Britannia Radio

These just about sum up the state of play this morning with most 
gloomy over the G20. 

Failure is widely predicted but we must all 
pray that it doesn't end in bitterness and recriminations as well.

xxxxxxxxx cs
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DAILY MAIL 28.3.09

Disloyalty. Humiliation. The week that Brown's grand vision was 
brutally shattered
By PETER OBORNE

For the past three months, Gordon Brown has truly cared about only 
one event: the G20 economic summit he will host in London next week.

He resolved that he would use this gathering of world leaders to save 
the global economy, salvage his own diminishing reputation and 
provide Labour with a launchpad to win the next General Election.

In particular, the Prime Minister planned to construct what he calls 
a 'grand bargain' between the world's leading industrial nations, 
which would see them commit themselves to a massive spending package 
that would kickstart the global economy and thereby jolt us all out 
of recession.

Finally, he hoped that, as a consequence, David Cameron and the 
Tories (who have opposed his public spending plans) would become 
isolated from the international consensus.

However, in what amounts to a personal tragedy, Gordon Brown's dream 
has died.

The last few days have seen a series of brutal, debilitating and 
totally unexpected humiliations as one world leader after another has 
come out and rubbished his idea of extra spending.

First, the Czech prime minister Mirek Topolanek, who commands 
particular influence because his country holds the presidency of the 
EU, asserted that extra spending was 'the way to hell'.

Then German Chancellor Angela Merkel said she also opposed them - as 
do French president Nicolas Sarkozy and European Commission president 
Jose Manuel Barroso.

But Gordon Brown's grand plan to rescue the world economy has not 
merely been scorned abroad. At home, he has come under fire - most 
notably from Bank of England governor Mervyn King, whose 
extraordinary intervention this week saw him make it witheringly 
plain that he was opposed to the kind of giant fiscal stimulus the 
Prime Minister so badly wants.

As I revealed in this column two weeks ago, King has become 
increasingly worried that the solvency of the British state could be 
thrown into jeopardy.
In the wake of the torpedo that the governor launched while giving 
evidence to the Commons Treasury Select Committee, Gordon Brown has 
been forced to dramatically pare down his ambitions.

Speaking in New York the next day, he acknowledged that 'nobody is 
suggesting that people come to the G20 meeting and put on the table 
the budget that they're going to have for the next year'.

In effect, he has been forced to concede that the best he can hope 
for next week is a series of reforms in global regulation of the 
financial markets. These are clearly important, but they are nothing 
like his original, ambitious plans.

It is impossible to overstate how bruising the events of the past few 
days have been. Gordon Brown has not merely seen key elements of his 
economic policy stripped away; he has also lost his political strategy.

This, in turn, means that the landscape at Westminster has changed 
fundamentally. Principally, this is to the advantage of David 
Cameron. Over recent months, it has become fashionable to denigrate 
the Tory leader and his Shadow Chancellor, George Osborne.

Critics love to say the pair have no alternative ideas and are merely 
passive beneficiaries of Gordon Brown's misfortunes.

This week's events, however, show this is not the case. The bold 
decision made by Cameron and Osborne in November to withdraw support 
for the Government's spending plans was a brilliant move. [if 
desperately overdue! -cs]

At the time, many commentators thought they had made a terrible 
mistake that might cost the Tories the General Election. Gordon Brown 
and his advisers certainly believed so.

This led Brown to try to forge the international G20 coalition that 
he hoped would make the Conservatives look completely out of step 
with world opinion and intellectually bankrupt.

Brown labelled the Tories the 'do nothing' party. For a while the 
nickname stuck and Labour rose in the polls. Yet the situation has 
altered.

With David Cameron vindicated, suddenly it is Gordon Brown whose 
reputation for financial prudence is in tatters. Tory credentials to 
run the British economy are immeasurably enhanced. At another level, 
Gordon Brown's disastrous misjudgment over the fiscal stimulus has 
led to serious doubts about Labour's competence to guide Britain out 
of recession.

These concerns have been exacerbated by a further and very unexpected 
factor: the outbreak of something close to open warfare between 10 
Downing Street and the Treasury.

Indeed, communications between Gordon Brown and Chancellor Alistair 
Darling have broken down. Darling even sided with Mervyn King against 
Downing Street.   [er - - Downing Street is where he lives - at No:
11.  Communications may have broken down with his neighbour - perhaps 
-cs] .

It was the first time during his Chancellorship that he has stood up 
to Gordon Brown, and I am told there is a new mood of confidence and 
independent assertiveness among Treasury officials as a result.

However, Alistair Darling must realise that such disloyalty is a 
risky game. As a long-time ally of Gordon Brown, he will know the 
Prime Minister is an extremely vindictive man who never forgives or 
forgets. If he gets an opportunity to sack Darling, he will.

Another consequence of this week's humiliation of Gordon Brown 
concerns his relations with Barack Obama. The new U.S. President was 
never keen to attend next week's G20 summit and still regards it as 
an almost complete waste of time.

Indeed, he is so resigned to the London meeting being a failure that 
he is contemplating summoning his own meeting of world leaders in 
Washington to address the financial crisis, a move that would heap 
humiliation upon humiliation on Gordon Brown.

Furthermore, there is grave concern at the White House about the 
state of the British economy. The U.S. relies heavily on British 
military support in Iraq and Afghanistan, and fears that the collapse 
of the British Government's ability to raise credit could jeopardise 
that support.

Indeed, there was consternation and - to quote one White House 
adviser - 'shock' at the failure this week to sell £1.75 billion 
government bonds because of investors' lack of confidence in the 
British Government's creditworthiness.

Downing Street may have brushed off this fiasco as a minor matter of 
little importance, but in Washington it is being taken very 
seriously. There is even speculation that the U.S. may have to come 
to the aid of the broken finances of its close ally.

These are tough times for Gordon Brown as recession deepens into 
slump. Events over the coming months will create an increasingly 
difficult obstacle course. As soon as next week's G20 summit packs 
up, the Government has to focus on the Budget, which Gordon Brown put 
back from its traditional date in mid-March so its decisions could 
reflect the international consensus for big spending plans that he 
had hoped the London conference would approve.

Now, however, the Budget will merely reveal the full scale of our 
national debt. After the Budget come the local and European elections 
in June, in which Labour faces certain electoral disaster. Matters 
could scarcely be more grim for the Prime Minister.

Indeed, they are getting so bad that I am no longer as certain as I 
once was that he will lead Labour into the next General Election. 
There is a possibility that he may face mutiny over the months ahead.
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THE TIMES 28.3.09
George Soros: Britain may have to seek IMF rescue

George Soros said there was a possibility that Gordon Brown would 
have to beg for billions of pounds in international aid

Britain may have to go to the IMF for a huge financial bailout, the 
influential investor George Soros warns today.

The man who made $1 billion on Black Wednesday in 1992 told The Times 
that Britain was particularly vulnerable to the economic crisis.

Mr Soros - speaking days after an auction of government bonds failed 
for the first time in 14 years, ringing alarm bells about Britain's 
ability to fund its growing debts - said that Gordon Brown might have 
to go begging for billions of pounds in international aid. He also 
warned that next week's G20 summit in London was the last chance to 
avert a full-scale depression that could prove worse than that in the 
1930s.
"You have a problem that the banking system is bigger than the 
economy . . . so for Britain to absorb it alone would really pile up 
the debt," he said.

Asked about the chances of Britain having to seek help from the 
International Monetary Fund, he said that if the banking system 
continued to collapse, it was "a possibility". 

At this stage, he  added, it was "not a likelihood"

He was not optimistic about the G20 meeting, saying the odds were 
that it would fail because there were so many differences of opinion. 

The price could be years of economic devastation worse than the Great 
Depression. "It is really a make-or-break occasion."

It would be a disaster if the meeting were allowed to turn into a 
talking shop, he said. "It's not enough to state general principles. 
You've got to come up with practical measures that are going to 
provide protection to the developing world, periphery countries, 
against a storm that originated from the centre, against a calamity 
that is not of their own making." [That's what the South Americans 
pointed out forcibly to Brown -cs]

He spoke amid more gloom over the British economy after official 
figures showed that output shrank by a worse-than-expected 1.6 per 
cent in the final three months of 2008. It was the biggest fall since 
April-June 1980.
Mr Soros refused to blame Mr Brown for failing to prevent the crisis. 
"He underestimated the severity of the problem but so did most 
people. Part of the perceived role of a leader is to cheerlead so you 
can't really blame him for that."

Britain has not sought IMF help since 1976 when, with inflation 
approaching 27 per cent, Denis Healey, then the Chancellor, applied 
for a loan, shredding confidence in the Labour Government.