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BERN — Britain and Switzerland unveiled a post-Brexit financial services agreement on Thursday, aimed at making it easier for corporate and wealthy people in both countries to do business together.

The deal, formally known as the Berne Financial Services Agreement, will see the two countries mutually recognise each other's domestic laws and regulations on financial services.

That will enable "frictionless, cross-border provision of financial services" between the two countries in areas such as asset management, banking and investment services, the UK's finance ministry said.

"The Berne Financial Services Agreement is a global first and builds on the UK and Switzerland's strengths as two of the world's largest financial centres," Britain's Finance Minister Jeremy Hunt said.

"It cements open access for financial services between our two nations for decades to come, helping us grow the economy and serving as a blueprint for future agreements with other key trading partners." 

Hunt travelled to Switzerland on Thursday to ink the new deal alongside his Swiss counterpart Karin Keller-Sutter. 

The UK government has been eager to strike post-Brexit trade pacts around the world, as it tries to highlight tangible benefits from its contentious departure from the EU in 2020.

It has struck numerous bilateral deals, particularly with faster-growing economies in Asia, and joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

But potentially lucrative pacts with India and the United States remain elusive.

The Bern deal will in certain sectors allow a UK-based firm to serve clients in Switzerland while largely following UK rules, and vice versa, according to the UK finance ministry.

It also secures "unique access" for British insurance brokers to the Swiss market, it noted. 

Britain will be the only country in the world exempt from new rules in 2024 requiring non-Swiss firms to establish a base in the country before serving Swiss clients, the ministry said.

That will put UK brokerage firms "at a significant advantage to international competitors as they can continue to do business as they always have done". 

"The Berne Financial Services Agreement is only possible due to new freedoms granted to the UK following its exit from the European Union," the ministry said.

"The agreement will enhance the UK and Switzerland's already thriving financial services relationship," it added, noting their trading in financial and insurance services grew by 53 per cent to reach £3.28 billion in 2022. 

PARIS — A top EU court annulled on Wednesday a pandemic state aid programme for Air France-KLM that had been challenged by Irish rival Ryanair and Malta Air.

The General Court ruled that the European Commission "erred" in approving the French government's financial aid for Air France-KLM.

The group received billions of euros (dollars) from the state after the pandemic grounded the aviation sector in 2020 — money that has since been reimbursed, with interest.

The court noted that Ryanair and Malta Air had argued that the measures were "contrary to EU law".

The two airlines said the commission had "incorrectly defined the beneficiaries" by deciding that neither the group's holding company nor Dutch airline KLM were recipients of that aid.

Air France-KLM said it took note of the ruling.

"Air France-KLM and Air France will carefully study these judgements and assess their implications," the group said in a statement.

"They will consider whether to lodge an appeal on points of law before the Court of Justice of the European Union," the statement said.

The General Court previously sided with Ryanair in May in a case against massive government bailouts for German airline Lufthansa and Scandinavia's SAS during the pandemic.

TOKYO — The Bank of Japan (BOJ) on Tuesday maintained its long-standing, ultra-loose monetary policy and offered no guidance on its plans in the new year, sending the yen down against the dollar and boosting stocks.

Speculation had been swirling for weeks that officials would shift away from negative interest rates and tight grip on bond yields as inflation picks up.

That came after governor Kazuo Ueda this month said handling monetary policy would "become even more challenging from the year-end and heading into next year".

While most other major central banks hiked borrowing costs for more than a year in a bid to tame prices, the BoJ has refused to budge as it looked to kickstart the world's number three economy.

After a two-day meeting, the bank said on Tuesday: "With extremely high uncertainties surrounding economies and financial markets at home and abroad, the Bank will patiently continue with monetary easing."

Policymakers have for several months hinted that they are willing to adopt a more normalised policy, such as by making minor tweaks to its yield curve control scheme, which sees the bank control the band within which government bonds are allowed to move.

"We expect...[policy]change is very likely next year," Katsutoshi Inadome, senior strategist at SuMi TRUST, said in a note ahead of the BoJ decision.

"We believe it is likely the BoJ will raise interest rates in 2024" after the central bank gets "a clearer view of forthcoming wage increases" that are regarded as a key factor for achieving its inflation target, he said.

"Looking at the increasing speculation on policy adjustments, January 2024 seems an appropriate time to begin policy modification," he added.

"The bank doesn't want to start hiking at the same time the [United States] begins cutting, so ideally it wants to begin its own policy changes before the US switches its policy."

The Federal Reserve last week voted to hold interest rates at a 22-year high for the third straight meeting but signalled three rate cuts in 2024.

The yen weakened to 143.46 yen after the BoJ announcement, from 142.65 yen in early trade, though the Nikkei 225 index jumped more than 1 per cent in the afternoon.

NAIROBI — Kenya and the European Union on Monday signed a long-negotiated trade agreement to increase the flow of goods between the two markets, as Brussels pursues stronger economic ties with Africa.

The Economic Partnership Agreement will give Kenya duty-free and quota-free access to the EU, its biggest export market, while European goods will receive progressive tariff reductions.

The agreement is the first broad trade deal between the EU and an African nation since 2016 and follows a spending spree by China on lavish infrastructure projects across the continent.

"Although today represents a moment of monumental promise, it is also the beginning of a historic partnership for historic transformation," Kenyan President William Ruto said at a ceremony attended by European Commission chief Ursula von der Leyen in Kenya's capital Nairobi. 

"The core of this arrangement is to put real money into the pockets of ordinary people," said Ruto.

EU chief von der Leyen said the partnership was a "win-win situation on both sides" and called on other East African nations to join the pact, which came after years of negotiations that concluded in June. 

"We are deepening trade ties and building up our economic resilience," she said. 

"We are opening a new chapter in our very strong relationship and now our effort should be focused on implementation," von der Leyen added. 

Both the Kenyan and the European parliaments must ratify the deal before it comes into force. 

The European Union said that the deal was "the most ambitious economic partnership" it had with a developing country.

It includes commitments to sustainable development in areas such as labour rights and environmental protection, the EU said in a statement.

"A dedicated chapter has been included on economic and development cooperation, aimed at enhancing the competitiveness of the Kenyan economy," the EU said. 

EU's trade commissioner Valdis Dombrovskis said the "historic agreement" would unlock new areas for cooperation and benefit. 

The 27-nation bloc accounts for more than 20 per cent of Kenya's overall exports, according to government data, mainly agricultural products, including vegetables, fruits and the country's famous tea and coffee.

Total two-way trade between the markets hit 3.3 billion euros ($3.6 billion) in 2022, up 27 per cent since 2018, according to EU figures.

'Door wide open'

Africa has become a renewed diplomatic battleground since the Ukraine war began, with Kenya and other countries on the continent aggressively courted by Russia and China and the West.

An economic powerhouse of east Africa, Kenya is seen by the international community as a reliable and stable democracy in a turbulent region.

The EU has taken steps to counter China's Belt and Road programme, announcing in February it would increase investments in Kenya by hundreds of millions of dollars through its own Global Gateway initiative.

Kenya's biggest infrastructure project, a $5 billion railway line connecting Nairobi to the port city of Mombasa, which opened in 2017, was built by a Chinese company with Chinese financing.

Kenya is also negotiating a trade deal with the United States. 

The new trade deal with Europe is the culmination of trade talks between the EU and the regional East African Community (EAC) that started roughly a decade ago.

Kenya signed and ratified an initial trade agreement with the EU in 2016 alongside the EAC but it fell through after some countries failed to greenlight the pact, with Kenya eventually pursuing its own deal.

"This agreement leaves the door wide open for our EAC partners to join so that together as a region we can benefit," Ruto said.

BASRA — In Iraq's southern city of Basra, Al Harith Hassan has been struggling to withdraw his salary in dollars for months as the government tries to curb the country's addiction to US currency.

"When we go to withdraw our salary, they only give us a fraction of it, in instalments," said Hassan, who is paid in dollars for his oil field logistics job.

Oil-rich Iraq is hardly short of dollars — it has foreign currency reserves of more than $100 billion (93 billion euros).

But in its fight against a booming currency black market, Baghdad has imposed ever-tighter restrictions on the use of American bucks.

For people like Hassan, this can mean a severe cut in his earnings. 

He used to withdraw his money and change it at semi-tolerated exchange shops for rates up to 1,600 dinars per dollar. 

But increasingly, he says he can only withdraw his cash in dinars at the official rate of 1,320 dinars per dollar. The banks and central bank have traded blame for who is imposing the new restrictions. 

"This is a problem. It means that our salary is losing 20 per cent of its value," said Hassan. 

More restrictions are coming as the government tries to stop dollars dominating the economy.

From January, Iraq's central bank will require every commercial transaction to be made in dinars. Existing US currency deposits will still be accessible in dollars, but new money wired from abroad will only be available in dinars, at the official rate. 

'Illicit trade' 

One of the main factors feeding the demand for foreign currencies in Iraq is "the smuggling of US dollars to countries and entities facing US sanctions, including Iran and Syria", said Hayder Al Shakeri, a researcher at the Chatham House think tank.

Shakeri also noted the "illicit trade" of certain highly taxed goods, such as cigarettes.

Prime Minister Mohamed Shia Al Sudani acknowledged in September that sanctions preventing dollar transfers to Iranian banks had driven Iraqi traders to the black market.

Iraq and Iran's central banks were working on a mechanism to regulate such trading, he said.

In late November, the government announced steps to encourage importers of goods like cigarettes, cars, gold and mobile phones to use official channels to obtain dollars.

And, at least officially, the Hawala over-the-counter money transfer system, no longer transfers money in dollars.

'Monetary sovereignty' 

A year ago, Iraq adopted the international electronic transfer system known as SWIFT in order to monitor dollar usage, help tackle money laundering and ensure the respect of international sanctions.

In February, the prime minister said the new regulations had cut foreign currency trades from around $200-300 million per day to $30-50 million.

"We are consolidating our monetary sovereignty," Mudher Salih, financial policy adviser to the prime minister said.

"We cannot accept dealing with two currencies within the national economy", he told AFP.

Seeking to stave off inflation, the government allows importers to obtain dollars at the official rate in key sectors like food, medicine, and construction.

And it is encouraging banks and importers to favour alternative currencies like the euro, Emirati dirham, and Chinese yuan, to reduce dollar demand.

For now, the gap between the official and unofficial dollar rates is still causing headaches for authorities. 

Police recently caught several people at Baghdad airport as they were planning to travel with dozens of debit cards and use them abroad to withdraw thousands of dollars at the official rate, which they could sell for a profit on the Iraqi parallel market.

ISTANBUL — Turkish Airlines said last week it has decided to purchase more than 200 Airbus aircraft — with the option for over 100 more — in the coming decade as it seeks to become the world's largest carrier.

Turkish Airlines Chief Executive Bilal Eksi said in a social media statement that the entire order could potentially add up to 355 aircraft.

The deal would be one of the industry's largest and substantially expand the Turkish flag carrier's existing fleet of 439 jets.

"I wish good luck to our country and our company," Eksi said in a social media statement.

Turkish Airline said in a separate corporate filing that the purchases would made as part of its "strategic plan" for 2023-2033.

But the airline and Airbus differed slightly about the details of the deal.

The Turkish Airlines statement said it had made firm orders for 230 jets and placed purchasing rights for an additional 125 aircraft.

Airbus said in its own statement that Turkish Airlines had agreed to order 220 jets.

There was no immediate explanation for the discrepancy in numbers.

The airline's confirmed order purchase — which includes 150 A321 NEO and 60 widebody A350-900 jets — has a catalogue price of more that $40 billion.

Few deals cost their actual sticker price because plane makers make discounts for bulk orders.

The Turkish carrier's existing fleet is split evenly between Airbus and Boeing aircraft.

The new order delivers a massive boost to the European aerospace giant in its race for global supremacy with its US rival.

"This order for the latest generation aircraft is a demonstration of the bold vision by Turkish Airlines," Airbus executive Christian Scherer said in a statement.

"We are proud to accompany Turkey's connection to the world with our state-of-the-art aircraft."

Turkish Airlines is based in Istanbul's newly-built international airport and flies to 120 countries.

The company claims to own "the title of the airline that flies to most countries in the world".

FRANKFURT — Two leading economic institutes cut their growth forecasts for Germany for next year, saying continued uncertainty and a budget crisis will weigh on Europe's beleaguered top economy.

The Ifo institute slashed its 2024 projection to 0.9 per cent, from 1.4 per cent previously. The DIW institute reduced its forecast to 0.6 per cent from 1.3 per cent. 

The export-oriented German economy is struggling through a lacklustre phase and is expected to shrink this year due to high inflation, an industrial slowdown and weakness in key trading partners. 

Ifo warned of continued weakness in the final stage of 2023, which would impact 2024.

"Uncertainty is currently delaying the recovery, as it increases consumers' propensity to save and makes companies and private households less willing to invest," said Timo Wollmershaeuser, the group's head of forecasts. 

A budget crisis sparked by a top court ruling last month that the government had broken constitutional rules on limiting debt will also weigh on the economy next year, the institutes warned. 

The ruling threw the government's 2024 budget into disarray, but Chancellor Olaf Scholz's ruling coalition finally clinched a deal on the spending plans on Wednesday. 

Still, DIW warned that planned savings in the budget "still need to be finalised and approved", leading to "further uncertainties".

Despite the gloomier forecasts, Ifo's Wollmershaeuser stressed that the "course is set for recovery". 

"Wages are rising sharply, employment is higher than ever before, purchasing power is thus returning, and overall economic demand should pick up again." 

He noted that price rises have eased following the sharp increases in interest rates to combat inflation.

The US Federal Reserve signalled on Wednesday its sees three interest rate cuts next year and the European Central Bank may also provide more information on the outlook for interest rates next year.

In its latest forecast in October, the government predicted the economy would grow 1.3 per cent next year.

NEW YORK — Electric car maker Tesla has initiated a recall of over 2 million vehicles in the United States due to a risk linked to its autopilot software, the US traffic safety regulator said on Wednesday.

"Tesla has now filed a safety recall with the agency related to its Autopilot software system," the National Highway Traffic Safety Administration (NHTSA) said, adding that "affected vehicles will receive an over-the-air software remedy."

The recall covers 2.03 million Tesla vehicles, across all models.

In a statement sent to AFP, the regulator said that Tesla's autopilot system "can provide inadequate driver engagement and usage controls that can lead to foreseeable misuse of the system".

If autopilot is used incorrectly or if the driver fails to recognise that the function is activated, the risk of an accident could be higher, NHTSA said.

Vehicles will receive an over-the-air update. The update will include additional alerts to encourage drivers to keep their hands on the steering wheel.

US-based Tesla has been hit with several lawsuits stemming from car accidents, and its driver-assistance technology has provoked regulatory probes.

In 2021, NHTSA opened an investigation into 11 incidents involving stationary emergency vehicles and Tesla vehicles using the assisted driving feature.