Monday, 6 April 2009

PM's Just Saved Apocalypse for Later

HALLELUJAH! Gordon’s saved the world. But what about Britain?
To be fair, the Prime Minister pulled off a brilliant propaganda coup — and delivered real help for stricken economies around the world.

The good news is that bankrupt countries in Eastern Europe will not go bust or — more importantly — drag everyone else down with them.

That’s because the International Monetary Fund — the world’s pawn shop — can now print its own money and bail out basket-case economies such as Hungary.

“So, no Apocalypse Now,” says my City analyst.

The bad news is that Britain looks like becoming one of those basket cases.

Taking a begging bowl to the IMF would be a grotesque humiliation for a nation so recently rated as the world’s fourth-largest economy.

Yet in perhaps his most outrageous spin operation ever, Prince of Darkness Peter Mandelson is already smoothing the path.

Britain is not “head of the queue” for IMF money, he told C4 News. But there would be “no stigma” for Britain if we were.

An unnamed minister, who must surely be Mandy, later told a newspaper: “Previously, a country would only go to the IMF if they were in a very bad state. It was a bit like going to Accident and Emergency to get urgent help. This new facility is like getting wellbeing care or going to a spa to recuperate.”

Before you swallow that nonsense, listen to Simon Johnson, the IMF’s former chief economist.

“With all due respect to Gordon Brown and his ministers, they need some help right now,” he told the same C4 programme.

“Your economy — the UK economy — is in big trouble.”

Who do you believe?

I don’t want to rain on Gordon Brown’s parade, but I lean towards Mr Johnson — things are going to get much worse before they get any better.

My “Apocalypse Deferred” City source sees big trouble ahead. Any “green shoots” risk turning sickly yellow under the pall of national debt.

“The IMF is right,” he says. “The UK economy is in trouble and to suggest America is to blame is just daft.

“We are borrowing massively, printing money. We have a higher household debt ratio than America and rely more than anyone else on financial services, which are in trouble.

“As a result, Sterling is a risky currency.

“Big investors looking for safe havens for their clients’ billions are worried about the Pound. If they switch to another currency, Britain is in trouble.

“There is a 25-per-cent chance of a run on the Pound in the next six months. That’s a shockingly high probability.”

Some optimists say America will start recovering next year — but not debt-laden Britain.

After his G20 triumph, the Prime Minister will be pleased by a three-per-cent bounce in share prices — and in Labour’s poll ratings.

He will also welcome dodgy claims that house prices are rising again. All three are likely to be “blips”.

Indeed, the Halifax have already trashed the evidence of a housing revival, with figures showing a 1.9 per cent FALL in prices last month.

In a remarkable outburst of candour, Chancellor Alistair Darling blames predecessor Gordon Brown for castrating the watchdogs who might have saved our banks.

Now, on the eve of this month’s crucial Budget, he warns we are nowhere near recovery.

“It’s worse than we thought,” he says.

Mr Darling says the economy will shrink in its worst performance since World War II. Unemployment will keep soaring — perhaps even doubling to 4million.

Asked if there was any reason for cheer, the Chancellor confessed: “There is some way to go yet.

“We have to be realistic. You cannot — you must not — build up false hope.”

This bleak scenario is a million miles from the PM’s beaming optimism.

As the G20 packed up, he claimed a “new world order”, backed by a mythical trillion dollars in spending money. Don’t believe it. As Chancellor, Gordon Brown was famous for his thimble-and-pea tricks.

As in so many of his smoke-and-mirror budgets, these numbers simply don’t add up.

FRANCE and Germany were pleased with their G20 pincer attack on the “Anglo-Saxon economies” – Britain and America.

Pint-sized egotist Nicolas Sarkozy resents popular Barack Obama almost as much as he does First Lady Michelle for eclipsing his wife Carla Bruni.

America will ignore him. But he and Germany’s Angela Merkel have forced concessions out of Britain on the way we do business.

In return for his “triumph” last week, just how many economic levers has Mr Brown surrendered to Brussels?


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