Greek lesson

The scenes in Athens, with thousands of protesters attempting to storm the Greek parliament, should send a chill down the spines of the British government this weekend. It is Britain, not Greece, that has the worst deficit in Europe. The story of the next four years will be one of brutal cuts.

As the Greeks found, the day of fiscal reckoning can be delayed — but not avoided forever. An administration can buy time by cooking the books, talking about debt as if the money arrived down a moonbeam. But soon, payback time arrives.

Now that the election is over, Britain’s payback time will start, and the anger among the electorate will be all the harsher because the main political parties were so dishonest about the scale of the pain to come. The Tories claim that no further cuts will be needed than those they have outlined already — making it extraordinarily difficult to introduce cuts in an emergency budget.

In this issue Niall Ferguson proposes a solution: that the new Chancellor does not wait for a crisis but starts negotiations with the International Monetary Fund — just as James Callaghan did in 1976. It would give an external mandate for the cuts, and bring some much needed honesty to the debate.

The news is unlikely to be received well. But swift action could save the new government — and the country — from a Greek honeymoon.