Britannia Radio

TELEGRAPH 4.4.09
Look to America to lead us out of the recession
The nation that inspired Churchill in 1929 holds the key to recovery 
once again, suggests Charles Moore
[This is a very misleading summary of what's below - Sub-eds doncha 
hate 'em -cs]

An email doing the rounds tries to show what a trillion dollars look 
like. Counting in $100 bills, the computer generation illustrates how 
much space different amounts take up. A million dollars would fit in 
a carrier bag; $100 million require a pallet about half the size of a 
man. A trillion dollars show the man dwarfed by double-stacked 
pallets stretching into the far distance.
The fact that so much money is so hard to visualise helps to explain 
why Gordon Brown seemed so happy at the G20 Summit. It is much easier 
to save the world than it is to save the Dunfermline Building Society.

The world is so big, and the sums involved so huge, and the forces at 
work so complicated, that no leader can ever be held to account for 
the detail. The big people can have the big ideas, and the little 
people can have the headache.

Even Mr Brown has some difficulty with the figures. The $500 billion 
for the IMF, the $100 billion from the EU: haven't they been 
announced already? And aren't the Special Drawing Rights of $250 
billion not really funded, and therefore unsuitable for inclusion in 
the grand total? Yes, a new amount of $40 billion seems to have come 
from the Chinese. That leaves about $210 billion of possibly new 
money not quite explained.

But, for the Prime Minister, only the overall impression matters. For 
months, the entire British government machine has been mobilised to 
produce a G20 "triumph", and this week it did its bureaucratic duty.

The communiqué is a New Labour classic. It declares an end to poverty 
and misery. It is peppered with favourite Brown Budget-speech words 
like "unprecedented", "concerted", "tough", "sustainable", 
"inclusive", "hard-working families", "fair" and "green". "Taken 
together" (a pure Whitehall phrase that, which reheats all sorts of 
decisions cooked earlier), the measures constitute the biggest, 
brightest, best and most beautiful thing ever done by the human race.

In reality, the communiqué sets no timetable for achieving the Doha 
Round of trade negotiations, and therefore the tariff walls will go 
on growing higher every day. Nothing new is offered on toxic debt, 
which was what provoked the call for the meeting in the first place. 
And Mr Brown was prevented (thank goodness) from his earlier declared 
ambition of coordinating yet more fiscal stimulus. So the only clear 
result - probably a good one - is the advancement of quantitative 
easing and more help for stricken countries, both through the IMF.

The summit promoters propose a comparison with Bretton Woods, which 
established the modern international financial order. It is an 
extraordinary boast. The preparation for Bretton Woods took two and a 
half years, and the final conference itself, in July 1944, lasted for 
four weeks. Its machinery ran the world money system until 1971, and, 
in some respects still does so.

The London G20, on the other hand, was dreamed up only a few months 
ago, and met for a couple of half days. The G20 has no secretariat. 
It has created no new institutions (beyond renaming an existing one). 
It makes no rules.

President Obama seems to think that Bretton Woods was a piece of cake 
compared with the London G20. "Just Roosevelt and Churchill sitting 
in a room with a brandy," he said this week (actually, neither man 
was at Bretton Woods), "that's an easy negotiation, but that's not 
the world we live in."

But the interesting question that the G20 does raise is, "What sort 
of world do we live in"? And here, if only he had not oversold his 
own success in advance, Mr Brown could have won more acclaim than he 
did.

Look at the photograph of the world leaders taking part. The picture 
tells the story. There are black faces, oriental faces, a turban and 
a burnoose. Their presence is not tokenistic. The turban (the Indian 
prime minister) speaks for more than a billion people. President Hu 
Jintao of China speaks for 1.33 billion (though none of them elected 
him). This is not a United Colors of Benetton poster, but an 
authentic reflection of who runs the world.

The G20 was therefore the right forum for projecting a global 
response to the global crisis, in a way that the G8 could not be. All 
these leaders shared a bit of glory. That implies, if things go yet 
more wrong, that they must share blame.

Mr Brown said that the crash had been like "a power cut across the 
whole world". The presence of the G20 together and, apparently, 
agreed, gives some reassurance that new power lines are up and running.

What is harder to discern is where the power is generated. To 
President Nicholas Sarkozy of France, the "Anglo-Saxon model" on 
which the world has been living since Bretton Woods, is over: "a page 
has been turned". The German Chancellor, Angela Merkel, thinks that 
the world now has "a clear financial architecture".

Both are saying, in effect, that they are winning the battle for 
regulation against freedom, and therefore the Anglo-Saxons are losing.

On the other hand, everyone seemed content to leave it to Mr Obama 
and Mr Brown - as if they were the modern equivalent of Roosevelt, 
Churchill and the brandy - to concert the show and to do most of the 
talking. Neither the Continentals, nor India, nor China tried to hold 
the stage.

I am sure that one of the reasons that there was such panic last 
autumn is that the world really did doubt whether wealth was going to 
go on coming from the United States. However much people resent 
American power, they are terrified by the prospect of its collapse.

During the Wall Street crash of 1929, Winston Churchill happened to 
be in New York. He visited the stock exchange, and then went up a 
skyscraper and surveyed the Hudson river full of shipping and the 
Manhattan streets crowded with people: "No one who gazed on such a 
scene could doubt that this financial disaster, huge as it is, cruel 
as it is to thousands, is only a passing episode in the march of a 
valiant and serviceable people who by fierce experiment are hewing 
new paths for man".

It is interesting that people still, secretly, think that way. It is 
to America that they look for recovery, to America that they look - 
at today's Nato summit in Strasbourg - for leadership. It was to 
President Obama that all the leaders looked in London this week. He 
said: "We [the US] exercise our leadership best when we are 
listening" - not a loss of leadership, then, but leadership of a 
different style.

Some credit is due to Mr Brown for making London the world stage for 
this act of renewal.

His political problem, though, is what is called "the Wimbledon 
effect". We offer the venue, but can't supply the good players. Mr 
Brown said he saw a New World Order emerging this week. Perhaps he 
did, but does the way he is running his country qualify him to be 
part of it?
============================
THE INDEPENDENT 4.3.09
(Shortened)
Brown's assignment for next G20 meeting: a blueprint for IMF reform

By Nigel Morris and Andrew Grice

The International Monetary Fund (IMF) is to be turned into an 
economic rapid reaction force under plans being drawn up by Gordon 
Brown to transform the world's financial watchdog.

Alongside moves agreed at the G20 London summit to treble its 
resources, the IMF will be given a new remit to intervene earlier 
when countries face economic crisis.
The Independent has learnt that the Prime Minister will report back 
to the next gathering of G20 leaders in September in New York on how 
the IMF can be overhauled.

[- - - - - - - - -]. It wants a new-style IMF to be able to aid 
countries when economic problems loom rather than acting as a port of 
last call when they face bankruptcy. The makeover is also aimed at 
removing the stigma countries feel at having to turn to the IMF for 
emergency help.
[- - - - - - - - ] ministers warned that the impact of the G20 
communiqué would take time to feed through to the "real economy".
[- - - - - - -].
Mr Darling acknowledged that unemployment, which has just passed the 
two million mark, would carry on increasing. [- - - - - - -]
The Conservatives yesterday accused Mr Brown of exaggerating the 
extent of the new money announced at the summit in his effort to win 
headlines. They argued that some of the claimed $1.1 trillion 
blueprint for stimulating world growth amounted to "double counting" 
as parts of the package had been previously announced.
George Osborne, the shadow Chancellor, said: "[It is] the day after 
the show has left town and some of the Prime Minister's claims about 
a 'new world order' and a 'global grand bargain' look more like spin 
over substance." The Tories also believe that voters will be 
unimpressed by Mr Brown's globetrotting and that their attention 
remains firmly focused on Britain's economic woes.

Vince Cable, the Liberal Democrat Treasury spokesman, said the G20 
summit "stopped the rot" in the global economy but called for more 
action to boost trade and tackle tax havens. "The world is a 
different place today, I think it's better. This meeting could have 
failed completely but it's come to some good positive conclusions," 
he said.
============================
TELEGRAPH 4.4.09
Britain should not fear asking for IMF cash
Britain should not be afraid or ashamed of taking money from the 
International Monetary Fund, a senior Cabinet minister has told the 
Daily Telegraph.

By Andrew Porter Political Editor

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."

World leaders agreed in London to increase resources available to 
help economies in trouble to $750 billion.

Gordon Brown said in his closing comments to the G20 summit that 
countries like Mexico, which is not in immediate danger of economic 
collapse, were considering using the IMF.

Stephen Timms, the Treasury minister, and Lord Mandelson, the 
Business Secretary, said this would remove some of the "stigma" of 
using the facility.
Mr Timms was quoted as telling a meeting earlier at the G20 that 
Mexico's move showed "we have gone beyond the era of stigma."

Mr Brown, when asked whether Britain would now be free to use the 
system, replied that he was "not proposing to do so".

But yesterday Simon Johnson, the former IMF chief economist, said: 
"In the past, you got loans from the IMF when you were facing 
complete disaster. Now the IMF is going to come in before you get 
into real trouble.
"Gordon Brown and his ministers, they need help. Your economy is in 
big trouble."

George Osborne, the shadow chancellor, seized on the comments. He and 
David Cameron have repeatedly warned that Britain may have to go cap 
in hand to the IMF.

Mr Osborne said: "This is a pretty extraordinary warning from the 
former chief economist of the IMF and shows just what a mess 
Britain's public finances are in."

Mr Timms began the softening up process last month when he told MPs 
that the new IMF lending instruments would help "overcome the problem 
of stigma that has been attached to IMF programmes in the past, to 
the extent that some countries feel it is politically impossible to 
contemplate approaching the fund."