IMF Bailout is Like Going to The Bank or Spa?

Britain is heading for the IMF for funding, government ministers are admitting. They claim that there should be no stigma attached to the country making such a move, and have launched an extraordinary spin operation in preparation for it being needed.

The government spin operation is designed to make it seem like the most natural thing in the world so that when it happens ministers can be nonchalant and say calm down, we've been clear about this all along. It's a new kind of IMF, a reformed institution we can draw on. Nothing like 1976 then?

"No, think of it as going to the bank. You go to the hole in the wall don't you?" said a minister.

Fuck me, I'm off down the bank first thing tomorrow morning. Got to get there early for my billion pound bailout. Who shall I say sent me?

Developed countries are supposed to be able to finance themselves though a mix of raising taxes and borrowing on the open markets when they need to. When they can't and need a bail-out from the IMF they are bust. It doesn't matter how well it is dressed up as a relaxing trip to the spa.

Smoke and Mirrors

The Telegraph's Iain Martin:

So this is how it ends. The bun-fight at the Excel draws to a close and we get to see the final communiqué. And it is, I'm afraid, pretty much a giant public relations con.


The PM is gravely announcing a $1trillion "stimulus" for the global economy. But it's not the kind of stimulus which Brown has been wandering the world demanding - ie a further co-ordinated boost, involving increased spending or tax cuts by the major economies, to get demand going.


Instead there is $1 trillion for funding the IMF and other related trade business.


It involves: $500 billion funding of increased funding for the IMF, $250 billion of increased drawing rights for the IMF and a new trade finance package amounting to $200 billion. Is this all new money? Don't be silly. Is it being spent now? No. Where's it coming from? All will become clear when the deal is picked apart in the coming days, like a Gordon Brown budget.

It's all very Alice in Wonderland, Lewis Carroll couldn't have done better.