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Rising distrust within the EU will exact a steep economic price, warns Martin Sandbu. He argues that relations are fraying within the bloc and cites allegations of money laundering in Latvia and Estonia, claims that Malta is selling citizenship too freely, and the recent case of a Ukranian activist who was deported from Brussels at the request of Poland.

Once people — or countries — stop trusting each other, the need for detailed laws and rules increases, bringing with it friction that boosts the cost of doing business. This could be particularly bad news for EU’s smaller and less developed members, Martin concludes.

Sarah O’Connor argues that not all regions face the same threat from automation. In general, northern Europe, North America and New Zealand are at much less risk than southern and eastern Europe, she says.

Ilaria Maselli, a senior economist at The Conference Board, warns that several leading economic indicators suggest that the risk of a UK recession is growing.

UBS chairman Axel Weber writes that preventive measures alone will not be sufficient to deal with the next financial crisis. It is time for public authorities to shift resources from policy development to supervision, he adds.

Leo Lewis delves into the rarefied world of competitive stone skipping and what that tells us about the nature of sport at a time when the popularity of e-sports is rising fast.

Gideon Rachman explores the logic of trade confrontation as the US and China rachet up their tariffs on each other’s goods.

What you’ve been saying

The crisis in Argentina undermines the IMF’s case: letter from Arturo C Porzecanski, Washington, DC, US

The crisis in Argentina undermines the case for expanded IMF resources. First, the role of the IMF is not to backstop the payment of all debt obligations falling due in any member country, but rather to signal improved economic management in order to catalyse new debt and equity investments. The fund’s commitment to lend Argentina $50bn was therefore an exaggeration. Second, there is ample evidence that fund staff are mere mortals who all too often make mistakes.

In response to “ A nuclear gamble on North Korea’s Chairman Kim”, Paul A. Myers says:

The three variables are: (1) denuclearizing North Korea, (2) lifting sanctions on North Korea, and (3) ultimate withdrawal of US troops from Korean peninsula. One presumes China is most interested in (3). North Korea is interested in (2). South Korea and the US are interested in (1). So therefore using (2) to test (1) without giving way on (3) seems the best path forward for South Korea and the US. Talk engenders more talk, always a good thing in tense situations.

Drive for global banking conformity increases systemic risk: letter from Nicholas Dorn, London, UK:

Despite the FT’s enumeration of risk factors, no one knows where the next crisis is going to come from. The more useful question is how the propagation of crises through the system can be minimised. The plain implication is the need for greater variation in finance, so that such risks as do arise cannot so easily ripple through the global ensemble. What is desperately needed, therefore, is not bland global conformity but more variation between important regulatory regimes (US, China, EU, etc).

Today’s opinion

Stone skimmers and e-gamers spot a chance to flip fun into sport
A shift from the Olympic committee, keen for new audiences, encourages e-sport backers

Reginald Dale, Financial Times reporter, 1940-2018
Journalist made his name covering the UK’s negotiations to join the European Economic Community

Some regions are more vulnerable to automation than others
Local and national policymakers should work harder to connect rural areas to cities

The economic cost of fraying trust in Europe
Mutual suspicion among EU member states threatens to unravel inter-dependence

The risk of a UK recession is growing
Continued uncertainty over the outcome of Brexit negotiations is not helping

Instant Insight: The US, China and the logic of trade confrontation
Beijing will explore new ways to hurt Washington, including a refusal to buy its debt

FT Alphaville: What the bond market might miss about inflation

The Art of Persuasion: Public speaking is no more than a confidence trick
The Queen’s 1947 Cape Town speech may not have been delivered live. Does it matter?

FT View

The FT View: Donald Trump fires another volley in the US-China trade war
Some of Washington’s criticisms of Beijing are reasonable, but its response is not

The FT View: Military action is not the answer to Venezuela’s refugee crisis
There are better options for dealing with spiralling exodus

The Big Read

The Big Read: How the promise of electric power could transform aviation
The industry is on the brink of the biggest revolution since the 1930s

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