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Last Updated: Oct 9, 2008 - 10:24:18 AM |
IT WAS the most expensive Indian takeaway in history. On the menu was
chicken korma, pilau rice and a £500 billion bail-out.
The most heated political and financial decision of a generation was
taken over a late-night curry and endless horsetrading in the Treasury
late on Tuesday and into yesterday.
Gathered around the table were banking bosses, including Sir Fred
Goodwin of RBS, Treasury officials and the Chancellor, Alistair
Darling, while Gordon Brown, the Prime Minister, was kept updated by
telephone.
The entire economy and Mr Brown's own future rested on the outcome of
the deal.
Whether or not the "poppadom pact" will pay off is still too difficult
to tell.
In the short term, the Prime Minister and the government are boosted by
the fact that they have offered hope to western capitalism through,
perversely, nationalising Britain's banks.
By late yesterday, Mr Brown's aides were briefing that the Prime
Minister had encouraged the leaders of France, Germany and Italy to
follow his plan and shore up their own institutions.
Mr Brown was doing things his way, taking preferential shares in banks
rather than following the lead of America, where toxic debt had been
effectively written off.
Mr Brown yesterday said taxpayers would be in it for the "long haul".
But for how long is a question Downing Street yesterday afternoon could
not answer.
If the rescue package is not enough to stave off a wider economic
collapse in the medium term, and jobs are axed as a result, Mr Brown
will be blamed for saddling taxpayers with more debt.
Regardless of the fact that the Tories have not come up with an
alternative, the perception will still be that the government should
have hammered out the final details before agreeing to the deal.
It is still unclear what banks have to give up in exchange for a
taxpayers' bail-out, particularly as the government is effectively a
silent partner with no position on their boards.
Mr Brown was yesterday in his element during a joint press conference
at No 10 with Mr Darling – handling an economic crisis with little or
no sleep.
He managed to swat off questions from David Cameron, the Conservative
leader, during Prime Minister's Questions and was able to make the
surprise announcement that the Bank of England, in a co-ordinated
strike with other central banks, had slashed the base rate immediately
by half a percentage point. The last time an emergency rates cut was
announced was in the aftermath of 9/11.
The Tories were left floundering, with Mr Cameron having to resort to
asking questions about whether bankers would have their bonuses cut.
Alex Salmond, the First Minister, welcomed the interest-rate cut,
saying: "Sterling rates remain substantially above those of the
European Central bank and the US Fed, and therefore we would urge
further action. However, it is certainly an important step in the right
direction to boost confidence and demand in the real economy."
Jim Murphy, the Scottish Secretary, said he had written to Mr Salmond
inviting the First Minister to take part in talks "anywhere, any time".
He suggested a first meeting next week in Edinburgh to focus on how
Westminster and Holyrood could work to help businesses and families,
and said the Scottish TUC and CBI would take part.
Source:Ocnus.net 2008
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