Global Economy News
LAST UPDATE: June 25, 2025
Trump Sparks Fear Over NATO Future With Doubts on Defense Pledge
At the NATO summit in The Hague, President Trump questioned the U.S. commitment to NATO’s Article 5 mutual defense clause, stating it “depends on your definition.” His remarks stirred concern among European allies over American reliability, even as NATO Secretary General Rutte and U.S. officials reaffirmed commitment and emphasized increased defense spending.
Insight
Trump’s conditional stance introduces strategic ambiguity, prompting European members to accelerate defense investment and reassess dependence on U.S. guarantees. This may accelerate a shift toward greater EU autonomy in defense.
NATO’s Rutte says he has no doubt Trump is committed to mutual defence pact
As Trump arrived for the summit, NATO Secretary-General Rutte said he has “no doubt” the U.S. remains fully committed to NATO and Article 5, countering Trump’s previous ambiguity about definitions.
Insight
Rutte’s assurance is a diplomatic measure to stabilize the alliance amidst uncertainty. It reflects efforts to reaffirm U.S. reliability publicly, despite underlying strategic tension.
Stablecoins ‘perform poorly’ as money, central banks warn
The Bank for International Settlements (BIS), in its 2025 annual report, sharply criticized stablecoins—like Tether and USDC—for failing the key criteria for sound money: singleness, elasticity, and integrity. The BIS flagged their susceptibility to rapid redemptions, lack of central bank backing, and facilitation of illicit activity. With about $250 billion in circulation, stablecoins pose risks to monetary sovereignty, financial stability, and cross-border capital flows. BIS instead advocated for tokenized central bank-backed deposits via initiatives such as Project Agorá (ft.com).
Insight
The BIS warning underscores a growing global consensus that privately issued stablecoins are inadequate as money. Regulators are accelerating efforts toward central bank digital currencies (CBDCs) and standardized frameworks to ensure financial stability and control.
Klaus Schwab, WEF Board Try to End Spat to Sort Out Succession
WEF founder Klaus Schwab and the board are in talks to resolve their personnel and governance dispute. Schwab stepped down in April amid allegations of financial misconduct, with both parties announcing an external investigation expected by end-August 2025 (bloomberg.com).
Insight
This effort signals an urgent push for stability and clarity in leadership. Finalizing the probe is crucial to restoring credibility and enabling a coherent succession plan, possibly including Christine Lagarde, without further internal division.
Britain, Kenya, Singapore lead campaign to boost company demand for climate credits
A coalition led by UK, Kenya, Singapore (plus France, Panama) is promoting clearer guidelines for corporate carbon credit purchases, targeting increased usage ahead of COP30 .
Insight
This marks a significant policy push to rebuild trust in voluntary carbon markets. By standardizing principles, the initiative aims to unlock capital flows toward climate-vulnerable nations, making climate finance more effective.
