The Guardian, one of Britain’s most respected papers, reports on the British gov’t’s second attempt at bailing out their banks; without looking like they’re bailing out the banks.
As the Treasury last night finalised its second sweeping banking revival package in three months, Downing Street was preparing to go on the offensive, justifying the package not as a bail-out for the banks, but an attempt to protect companies and families trying to secure a mortgage. The £200bn insurance scheme is not for the culpable banks, but for their innocent customers, ministers will say.
The tactics, however, betray a nervousness in Labour circles that the public will simply not understand why there is a second tranche of help going to Britain’s bankers, who have already received billions of pounds of loans, guarantees and capital.
Opinion polls show government popularity falling in the new year.
Privately, something close to desperation is starting to develop inside government. After watching the slide in bank shares on Friday, one cabinet minister did not altogether joke when he said: “The banks are f**cked, we’re f**cked, the country’s f**cked.”
Buiter, according to Cameron, told him “the last time we built up this much debt was when we were fighting … half of Europe. This time we’ve done it on our own. It’s quite a chilling thought. This is my worry is that it’s like the man in the casino has lost it all on red and you know … what’s to stop Gordon putting it all on red all over again?”
Brown, however, will do so today, and who knows if he will win. [more]