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The heady days of breathless enthusiasm about the “Brics”, the world’s major emerging economies, seem like a distant memory — at least where Brazil is concerned. An increasingly confident and assertive China is, of course, another matter.

Martin Wolf argues in his column that Brazil teeters on the edge of “economic, political and moral crisis”. A series of political scandals that have engulfed a third of the members of the current cabinet, as well as the president and leaders of the other main political parties, form the backdrop to a worryingly anaemic economic performance.

The bald numbers tell an alarming story: income inequality in Brazil remains among the highest in the world; growth is sluggish, lagging behind less vaunted economies in the region such as Argentina, Mexico, Colombia and Chile; and total factor productivity — a measure of the rate of innovation — has been falling since the turn of the century.

But, as the saying goes, you should never let a crisis go to waste. Brazil, Martin insists, should seize the opportunity to enact lasting change. This is easier said than done, however. The reforms required are political as well as fiscal (although the weight of the structural deficit shouldn’t be downplayed) — and it’s not clear that either of the politicians currently leading the polls — former president Luiz Inácio Lula da Silva and rightwing populist Jair Bolsonaro — is capable of delivering them. “Where, one wonders, is Brazil’s Emmanuel Macron?”

Energy costs of the bitcoin bubble: As the price of bitcoin rises above $7,000 and a major derivatives exchange plans to launch bitcoin futures, Izabella Kaminska examines the environmental costs of using the cryptocurrency. As bitcoin mutates from a medium of exchange into a price-defying asset class, the more expensive and energy-intensive it becomes to maintain. Is it worth the candle?

Britain’s post-Brexit bind on trade: Alan Beattie runs the rule over a new report from the Legatum Institute, the government’s favourite think-tank, on Britain’s “pathway to prosperity”. The UK may want to remake global trade regulations in its own image, but the reality is that it will likely find itself squeezed between regulatory behemoths on either side of the Atlantic.

High stakes in Saudi Arabia: The reforming ambitions of Mohammed bin Salman, heir to the Saudi throne, are vast, writes Roula Khalaf. But it’s hard to see how the young pretender will be able to achieve his domestic goals at the same time as running a more aggressive foreign policy.

Best of the rest

Never mind fake news, this is fake government — Alex Massie in the Spectator despairs of the chaos in Theresa May’s cabinet

The Paradise Papers Hacking and the Consequences of Privacy — Jake Bernstein in the New York Times says the revelations about the murky world of offshore finance draw attention to the fuzzy boundary between privacy and secrecy

Brown’s greatest hits are eclipsed by his endless grudge against Blair — Polly Toynbee in the Guardian argues that Gordon Brown’s new memoir shows the best and worst of the man who claimed to have saved the world at the height of the global financial crisis

Don’t let the flame of Kurdistan go out — writing in Le Monde, Anne Hidalgo, Bernard-Henri Levy and others denounce the indifference of the west to the predicament of the Kurds

Brits don’t appreciate being damned by a Yankee — Alice Thomson in the Times takes issue with a recent op-ed in the New York Times describing Britain as a country in the throes of a “controlled suicide”

What you’ve been saying

Membership of the EEA is clearly the inferior option — letter from Hugo Dixon in London

“It might still be sensible to take Mr Münchau’s advice if the chance of staying in the EEA was much greater than staying in the EU. But it’s not. Both would require a massive change in government policy, triggered by a change in public opinion. If the voters do change their mind, and there are some signs that they are starting to, much better to go the whole hog and reverse Brexit.”

Comment from Scouse 1 on Janan Ganesh’s article, Britain is overexposed to its ruling class

“In 1485 upstarts seized control from a despot and the remnants of the Normans. They immediately imitated the former rulers, their caste succumbed too the upstarts of Cromwell and his gang. Later we saw a nascent English elite take control of the German George. Thus we saw a return to imitation of the Normans. We saw the rise of the Heath-Thatcher middle class ‘elite’. We have now we have seen the Blair-Mandelson-Prescott elite change to Boris-Diane Abbott upstarts. All imitating the former Establishment. God help the United Kingdom in the years post 2020.”

A way to solve the Catalan crisis and strengthen the EU at the same time — letter from Prof Wolfgang Danspeckgruber in New Jersey

“Most importantly, Spain has to begin a meaningful dialogue initiative on all levels of society, taking care to include the next generation, opinion leaders, business and finance, academia, the church and the crown. Only by erasing misconceptions, misunderstandings and ignorance on all sides will it be possible to seriously address the grievances at hand and to turn the current negative dynamics into a positive and forward-looking development for all Spaniards, the region and the EU.”

Today’s opinion

Why Brazil’s crisis creates an opportunity
The country needs a programme of comprehensive economic and fiscal reform

Saudi crown prince’s purge extends into Lebanon
MbS’s intervention could pave the way to war against Hizbollah

Free Lunch: Why the Paradise Papers matter
Offshore finance makes it easier to hide wealth in plain sight

Instant Insight: Italy’s centre right draws hope from elections in Sicily
But a rightwing alliance would need a coalition for national rule, writes Tony Barber

Britain’s post-Brexit bind on trade
The UK is likely to find itself squeezed by both the EU and US on regulation

FT Alphaville: Greece’s membership of the euro is still tenuous

Instant Insight: Rupert Murdoch entertains a retreat to the news business
Selling film and TV assets of 21st Century Fox could disrupt family succession, writes John Gapper

Saudi Arabia’s crown prince plays for high stakes
The reform ambitions are so vast that they are colliding with each other

The environmental costs of bitcoin are not worth the candle
To make the cryptocurrency more sustainable, vested interests would have to be confronted

FT View

FT View: Brexit Britain’s slapdash approach to foreign policy
Theresa May is struggling to bring her undisciplined cabinet into line

FT View: Why debt and equity should be taxed the same way
The Republican tax plan takes a tentative step — more is needed

The Big Read

The Big Read: Sri Lanka counts high cost of war and peace
President Sirisena is accused of backsliding on pledge to heal country’s damaged reputation

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