In Brief – N.15 – June 14, 2015

US consumers held back from spending more in April 2015, instead channeling income gains into savings. Consumer spending was flat in April 2015 – the weakest performance in three months, the Commerce Department reported.

European Commission President Jean-Claude Juncker claimed Brexitnot desired by British” and Prime Minister David Cameron is using referendum to tie Britain to Europe permanently.

“We have a common vision on how to deal with the situation in Yemen,” said Egyptian Foreign Minister Sameh Shoukri at a joint press conference with his visiting Saudi counterpart Adel al-Jubeir.

Tensions are growing in Macedonia (FYROM). The small Balkan country of Macedonia is turning into another unexpected stage for tension between Moscow and the West.

Global growth will gradually strengthen towards its pre-crisis trend rate by late 2016 as activity becomes more evenly shared across the major economies and overall external imbalances are less marked than in the run-up to 2007, according to the OECD’s latest Economic Outlook.

Harvard Business School (HBS) alumnus, businessman, and philanthropist John A. Paulson, MBA 80, made a gift of $400 million to support research, teaching, financial aid, and faculty development for Harvard’s School of Engineering and Applied Sciences (SEAS).

According to the Wall Street Journal (WSJ), six steelmakers with major US operations filed a trade complaint seeking punitive tariffs for alleged unfair pricing of imported steel from China, India, Italy, South Korea and Taiwan.

The limited data in hand pertaining to the Q2 2015 do not suggest a significant bounceback in aggregate spending, which we would expect if all of the weakness in the Q1 2015 were due to transitory factors,” warned US Federal Reserve (Fed) Governor Lael Brainard.

“We still have very weak investment, investment is very tepid,” Reserve Bank of India’s Governor Raghuram Rajan said after announcing an interest rates cut of a quarter percentage point, now at 7.25 percent. “We have not seen a strong pick up (…) we feel the economy is still below potential,” Rajan added.

Greek Prime Minister Alexis Tsipras saw a deal ahead, but differences remained after EU talks. There was some hope however, since German Chancellor Angela Merkel stepped in to speed Greek deal, along with simultaneous efforts to prevent UK’s Brexit.

“In weighing (the risk of significant market volatility), we think that there is a case for waiting to raise rates until there are more tangible signs of wage or price inflation than are currently evident. So, in other words, we believe that a rate hike would be better off in early 2016,” said IMF chief Christine Lagarde.

“The ramifications are very serious,” Susan Collins, R-Maine, a member of the US Senate Intelligence Committee, told NBC News. “Potentially 4 million former and current federal employees have had their information compromised, and because OPM is the agency that holds security clearances, that’s giving a potential enemy like China very valuable information,” she said after another massive data breach.

The Colombian government and FARC guerrillas say they plan to form a truth commission to investigate atrocities committed during the country’s five-decade civil war. The agreement comes despite heightened tensions, explained Deutsche Welle.

Turkish President Tayyip Erdogan’s hopes of assuming greater powers suffered a major setback on Sunday when the ruling AKP he founded failed to win an outright majority in a parliamentary election for the first time.

“If anyone wants to start a discussion about changing the sanctions regime, it could only be about strengthening it,” said European Council President Donald Tusk, thus stressing there is a consensus between G7 countries to maintain strong sanctions against Russia.

Japan’s economy expanded more than initially expected in January-March 2015 on solid growth in capital expenditure, underscoring the central bank’s view that a recovery from last year’s recession is gaining momentum.

Cuba and the Paris Club of wealthy creditor nations have agreed that Cuba owes $15 billion stemming from a 1986 default, an important first step toward renegotiating the debt.

Israeli and Palestinian economies would gain $120 billion and $50 billion respectively over the next decade in a two-state solution that would solve the conflict and normalize bilateral relations, read a RAND Corporation report.

“We have to deliver prosperity to the people of the continent, (…) we cannot wait for another two decades” to emerge out of poverty, said Deputy Chairperson of the African Union (AU) Commission Erastus Mwencha  as the 25th Summit of the AU started.

“We are not operating on an assumption that Iran will act in good faith. (The deal with Iran) will only be finalized if the connective tissue of the agreement meets a tough standard of intense verification and scrutiny,” said US Treasury Secretary Jacob J. Lew at the 4th Annual Jerusalem Post Conference.

Total infrastructure investments in 139 emerging economies – for projects with private participation in the energy, transport and water sectors – rose to $107.5 billion in 2014, driven largely by increasing activity in Brazil, according to the World Bank.

President Recep Tayyip Erdogan election setback left Turkey‘s politics uncertain and new elections may loom as no clear winner emerged from June 7, 2015 vote. Although difficult, this is however a promising new dawn for Turkey.

The United States has overtaken Saudi Arabia as the world’s biggest oil producer in 2014 while India has recorded the highest growth in energy consumption among major economies, according to BP Plc’s Statistical Review of World Energy.

Developing countries are likely to be squeezed by higher borrowing costs and a new era of lower commodity prices in 2015. The World Bank Group has again revised down its growth forecast for the world economy to 2.8% this year, while developing countries are now projected to grow by 4.4%.

How is society going to cope with structural unemployment and the envy, hatred and the social warfare? We are destroying the middle classes at this stage and it will affect us. It’s unfair. So that’s what keeps me awake at night,” asked 65-year-old Johann Rupert, the Founder and Chairman of Richemont.