repeated requests for information from the company went unanswered, while discussions with X representatives, including at meetings in San Francisco with X engineers in the summer, often left Commission officials unsatisfied, according to two of the individuals who spoke to POLITICO.
The company was the first to receive a request for information from the Commission in October about how it has tackled problematic content like graphic illegal content and disinformation linked to Hamas’ attack on Israel.
The Commission on Monday said it would investigate whether X’s requirement to quickly remove illegal content, once flagged, had been respected, including “in light of X’s content moderation resources.” It said it would also examine whether X’s so-called community notes, or crowdsourced fact-checking program, and policies to limit risks for election integrity complied with the DSA.
Brussels will also review whether X’s so-called blue checks, markers that can be bought by accounts to show they have been verified, could trick users into thinking blue check-holding accounts are more trustworthy. Regulators will similarly look into changes to how outsiders could analyze X’s data after the company replaced free access to this data with a paid version that costs up to $240,000 (€220,000) a month. X’s mandatory publicly accessible library of ads that ran on its platform will also be part of the investigations.
The investigations could lead to different results in the coming months from a sweeping fine to orders to impose specific measures and commitments from X to make changes.
“It is important that this process remains free of political influence and follows the law,” added Benarroch, the X executive. “X is focused on creating a safe and inclusive environment for all users on our platform, while protecting freedom of expression, and we will continue to work tirelessly toward this goal.”
Advanced Micro Devices is on a roll this week, with its shares marching higher since the chip maker revealed ambitious plans to push into artificial intelligence. Investors looking to dive in best be warned: the stock now looks more expensive than Nvidia.
Continue reading this article with a Barron’s subscription.
While Advanced Micro Devices Inc. shares didn’t enjoy a Wednesday bump during the company’s artificial-intelligence event, they were rallying sharply Thursday as analysts reflected on the chip maker’s presentation.
Chief Executive Lisa Su and her team “put together one of the most impressive new product event/launches by our reckoning in the last decade, perhaps ever,” Rosenblatt Securities analyst Hans Mosesmann wrote in a note to clients.
The launch of AMD’s AMD, +7.09%
MI300X AI/graphics-processing-unit accelerator “was not just a speeds and feeds geek fest (it was that for sure, with AMD claiming superiority in AI inferencing), but an industry movement coalescing around the concept of ‘open’ sourced technologies are preferred (demanded really), to address the insanely fast/accelerating life-changing thing that AI has become,” Mosesmann continued.
He was also impressed by the company’s talk of its software platform ROCm, which he thinks is catching up to Nvidia Corp.’s NVDA, +1.54%
CUDA.
“Of course, Nvidia is not going away, and we are quite sure will remain the dominant AI player for years to come but AMD we feel made the case yesterday that they will be an important AI innovator on a secular basis,” Mosesmann noted, as he kept his outperform rating and $200 target price on the stock.
AMD shares were up 6% in Thursday morning trading.
Baird’s Tristan Gerra was also impressed.
“Rapidly unfolding hyperscaler engagements, highly competitive AI architecture specs, along with accelerated new product roadmap, bode well for share gains and continued acceleration in AI-related revenue for AMD beyond 2024, while faster-than-expected rate of adoption so far could potentially drive upside in the AI revenue outlook for 2024, in our view,” he wrote.
Gerra also sees the potential for “high-volume deployments,” thanks to the “significant software milestones” AMD is showing. He rates the stock at outperform with a $125 target price.
TD Cowen’s Matthew Ramsay said that AMD’s event reinforced his belief that the company “is well positioned to meaningfully participate” in the large total addressable market for AI accelerators.
The company called out Microsoft Corp. MSFT, -0.01%,
Meta Platforms Inc. META, +2.41%
and Oracle Corp. ORCL, -0.08%
as customers, announcements that were “strong” but not “surprising,” in Ramsay’s view.
“We remain encouraged that AMD is making an impressive case (and is getting customer support) to provide adaptive computing solutions for both training and inference in increasingly large [generative-AI] infrastructure builds,” he wrote. “We believe this signifies a strong AI strategy of delivering a broad portfolio of [central processing unit], GPU, and [field-programmable gate array] assets, with open software that enables easily deployed AI workloads while leveraging the company’s existing partnerships to accelerate its AI ramps at-scale.”
Ramsay has an outperform rating and $130 target price on AMD shares.
BRUSSELS — Eva Kaili and Francesco Giorgi had left nothing to chance.
The duo that would later become the most famous — many would say infamous — couple in the European Union capital had been gearing up for this moment for years.
As Qatar prepared to host the 2022 FIFA World Cup, they were among the Gulf state’s fiercest advocates in Brussels, defending its record on human rights and fending off criticism of its treatment of migrant workers.
And now, less than a week before the high-profile soccer tournament was to kick off, it was all coming to a head. At a crucial hearing in the European Parliament, Qatar’s Labor Minister Ali bin Samikh Al Marri — aka “the Doctor” — would come in person to plead his case before the chamber’s human rights committee.
In the preceding days, Kaili, a Greek lawmaker who was then a vice president of the European Parliament, had ramped up her efforts. According to public records, interviews and a cache of investigative files seen by POLITICO, she had flown back and forth to Doha and spent hours pleading and cajoling fellow lawmakers to give Qatar a clean bill of health on human rights.
At several points, she turned to her partner, Giorgi, for advice. “Who else should I talk to?” she texted him on November 14, according to transcriptions of her WhatsApp messages included in the police investigation files.
While Kaili worked the phones, Giorgi, an Italian parliamentary assistant, had been putting the finishing touches to the Qatari minister’s speech. In police surveillance photographs taken three days before the hearing, he can be seen poring over the text with his longtime boss, Pier Antonio Panzeri — a former EU lawmaker who Belgian prosecutors would later describe as the mastermind of a sweeping cash-for-influence operation known as “Qatargate.”
Per their usual working method, the Italian-speaking Panzeri wrote the speech in his native language and then passed it on to Giorgi for translation. With one day to go, Giorgi and Kaili huddled with Al Marri in his suite at the 5-star Steigenberger Wiltcher’s hotel, according to hotel video recordings obtained by the police.
Finally, it was the big day. As the minister took to the stage on November 14, 2022, Kaili nervously texted her partner again to ask if she should show up in person.
“Don’t come,” Giorgi replied via WhatsApp. “I’m afraid you will be exposed. To enter with the baby, everyone will notice u.”
She replied: “I don’t want to be exposed.”
So she stayed with the couple’s child, while the rest of the key suspects in what would become the Qatargate scandal crowded into the auditorium where Al Marri — the man police would later describe as the leader in his country’s efforts to corrupt the European Parliament — was taking to the stage.
At a hearing, Ali bin Samikh Al Marri laid out the case for Qatar’s labor reforms and why his country deserved the world’s respect despite reports alleging abuse of migrant laborers | Pierre Albouy/EFE via EPA
If everything went well and Al Marri came out satisfied with their efforts over many months of lobbying, the Italian former lawmaker stood to make good on a long-standing business relationship he and Giorgi would later tell police was worth more than €4 million.
And if it failed? Nobody wanted to know.
As Al Marri spoke, laying out the case for Qatar’s labor reforms and why his country deserved the world’s respect despite reports alleging abuse of migrant laborers, Kaili and her partner of five years WhatsApped back and forth, as one might do while watching a major sporting event from two different locations.
“So Arabic and speaks without reading,” Giorgi texted.
A few minutes later, Kaili commented: “He’s losing it a bit.”
As other lawmakers took to the floor following Al Marri’s speech, she bristled at criticism of Qatar.
“Who is this fat,” she texted her partner, referring to one lawmaker, adding an adjective which to her was an insult: “Communist.”
As Al Marri wrapped up, the Greek lawmaker asked: “Why he didn’t follow the speech.”
Finally, it was over.
Giorgi texted Kaili: “Ela, we did everything we could.”
For the watch party, a major milestone had been crossed. A senior Qatari representative had been given a chance to address criticism in what could have been a fiercely critical environment.
So far, so good. Except what they didn’t know was that Giorgi and Panzeri had been under surveillance by Belgian secret services for months, suspected of taking part in a sweeping cash-for-influence scheme under which Qatar paid to obtain specific legislative outcomes. Their communications, including with Kaili and other suspects, would be scooped up as part of the wiretaps and the subsequent investigations.
Eva Kaili maintains her defense of Qatar was part of her job as a representative of the European Union | Julien Warnand/EFE via EPA
Kaili denies any wrongdoing in a scheme in which police say Panzeri and others accepted money from Qatar, Morocco and Mauritania in exchange for pushing their interests in the European Parliament. Kaili maintains her defense of Qatar was part of her job as a representative of the European Union and that the investigation into her actions breached the parliamentary immunity enjoyed by sitting MEPs.
There is no other evidence in the hundreds of pages of wiretapping by the secret services that indicates Kaili directly received money from Qatar or other countries. Giorgi has provided details of the operation to police, but his lawyer has argued his statements were extracted under duress.
And yet, as the pro-Qatar operation turned to its next challenges, Belgian investigators who had taken over the probe from the secret service were closing in.
On the morning of December 9, the trap slammed shut. Kaili, Giorgi, Panzeri and a couple of other suspects were arrested and thrown into jail on charges of corruption, money laundering and participating in a “criminal conspiracy.” Two other members of the European Parliament, Marc Tarabella and Andrea Cozzolino, would also be arrested and charged.
Police published photographs of bags stuffed full of hundreds of thousands of euros which they had recovered in Panzeri’s flat, at Kaili and Giorgi’s home and in a suitcase wheeled by Kaili’s father — instantly turning their probe into a page one news story for outlets around the Continent.
* * *
The shock arrests of one of the highest-ranking members of the European Parliament, her boyfriend and their alleged accomplices smashed open a window onto a murky world of lobbying for foreign governments in the heart of EU democracy.
The Brussels bubble, as the EU’s policymaking apparatus is known, likes to think of itself as a global paragon of democracy, transparency and respect for human rights. There’s another side of the EU capital, however — an ecosystem of hidden connections and low-grade corruption, of back-scratching politicians and the filter feeders that gravitate toward centers of political power and public largesse.
While the Qatargate case has yet to go to court and several of the key players, including Kaili, insist they are innocent of the charges, the scandal has already led to reforms. The European Parliament has introduced changes bolstering transparency, and the creation of an ethics body establishing common standards for EU civil servants is being negotiated.
The story of Qatargate is also still being written. And nobody better captures the human element of this complex affair — and the cozy, transactional world in which it took place — than Kaili and Giorgi.
Start with Kaili: A political celebrity in her native Greece, where she’d gained fame as a TV presenter, at the time of her arrest she was one of Brussels’ most prominent politicians, widely believed to be bound for higher office either within the EU system or back home. She’d recently had her first child with Giorgi, an ambitious parliamentary assistant nine years her junior whose wavy blond hair and dimpled smile were well known in the European Parliament.
Together, they formed a formidable power couple on the Brussels circuit — as well as a shining example of what Europeans hailing from their respective Mediterranean homelands can achieve in the EU system if they play their cards right.
And yet, in an instant, it was all over. Both of them were in jail, their reputations in tatters, their infant child outside and in the care of family members. In the space of a single morning, the EU capital’s golden couple had become the most notorious duo in town.
Pier Antonio Panzeri hired Francesco Giorgi as an intern in 2009 | European Union
To understand what propelled this sudden plunge, it helps to dial back the clock to the earliest days of their relationship, five years before anyone heard of the so-called Qatargate scandal.
It was a Monday in early 2017. Giorgi was at work doing a familiar task — interpreting for his language-challenged boss, Pier Antonio Panzeri, at a conference in Parliament.
The two men went back a long way. Panzeri had been Giorgi’s boss for nearly a decade already, having hired him first as an intern in 2009 and then as a full-blown accredited assistant. The elder Italian was a well-known politician in Parliament — a shrewd operator on the left wing of Italy’s Partito Democratico, a trade union veteran from Milan who turned to international affairs late in his 15-year parliamentary career.
But he was a man of his generation — only really comfortable speaking in Italian and, according to Giorgi, unable to switch on a computer.
For all of those things, there was Giorgi. Then aged around 30, he was in a good place professionally and socially. Like thousands of Italians who flock to Brussels every year, he looked to the EU system as a land of opportunity. And the system had served him well. Paid handsomely, he had a front-row seat on his boss’s dealings, which included travel to places like Rabat, Morocco and Doha, Qatar, as well as more mundane tasks.
But nearly 10 years in, Giorgi was ready for change. And little did he know, the embodiment of that change was about to walk in the door.
While Kaili and Giorgi had seen each other in the halls of the European Parliament a few times since her election in 2014, according to her interviews with Belgian police, that Monday meeting in Brussels would stick out for them as their first proper encounter.
The mutual interest must have been powerful because it’s hard to overstate the disparity, in terms of age and political and financial power, that separated Giorgi from Kaili as she walked in, heading a NATO delegation.
To put it bluntly, Giorgi was a cog in the machine with no political weight. By contrast, Kaili was already a well-established politician in Brussels and very well plugged-in with Greece’s political and business elite. She had barreled her way up through the ranks of the Greek socialist party, PASOK, while still in her twenties, before making the jump to the European Parliament in 2014. In her office, Kaili employed no fewer than three Giorgis.
And yet the young Italian, who’d grown up sailing in the Mediterranean and skiing in the French Alps, decided to try his luck. According to Kaili’s testimony to police, after this initial encounter, the two of them dined “two or three times.” Giorgi spent the better part of a year trying to woo the Greek lawmaker, but it was tough going as she claimed to be far too busy with her work to carve out time for a serious relationship.
It was only after about a year, she said, that things became “serious.” Marking the transition from casual dating to partnership, they made a shared commitment: co-investing in an apartment located just behind their shared place of work, the European Parliament. It was Christmas Eve, 2019, according to Giorgi’s statements to police.
After Kaili returned to Greece in 2019 to campaign for reelection, Giorgi joined her a few months later. In February 2021, they were joined by a baby girl.
Eva Kaili returned to Greece in 2019 to campaign for reelection | Menelaos Myrillas/SOOC/AFP via Getty Images
But that’s where their story departs from the norm. Most wage-earning couples don’t live surrounded by stacks of cash. Most EU bubble couples don’t possess a “go bag” brimming with bank notes, or end up as suspects in sprawling corruption probes.
Part of the explanation can be found in their link to Panzeri, the Svengali-like third wheel in their relationship, whom Giorgi described initially as a “father figure” and whom Kaili later called a manipulator taking advantage of her boyfriend’s “idealistic” personality.
Indeed, in his interviews with Belgian investigators, Giorgi traces back the “original sin” of his involvement in Qatargate to a deal he agreed to with Panzeri shortly after becoming his employee in 2009. Under that arrangement, Giorgi allegedly agreed to pay Panzeri back €1,500 per month of his wages in exchange for the privilege of working for him, a relatively common scheme in the Parliament. (As a point of comparison, when the scandal broke, Giorgi was earning some €6,600 per month as an assistant to a different MEP).
The deal was to prove an introduction to a transactional world in which Panzeri — as a lawmaker and later, as the head of Fight Impunity, a nongovernmental organization he launched after leaving Parliament — had no trouble accepting large sums of cash from foreign governments in exchange for services rendered.
From 2018, Giorgi and Panzeri dove headlong into a partnership allegedly based on lobbying for Qatar in exchange for big cash payments. According to Giorgi’s statements to police, they agreed on a long-term lobbying agreement worth an estimated €4.5 million and to be split 60/40, with the larger share going to Panzeri.
Once arrested, Giorgi and Panzeri would butt heads about the precise role of each in the lobbying arrangement. But one of the younger Italian’s key tasks was to pick up cash payments at various places around Brussels, often from total strangers. Once he picked up €300,000 in cash near the Royal Palace from a person driving a black Audi with Dutch license plates. Another time, the drop-off happened in a parking lot near the canal.
In total, there were around ten such drop-offs, two or three per year, with the smallest amount around €50,000.
The alleged quid pro quo was that Giorgi and Panzeri would deliver specific parliamentary and public relations outcomes to their clients, which in addition to Qatar included Morocco and Mauritania. The ever-meticulous Giorgi kept a spreadsheet on his computer on which he documented hundreds of influence activities that the network allegedly carried out between 2018 and 2022.
It records more than 300 pieces of work, using a network of aides inside parliament whom they called their “soldiers,” according to the files.
Even as they pressed their clients’ interests, they were also trying to exploit their lack of familiarity with the workings of the bubble, reporting certain actions that, according to Giorgi, they actually had no influence over.
The scheme, Giorgi later told police, “relied on the ignorance of how parliament works” — on the part of the duo’s clients.
Panzeri, through his lawyer, declined to comment for this article.
* * *
As Giorgi dug deeper into his partnership with Panzeri, his romance with Kaili was expanding into a business partnership.
While each already had other properties — including Kaili’s two apartments in Athens (which she said were worth a combined €400,000) and one in Brussels (estimated by Kaili at €160,000) and one belonging to Giorgi purchased for €145,000 in Brussels — they were soon eyeing other purchases.
Eva Kaili and Francesco Giorgi purchased a flat near the European Parliament for €375,000 in 2019 | Leon Neal/Getty Images
After the Christmas Eve purchase of their flat near the Parliament for €375,000 in 2019, they purchased a plot of land on the Greek island of Paros for €300,000 in 2021 which they planned to develop into four holiday villas and at least one swimming pool, according to files recovered from Giorgi’s computer in a folder called “Business”. Then, in 2022, came the purchase of their second apartment, a penthouse right next to the Parliament, worth €650,000, according to Giorgi’s statements to police.
All told, the couple’s joint real estate purchases amounted to more than €1.3 million over a period of two years.
In between these purchases, there were other expenses: sailing holidays, a Land Rover bought for €56,000 and a fully refurbished kitchen. On several occasions, the couple sought to minimize their outlay by exploiting their insiders’ knowledge of the system.
According to documents seized at Giorgi’s home, a Qatari diplomat helped him get a discount on the Land Rover by taking advantage of special conditions for diplomatic staff, reducing the sticker price by about €10,000.
By any normal standards, Kaili and Giorgi were already wealthy based on their income.
In addition to taking home €6,600 per month as a parliamentary assistant, Giorgi received €1,000 in social benefits for their daughter, €1,800per month from the rental to the Mauritanian ambassador and — since the envoy never occupied the flat — €1,200 in cash from two women to whom he sublet the flat for a few months.
As for Kaili, she earned about €10,000 before taxes plus about €900 in monthly rent from a flat she owned in Brussels.
All told, the couple was pulling in well over €20,000 per month, an eye-watering amount in a country where the median monthly wage is €3,507 before taxes.
Yet even these substantial monthly earnings seem not to have covered the mounting costs related to their real estate investments or make the couple feel fully secure. Despite the fact her partner was pulling in more than three times the Belgian median wage, Kaili would tell police during the first interview after her arrest: “I know that Francesco doesn’t have a lot of money because he isn’t able to partake in all of our expenses.”
What motivated this drive for accumulation? According to a person who knew Kaili professionally and asked not to be named due to fear of retaliation, the answer lies partly in her background growing up without much money in Thessaloniki, Greece. “It feels like she grew up with a lot of deprivations,” the person said. “She wanted to feel that even if she quits politics, she will have a comfortable life.”
According to a person who knew Kaili professionally, the answer to her drive for accumulation lies partly in her background growing up without much money in Thessaloniki | Sakis Mitrolidis/AFP via Getty Images
As a result, Kaili tended to be very focused on financial opportunities. “She loved people with power and money. She was always, ‘You know this event is going to have businessmen,’” the person added. “And she always liked to have houses and property stuff, but she was never into luxury stuff.”
As for Giorgi, the son of a school director and import-export entrepreneur, he grew up in more comfortable circumstances in a town near Milan.
But as the junior partner in his relationship with Kaili, he may have struggled to keep up financially with a partner who earned more than he did and kept company with wealthy entrepreneurs and crypto bros.
“I have never loved luxury. I don’t know why I lost my way,” he told police during his first interview shortly after his arrest.
* * *
In interviews with police, Giorgi admitted to being part of a scheme, with Panzeri, to take hundreds of thousands of euros in cash from foreign governments — admissions his lawyer now says he made under pressure from police who he says threatened to take away his daughter.
But Kaili always maintained that she had nothing to do with the setup. Not only does she claim ignorance about the ultimate source of much of the money found in her apartment, and on her father; she also told police that she had nothing to do with Panzeri and Giorgi’s deals with foreign governments — an argument that her partner has always backed up, telling police early on that she had nothing to do with the scheme.
Panzeri, however, says the opposite. He alleges that in the spring of 2019, Kaili was part of a pact struck with Qatar to fund several MEPs’ election campaigns to the tune of €250,000 each. Giorgi and Panzeri both attest that a deal like this took place — but disagree on whether Kaili was involved.
In any case, having forged a reputation as a tech policymaker, Kaili’s work as a lawmaker veered suddenly toward the Middle East and the world of human rights, particularly in the Gulf, from 2017 onwards the year she met Giorgi. She traveled to Qatar for the first time later that year, at the invitation of another lawmaker, and made trips — some with Giorgi, some without — in 2020 and 2022.
In early 2022, just after she became a Parliament vice president, she asked the chamber’s president, Roberta Metsola, to give her files related to the Middle East and human rights. “I hope I didn’t make it difficult for you,” Kaili WhatsApped Metsola. “You gave me everything I love the most!” She was later designated as the vice president who would replace Metsola in her absence on issues related to the Middle East.
In the days and weeks leading up to the kickoff of the World Cup, Kaili and Giorgi’s work increasingly overlapped on two main files: opposition to a resolution critical of Qatar and a deal Doha was seeking with the EU that would allow its citizens to travel to the bloc without a visa.
On November 12, two days before Qatar’s labor minister would appear before the European Parliament, she reached out to Metsola, offering her tickets to the tournament in Doha.
“My dear President!” she wrote to Metsola. “Hope you are well. I have to pass you an invitation for the World Cup, you [sic] or your husband and boys might be interested,” she wrote on WhatsApp.
Eva Kaili reached out to European Parliament President Roberta Metsola, offering her tickets to the World Cup in Doha | Sean Gallup/Getty Images
It’s not clear what, if anything, Kaili asked from Metsola in exchange for the tickets. Throughout her dealings with lawmakers over Qatar, the Greek lawmaker would occasionally delete the messages she had sent. This includes her side of the rest of the conversation with Metsola — except for one text: “The rest I disagree too but I believe they will digest if we get the visa,” she wrote.
(A spokesperson for the Parliament president said Metsola never accepted any tickets to the World Cup and did not read Kaili’s messages before they were deleted.)
With the World Cup having started, the next big challenge awaiting Kaili, Giorgi and Panzeri was a plenary session in Strasbourg where rival politicians aimed to criticize Qatar’s human rights record weeks before the World Cup by putting a resolution on the agenda. Once again, they ramped up their lobbying.
So noticeable was the pro-Qatari line being pushed by Kaili and others affiliated with Panzeri that it started raising eyebrows among their colleagues.
“There were some very strange opinions being voiced on how we should not criticize Qatar, and we should rather recognize the reforms they were making and so on,” remembered Niels Fuglsang, a Danish MEP from the same S&D group. “I thought it was obvious that our group should criticize this, we are social democrats, we care about workers’ rights and migrants’ rights.”
For example, on November 21, Kaili pressed José Ramón Bauzá Díaz, a Spanish centrist MEP who ran the Qatari-EU friendship group, over his political faction’s stance on the resolution, poised to slam Qatar’s human rights track record.
“So, your group wants to vote in favor of a resolution Against Qatar World Cup,” she WhatsApped to him. He said: “It is crazy.” She went on to press him to take a pro-Qatari stance and reject the resolution.
Later that day, in a now-infamous video, Kaili took to the stage during Parliament’s plenary session and sung the praises of Qatar. “I alone said that Qatar is a front-runner in labor rights,” she said. “Still, some here are calling to discriminate them. They bully them and they accuse everyone that talks to them, or engages, of corruption. But still, they take their gas.”
With a crunch vote on the resolution’s final wording still to take place on November 24, Kaili was still going strong, texting with Abdulaziz bin Ahmed Al Malki, the Gulf country’s envoy to the European Union and NATO.
During this exchange, the Qatari gave Kaili direct instructions to take action on legislation of interest to Qatar.
“Hi Iva,” wrote the Qatari in a WhatsApp message on November 24. “My dear my ministry doesn’t want paragraph A about FIFA & Qatar. Please do your best to remove it via voting before 12 noon or during the voting please.”
Kaili deleted her responses.
Eva Kaili has challenged the lifting of her immunity in an EPPO investigation at the European Court of Justice | Nicolas Bouvy/EPA via EFE
But the recipient appeared to be pleased with what she texted, writing back a few hours later: “Thanks excellency” with a hands-clasped-in-prayer emoji.
The Qatar Embassy in Brussels and the spokesperson’s office in Doha did not respond to requests for comment.
* * *
Plainclothes Belgian police arrested Giorgi at 10:42 a.m. on December 9 at his home in Brussels. Earlier, they had picked up Panzeri. According to her statements to police, Kaili did not immediately know what had happened and originally thought Giorgi was involved in a car accident. She was told by police that her partner had been arrested.
Having tried and failed to get through by phone to Panzeri and his friends, Kaili set about trying to get rid of the stacks of cash in her apartment.
She headed to the safe that Giorgi had installed in their apartment and started to shovel stacks of bills into a travel bag. On top of them, she placed baby bottles for her child as well as a mobile phone and a laptop computer. Then she told her father, a civil engineer and sometime political operator who was visiting the family in Brussels, to take the bag and go to a hotel, where her father’s partner and Kaili’s baby were waiting. “I didn’t leave him the choice,” she later told police. “I just said, ‘Take this and go.’”
A few hours later, police followed Kaili’s father as he walked to the Sofitel, a short distance from their flat. According to a person familiar with the details of the investigation, bank notes were fluttering out of the bag as he went. Cops stoppedKaili’s father inside the hotel, seized the suitcase and detained him. Then it was Kaili’s turn. In the early afternoon, police detained her and took her to the Prison de Saint-Gilles.
The next day, the European Public Prosecutor’s Office (EPPO) announced it was investigating Kaili and another Greek member of Parliament in a probe looking at whether she took kickbacks from her assistant’s salaries as well as cuts of their reimbursements for “fake” work trips. Kaili has challenged the lifting of her immunity in this case at the European Court of Justice.
As the one-year anniversary of her spectacular downfall has approached, Kaili and her lawyers have done their best to turn the tables on the prosecutors, casting doubt on the evidence gathered against her and the way the investigation was carried out. Since her arrest, and through a four-month incarceration, Kaili has never wavered from her story. Her advocacy for Qatar, she has argued, was just part of her job as a European politician trying to foster ties with a petroleum-rich country in a region of critical importance to the EU.
Kaili’s lawyers have argued that the testimony provided by Panzeri, who has struck a deal with investigators and confessed in detail, cannot be trusted. Giorgi’s lawyer, Pierre Monville, has maintained his client’s statements were made under duress. “Whatever Giorgi has declared or written during his detention was under extreme pressure and preoccupation regarding the fact that his daughter was left without her parents,” he said.
Kaili’s lawyers have also noted that police kept Panzeri and Giorgi in the same cell in the days after their detention, giving them a chance to coordinate their stories. Kaili’s lawyers argue she was subjected to illegal surveillance, arbitrary detention and what amounts to “torture” while in jail.
The Qatargate suspects won a major victory last summer when the lead investigator, Michel Claise, stepped down over conflict-of-interest concerns after it was revealed that his son was in business with the son of an MEP who was close to Panzeri but hasn’t been arrested or charged.
Then, in September, Kaili played the ace up her sleeve, throwing the entire investigation in doubt with a legal challenge arguing that the evidence against her should be ruled inadmissible because it was gathered before the European Parliament voted to lift the immunity she enjoyed as a lawmaker.
The Qatargate suspects won a major victory last summer when the lead investigator, Michel Claise, stepped down over conflict-of-interest concerns | BELPRESS
Prosecutors retort that such a step wasn’t needed because Kaili had been caught red-handed by her decision to send her father out with a suitcase full of cash, but the case has been delayed pending a decision on her challenge by an appeals court expected in the middle of next year.
“We’re exploring uncharted legal territory here,” said a person familiar with the case, who requested anonymity as they were not allowed to speak on the record. In the meantime, Kaili is back in Parliament, giving interviews to international media and losing few opportunities to make the case for her innocence to her fellow lawmakers.
Giorgi and Kaili are, by all accounts, living together again. One of her lawyers says they’ve been given dispensation to do so, despite the fact that they are suspects in the same case.
Kaili and Giorgi declined to comment for this article, but they clearly haven’t given up the fight. Giorgi’s WhatsApp status is “FORTITUDINE VINCIMUS” — through endurance, we conquer.
Kaili’s profile pic on the app features the famous quote often wrongly attributed to Mahatma Gandhi:
“First they ignore you.
Then they laugh at you.
Then they fight you.
Then you win.”
Nicholas Vinocur, Elisa Braun, Eddy Wax and Gian Volpicelli
Roche Holding said its investigational treatment, inavolisib, showed promise in a late-stage study to treat patients with breast cancer.
The Swiss pharmaceutical company said Tuesday that the phase 3 study met its primary endpoint of progression-free survival, showing that inavolisib, in combination with palbociclib and fulvestrant, delivered a statistically significant and clinically meaningful improvement compared to palbociclib and fulvestrant alone.
While Roche acknowledged that overall survival data were immature at this stage, it said it had observed a clear positive trend. The inavolisib combination was well tolerated.
The group said inavolisib is an investigational, oral targeted treatment with potential to provide durable disease control.
Ukraine’s security service blew up a railway connection linking Russia to China, in a clandestine strike carried out deep into enemy territory, with pro-Kremlin media reporting that investigators have opened a criminal case into a “terrorist attack.”
The SBU set off several explosions inside the Severomuysky tunnel of the Baikal-Amur highway in Buryatia, located some 6,000 kilometers east of Ukraine, a senior Ukrainian official with direct knowledge of the operation told POLITICO.
“This is the only serious railway connection between the Russian Federation and China. And currently, this route, which Russia uses, including for military supplies, is paralyzed,” the official said.
Four explosive devices went off while a cargo train was moving inside the tunnel. “Now the (Russian) Federal Security Service is working on the spot, the railway workers are unsuccessfully trying to minimize the consequences of the SBU special operation,” the Ukrainian official added.
Ukraine’s security service has not publicly confirmed the attack. Russia has also so far not confirmed the sabotage.
“On the Itikit — Okusykan stretch in Buryatia, while driving through the tunnel, the locomotive crew of the cargo train noticed smoke from one of the diesel fuel tanks. The train was stopped, and two fire extinguishing trains were sent from nearby towns to help. The movement of trains was not interrupted, it was organized along a bypass section with a slight increase in travel time,” Russia’s state railroad company RZHD said in a statement on Thursday.
This story has been updated with additional reporting.
The French president and Germany’s foreign affairs minister condemned Saturday’s knife attack in Paris that injured two and left a German national dead. Anti-terrorism prosecutors have opened an investigation into the assault.
Police arrested a 26-year-old Frenchman, who had been on the security services watchlist, soon after the attack Saturday night near the Eiffel Tower. Officials said the victim was with his wife when he was attacked and fatally stabbed on Quai de Grenelle.
“I send all my condolences to the family and loved ones of the German national who died this evening during the terrorist attack in Paris,” French President Emmanuel Macron said on X. “The national anti-terrorism prosecutor’s office … will be responsible for shedding light on this matter so that justice can be done in the name of the French people,” he said.
Emergency services treated the two injured, a French national and a foreign tourist, whose wounds are not life-threatening.
Following his arrest, the assailant told police he was distressed over how “many Muslims are dying in Afghanistan and in Palestine,” France’s interior minister, Gérald Darmanin, told reporters late Saturday. The suspect had served four years in jail for planning another attack in 2016.
“Shocking news from Paris,” German Foreign Minister Annalena Baerbock posted online. “My thoughts are with the friends and family of the young German who was killed in the suspected Islamist attack. Almost his entire life lay ahead of him,” she said. “Hate and terror have no place in Europe,” Baerbock said.
The two people injured in the incident were a Frenchman aged around 60 and a British tourist, the BBC reported. Neither was found to be in a life-threatening condition, it said.
Saturday’s incident comes less than two months after a similar incident in the northern French city of Arras. A teacher was slain and two people woundedin a knife attack at a school in Arras in mid-October.
Broadcom Chief Executive Hock Tan shelled out $40,000 to sit at Xi Jinping’s table for the Chinese leader’s recent dinner in San Francisco with the heads of American businesses. Tan had a lot more at stake—a $69 billion deal he was waiting on China to approve.
For months, Chinese regulators wouldn’t clear the U.S. chipmaker’s bid to buy enterprise software developer VMware, leading Broadcom to put off its date for completion of the deal—first announced in May 2022—three times. Beijing had held up previous mergers involving U.S. companies. Intel’s planned acquisition of Israeli firm Tower Semiconductor, for more than $5 billion, was scuttled in August after Chinese regulators failed to approve it.
