Bloomberg Businessweek-Europe Edition June 17, 2019

● United Technologies and Raytheon plan to join forces, creating an aviation and defense giant with about $70b in sales. Their range of products will include jet engines, missiles, cockpit electronics, and cybersecurity services. ● President Trump threatened China with tariffs on an additional $300 billion in imports. Trump hopes to pressure Chinese President Xi Jinping to meet with him at the G-20 gathering in Japan later this month. This latest trade salvo came just days after the U.S. called off proposed levies on Mexican imports. ● Protesters in Hong Kong braved tear gas and rubber bullets on June 12 in the standoff over a bill that would allow extraditions to mainland China. ● The list of candidates hoping to succeed Theresa May as Conservative Party leader and U.K. prime minister swelled to 10…

▶ Boeing Has Its Work Cut Out in Paris The Paris Air Show starts on June 17. Typically an event for major aircraft orders, this year’s show is overshadowed by the grounding of the Boeing 737 Max following two deadly crashes. Can the U.S. company rebuild trust at the expo, or will archrival Airbus dominate? ▶ The Federal Reserve discloses its rate decision on June 19. A cut in the near future is looking more likely amid trade tensions and a slowdown in U.S. hiring. ▶ The Bank of Japan announces its rate move on June 20. Some economists predict the nation’s economy will shrink in the second quarter. ▶ The European Council meets for its quarterly two-day summit on June 20, the first gathering since parliamentary elections were held last month. ▶ The…

Hope for democracy in Sudan hangs by a thread. On June 3, the generals running what’s meant to be an interim administration unleashed paramilitary forces on a peaceful sit-in in Khartoum, killing at least 60 people. Crackdowns in other parts of the country increased the toll. The generals announced they were scrapping agreements for a transition to democracy that had been negotiated with the protesters who brought down dictator Omar al-Bashir in April. Instead, the Transitional Military Council has said it plans to hold elections within nine months. The brutal attack shows that the generals can’t be trusted to oversee this process. The world has seen this movie before. The killings in Khartoum may not have matched the scale of the 2013 massacre of protesters in Cairo, which likely claimed more than…

The top-secret plan had been filed away in 2012, the previous time Greece had teetered on the edge of default. It was codenamed “Croatia’s Accession to the European Union” to disguise that it was a doomsday scenario for the country farther south. Any hint it even existed would have sent Greece deeper into crisis, spooked financial markets, and shaken confidence in the euro itself. Then in early June 2015 a fresh round of default negotiations seemed to be at an impasse. Not till negotiations ended on July 13, 2015, did the EU and Greece agree to a third bailout. In the meantime, the EU’s preparations for catastrophe continued, as detailed in this excerpt adapted from Viktoria Dendrinou and Eleni Varvitsioti’s book, The Last Bluff. A small team of 10 EU economists…

A few days after the death of Chanel designer Karl Lagerfeld in February, Giorgio Armani summoned guests to his personal museum in Milan for his fall-winter collection runway show. At the former granary wrapped in stark concrete walls, he revealed the latest lineup of his softly tailored jackets, velvet bombers, and evening gowns to the friendly nods of magazine editors, department-store buyers, and celebrity clients such as Naomi Watts. At the finale, instead of his habitual quick bow and wave, Armani took the hand of a model and paraded the length of the catwalk. The crowd cheered in amazement. Perhaps a touch of sentiment in the wake of Lagerfeld’s passing contributed to the applause. Nevertheless, it was a thunderous exclamation that the 84-year-old Armani—the creative director, chief executive officer, and…

As Air Berlin slid into insolvency two years ago, Carsten Spohr spotted an opportunity to strengthen his response to low-cost carriers Ryanair, EasyJet, and Wizz. The chief executive officer of Deutsche Lufthansa AG had been seeking to make Eurowings, his budget unit, more competitive by marrying bargain-bin fares with Lufthansa’s top-shelf brand name. Spohr snapped up Air Berlin planes, employees, and landing slots, but since then Eurowings has racked up almost €500 million ($570 million) in losses. This spring, Spohr halted expansion of Eurowings after soaring fuel prices and too many empty seats squeezed profits, helping drive Lufthansa’s stock down 10% this year. In the company’s annual report, he said integrating Air Berlin had made for an “extremely difficult” year. “We did not always live up to our premium promise…