Saturday, 21 March 2009

No bailout, even for Dunfermline!

That should be the message, both from London and Edinburgh:
SNP ministers are preparing to organise a multi-million-pound bail-out to save the troubled Dunfermline Building Society, The Scotsman has learned.

It is understood the Scottish Government is prepared to pump a significant sum into the embattled mutual – possibly as much as £25 million – if this can be done legally and without breaking the rules of the devolution settlement.

Of course, this is clever politics from Salmond:
For them, this is a "win-win" situation. If ministers succeed in keeping DBS viable as a independent Scottish institution, they will have proved the Scottish Government has the ability to spark change for the better in financial organisations. If they fail, they will claim they were hamstrung by the devolution settlement and put immense on the UK government to bail out the troubled building society.
But a bailed-out DBS wouldn't really be independent, would it? The government, Scottish or British, would pull the strings.

At some point it will become clever politics for someone to say "No!" We haven't reached that point yet but we're probably getting there. If the banking crisis had happened six months earlier it's quite possible that Ron Paul would be President of the United States and Messrs Brown and Salmond would be looking very, very silly.

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