Britannia Radio

Crisis reports follow below including a preliminary report of Brown's 
first stop on his world tour .  I'm gad i didnt have to listen to the 
EU parliament speech.  The report would suggest its content was 90% 
'buttering-up' and flattery both of his audience and of the Obama 
administration.

xxxxxxxxx cs
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BBC Blogs 24.3.09
1. Nick Robinson
On board the G20 express

And we're off. Welcome to the latest and the last leg of Gordon 
Brown's Save the World tour.

The stops on this leg - Strasbourg, New York, Brasilia, Sao Paulo and 
Santiago. It's all part of the prime minister's efforts to hammer out 
an international consensus ahead of next week's London G20 summit.

There are in truth three competing agendas for the G20. The first is 
the desire of Brown and President Obama for a further stimulus to get 
the economy moving again and, even more importantly, to give them 
domestic political cover for the stimulus that they have already 
unveiled and wish to expand.

Europe of course doesn't want to play this particular game.
The second agenda is regulation. The Europeans see this as an "I told 
you so" moment. They always believed that the Anglo-Saxon economies 
were growing too fast.  [But Germany is in the worst state! -cs]

There is a long gap between their ideas for trans-European regulation 
and Gordon Brown's talk of co-ordinated responses by different 
national regulators.

The third part of the agenda is other bits and bobs, with the ideal 
of regulating tax havens top of the list. This is popular with all, 
and maybe significant in the long term, but of little immediate 
consequence for the prospects of the economy.

Some ministers grumble that Gordon Brown has had little time for 
anything else. They fear that the summit will mean little down the 
Dog and Duck.

These are fears that Stephen Byers has articulated today in an 
article for Prospect, in which he says "the difficulty that is now 
emerging in relation to the G20 is that it's simply too ambitious. An 
exhaustive agenda is being put forward but tries to do too much."

Interestingly, City folk that I've spoken to think that what really 
matters is the appearance of agreements other than the substance of 
what is agreed.

Welcome on board the G20 express. It should be quite a ride.
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2. Robert Peston
Geithner versus Darling

Timothy Geithner's partnership with the private sector to buy 
impaired assets is considerably less ambitious than Alistair 
Darling's asset protection scheme.

That can be seen from the crude numbers.

The British chancellor is providing insurance against losses on more 
than £600bn of poor loans and imprudent investments held by just two 
banks.

Geithner, the US Treasury Secretary, is helping to fund the purchase 
by newly-created investment funds of £350bn of such assets held by 
all US banks - though the total could rise to double that.

Even allowing for important differences between the two schemes, such 
as how the assets are valued and what share of loss goes 
automatically to the private sector, there's little doubt that in 
this instance, US taxpayers are less at risk of loss than British 
taxpayers - which is another way of saying that it represents a more 
modest "bailout" (to use the emotive phrase).

Geithner seems to be hoping that the mere existence of buyers for 
these hard-to-sell assets will lead to a rise in their market price, 
thus strengthening US banks' balance sheets even if the banks retain 
the relevant assets.

In that sense, his scheme is smaller than the UK's and is more market-
based .

But it'll be a bit eggy for Geithner if it turns out that he can't 
persuade private-sector funds to stump up even the relatively modest 
amount of readies he wants from them.

As Stephanie Flanders says, the two governments are attempting to 
skin the same elusive feline with different techniques. Which is better?

My hero Harry Hill would say: "there's only one way to find out - 
FIGHT!"

If the contest is in the stock market's reaction, today's bounce in 
share prices looks good for Geithner.

But it will take months to determine whether either the US scheme or 
the UK one - or both - has at last brought a bit more vital certainty 
to the valuation of banks and their assets.

It's certainly worth noting that the British insurance scheme has had 
a very positive impact on Lloyds' share price, which has risen almost 
50% over the past fortnight or so.

Unless there's a sudden and unexpected reversal in Lloyds' share 
price, the new shares it is selling may not after all end up being 
dumped on taxpayers: they may be bought by mainstream, private-sector 
investors and the state could yet remain with a stake in Lloyds of 
less than 50%.
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BBC ONLINE 24.3.09
Europe 'must lead downturn fight'
[fasten your seat belts -cs]
The European Parliament speech came at the start of a pre-G20 tour

Gordon Brown has said that Europe is "uniquely placed" to provide 
world leadership in the economic downturn because of its history of 
co-operation.

He told the European Parliament that the UK was not "in Europe's 
slipstream but firmly in its mainstream".

The EU had to promote a "principled economy", involving the 
implementation of "tough regulatory standards".

Mr Brown was speaking at the beginning of a tour which will also take 
in the US, Brazil and Chile.

The speech comes ahead of the G20 meeting, in London, on 2 April, 
which brings together leaders from industrial and emerging market 
countries.

'One Europe'
Mr Brown called for a "truly global society", with greater "fairness 
for all".

He told MEPs in Strasbourg: "Today there's no old Europe and no new 
Europe... We have one Europe and it's our home Europe.
"I stand here today proud to be British and proud to be European: 
representing a country that does not see itself as an island adrift 
from Europe but as a country at the centre of Europe, not in Europe's 
slipstream but firmly in its mainstream."

He added: "A good society and a good economy must have a strong set 
of values - not values that spring from the market, but values that 
we bring to the market."

Mr Brown said: "I propose that we in Europe take a central role in 
replacing what was once called the old Washington consensus with a 
new principled economy for our times."

He reiterated the warning against protectionism that he gave in a 
speech to the US Congress earlier this month, calling it "the 
politics of defeatism and retreat and fear".

Mr Brown said: "Instead of heading for the rocks of isolation, let us 
together chart the course of co-operation. That is in all our 
national interests."

He insisted the arrival of US President Barack Obama heralded "a new 
era of heightened co-operation between Europe and America".
Mr Brown added: "Never in recent years have we had an American 
leadership so keen at all levels to co-operate with Europe on 
financial stability, climate change, security and development, and 
seldom has such co-operation been so obviously of benefit to us and 
to all the world."

For the Conservatives, shadow chancellor George Osborne told the BBC: 
"The argument we have with him is that he doesn't meet the rhetoric 
abroad with the rhetoric at home.
"He's going abroad to drum up support for a failed system."
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CONSERVATIVE HOME 24.3.09
George Osborne declares Mervyn King's opposition to a further fiscal 
stimulus as a "defining moment"
Jonathan Isaby

The Governor of the Bank of England, Mervyn King, appeared before the 
Treasury Select Committee today and made comments expressing his 
opposition to a further fiscal stimulus.

He said:
"There is no doubt that we are facing very large fiscal deficits over 
the next two to three years... I think it's right to accept that when 
the economy turns down and the automatic stabilisers kick in, so the 
increased benefit expenditures and lower tax revenues are bound to 
lead to higher fiscal deficits. And it doesn't make sense to try and 
offset that.

"So we are going to have to accept, for the next two to three years, 
very large fiscal deficits. But given how big those deficits are, I 
think it would be sensible to be cautious about going further in 
using discretionary measures to expand the size of those deficits. 
That's not to rule out targeted and selected measures that may find 
those areas, whether it's in the labour market, whether its in 
corporate credit, that can do some good.

"But I think the fiscal position in the UK is not one where we could 
say, well, why don't we just engage in another significant round of 
fiscal expansion. We could do more monetary easing if necessary, but 
monetary policy should bear the brunt of dealing with the ups and 
downs of the economy."

Shadow Chancellor George Osborne has responded as follows:
"This is a defining moment in the political argument on the 
recession. The big debate in British politics about the recession has 
been whether or not the country could afford a debt-funded fiscal 
stimulus... The Governor of the Bank of England no less has said 
Britain cannot afford a further fiscal stimulus. He goes on to say 
that monetary policy should be the main tool to tackle the recession.

"This is hugely significant, as it completely vindicates the big 
decision taken by David Cameron and myself on the economy, and it 
leaves Gordon Brown's political plans for the G20 and the Budget in 
tatters."

George Osborne is right to highlight this: despite the Prime 
Minister's rhetoric, it is he who is increasingly isolated on this 
issue. - Jonathan Isaby
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