Economists have warned that the UK's public finances are in such a bad state there is a real possibility that Britain will seek help from the fund.
The G20 agreed this week to establish a new scheme, controlled by the IMF, which countries of all backgrounds can go to if they are experiencing financial problems.
That coincided with a concerted push by British ministers to argue that there would no longer be any stigma attached to asking for cash.The previous Labour Government's bail-out by the IMF in 1976 was seen as a national humiliation and helped sweep the party from power for 18 years.
A senior Cabinet minister said, however, that the new fund would not be like the 1970s version and should not be seen as such. He said there would be nothing wrong if America or Britain used the facility.He said: "Previously a country would only go 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 will not be like that. It is a bit more like getting wellbeing care or even like going to a spa to recuperate."
Isn't it strange how this Cabinet Minister remains anonymous and refuses to be named. You might almost think he had something to be ashamed of. A key part of the Tory attack on Labour now should be to drive the point home that Labour has plundered our public finances to such a state that we could be driven to seek emergency assistance from the IMF. Recuperation, my arse. More like resuscitation.
22 comments:
If McBroon the waster goes to the IMF it will be once again a national humiliation presided over by a useless Labour government. Why oh why do 23% or thereabouts of the population doggedly support these people. They hate Britain and all it stands for. They are trying to utterly destabilise society and they have once again bankrupted the economy and raised taxes to an all time high. They are an utter disaster for this country. They should be prosecuted and if found guilty of treason and economic sabotage jailed.
Has anyone heard of this initiative?
DIY economic planning. Wiki-style G20 for the people
Anyone who reads Iain's blog involved in it?
Peter Mandelson was on Newsnight on Thursday saying the same thing openly. I think you're right, they are trying to manage expectations about this.
Indeed Iain, as a 41 year-old, it will like being a kid again.
One of my earliest political memories was Denis Healy going cap in hand to the IMF for a bailout like we were some Third |World Country.
Still, the harsh medicine imposed by the IMF led to Thatcherism.
As I have blogged over at The Fairfacts Media Show, America's debt levels at 13% is far higher than the 10% of GDP we will have under Brown.
So maybe the Messiah will be seeking a bailouts for his bankrupting of America.
http://fairfactsmedia.blogspot.com/
There is no stigma attached to having a prime minister who lies every time he opens his mouth, a home secretary who steals everything she finds that is not bolted down, and an economy that is is bankrupt and needs to be baled out by the IMF. It's all perfectly normal. If you have a Labour government.
It isn't survivable as it would totally destroy the 'Best placed to withstand' claim.
Only one person was responsible for the finances of the nation for the last 12 years. the same man who said made the best placed claim. It is a hollow shell of a claim already. To have to seek assistance from a sort of international 'Ocean Finance, consolidate your debts into one easy to manage payment," would spell the end. Cameron could call for a vote of no confidence and a public show of dissatisfaction.
Osbourne's brilliant Labour have done it again speech would used by every shadow at every occasion.
Game over.
I am staggered by this atmosphere of denial & deflection.
John Redwood points out on his blog today that under ZaNuLab we have increased our country's debt by an order of magnitude since 1997.
Why are the MSM & BBC not shouting this from their rooftops?
We can't let these characters from Animal Farm get away with it.
Maggie foresaw it all - "Socialism is running out of other people's money". And how!
Back in the mid 60's I devised a monster flow chart to set out the Keynesian principles involved in economic management at the time. It owed much to the Phillips Machine, but more to the clarity of JMK's prose and lucidity. Nevertheless, having done this, in applying it to current conditions it was clear that there were serious practical issues. One was leads and lags, another uncertainties and the reliability of the figures, a third, unintended consequences that is unpredictables (events dear boy events), and last but not least George Brown, Richard Crossman, and the trade unions. But I sensed that we were in for a devaluation, cuts (e.g. leaving East of Suez), and more taxes. Inevitably, I was rounded on for disloyalty to my country, failing to understand the critical importance of prestige, and Whitehall knew best. Ho hum............
Fishing out the battered copy I still possess and pawing over it, much has changed, notably in terms of information flows, the financial instruments available and the way the world works. Some things have not. Money is still money, debt is still debt, and sadly politicians and their lobbyists have not changed for the better. Only this time it is all going to be a lot worse.
Someone has to lend us all this money, even it isn't real money. The developed countries are now living by taking in each other's laundry.
International economy is a sham with rules made up as kids do when playing Monopoly - a game also played for play money.
'going to a spa to recouperate' ... 'wellbeing' WTF?
Now who would use language like that?
Step forward Lord Mandelson or as an outside bet Alan Johnson who is very keen on the use of the 'wellbeing' tag.
The guys on PB were debating this yesterday and are in solid agreement that this is delusional rubbish.
I too recall the IMF humiliation - it may not have been that which brought HMG down but it was the shock therapy strings that applied to the funds which kicked off the unions/strikes.
"Recuperation, my arse. More like resuscitation"
Would have made a brilliant title for the piece Iain....with every chance of going viral....theme needs picking up more widely in msm
and as for the word verification...well 'loters'...only one 'o' missing!!
This is disgraceful but in an odd way I admire them: The way that even now they can spin things in such a way as to put a positive light on what is in my view a sign of the abject failure of Brown's economic policies of the last 12 years.
Incredible.
History will show that Brown's G20 deal is illusory as it is simply a re-packaging of previous announcements made in the weeks and months before the meeting.
Read the following for the lowdown on Brown's illusory G20:-
http://www.spectator.co.uk/coffeehouse/3509801/browns-illusory-g20-deal.thtml and
http://blogs.telegraph.co.uk/iain_martin/blog/2009/04/02/g20_ends_in_a_giant_con
http://www.telegraph.co.uk/finance/financetopics/g20-summit/5096801/G20-Summit-This-grand-plan-will-not-shorten-our-dole-queue.html
http://burningourmoney.blogspot.com/2009/04/funny-money.html
So its yet another of Gordon Brown's cunning budgets that falls apart once the small print is examined.
Brown's downfall will be all the more spectacular for his hubris.
New Labour are getting away with issuing numerous lying press statements every day that are printed word for word in the dead tree press and quoted word for word by the BBC. What are the Tories doing about this - NOTHING!
It's a bit like going to A&E indeed... with a saucepan stuck on your head.
And if we had to go to the IMF, what would their conditions be?
What if they stipulated to stabilse the currency that we had to adopt the Euro?
What if they stipulated to cut costs harsh pay control in the public service?
What if they stipulated to cut expenditure by withdrawal of troops from Afghanistan?
Any of these could destabilise the Government (of any stripe). I wonder if Brown is wicked enough to borrow from the IMF and then immediately call for a General Election.
"even like going to a spa"
Holy F*cking christ!!
There's no stigma in being a failure - it's just "deferred success."
http://news.bbc.co.uk/1/hi/education/4697461.stm
Let's hope our creditors are as patient.
DiscoveredJoys said...
"And if we had to go to the IMF, what would their conditions be?"
Surely public sector pay and pensions will be on the agenda. This is another financial time bomb that Gordon has turned a blind eye to, just like banking regulation.
If I recall the '70s correctly it's somewhere between: Intensive Care/Psychiatric Prison/Hospice.
Glory be to the G20. With a single bound, Brown is free and on course for an amazing electoral win. A bail out from the IMF? No more than a loan from chums to help a friend out of trouble.
Not.
Much of what the IMF would ask the UK to do is what the Libertarian Party has seen as necessary back in 2007, e.g. slash public spending, remove trade barriers, dismantle corporatism, reduce red tape and regulation, set sensible levels of taxation, pay off debt, end protectionism and harmful monopolies.
If the IMF does it, we have a foreign power calling the tune. Better our own government. BTW don't expect Cameron to have the cojones to implement what is needed, even if a Conservative Party of old might.
I blogged on this last night. I give it 3 months before we have to go to the IMF after the failure of Obama and Brown to get any additional commottments from other countries. Especially China, their contribution was derisory, considering they're efectively restarting the economies they rely on to by Chinese-made goods.
You're right about the Conservatives: they need to start banging home the point that if Labour DO go to the IMF, its means that there is no more money available to be raised from bonds (which effectively means the rest of the world thinks we're bankrupt) and it also means a failure of the fiscal stimulus model.
The value of the pound will be interesting to watch over the next week. I can't believe the pound has dropped 30% and doesn't get widely reported. Just how far will it have to drop before it gets a wider audiance.
Oh, and if it drops to parity with the Euro, watch out for noises from Labour about joining the Eurozone. I hope the Conservatives have a strategy to avoid meltdown if that ever happens.
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