Has "Fred the Shred" bankrupted Britain?

On a day when thousands of Britons are downgrading their foreign holidays for 2009
(less time away, non-Euro location, or not at all), we must be wondering if Sir Fred Goodwin, former chief executive of Royal Bank of Scotland, has bankrupted Britain. The nationalisation of RBS looks inevitable but quite a few observers consider that the UK will have trouble handling the bank's foreign liabilities.
What will bankruptcy be like? Hopefully, the Brown government will reach a deal before then with the IMF or with the European Union or with both. The IMF tried and tested formula (which probably does not work very well) is to have public sector cuts. In the 1930s teachers suffered pay cuts and obviously I don't think the Labour government would like to attack one of its natural constituencies but it might be
considered.
Ireland is trying to negotiate a pay deal with the unions over the public sector. Its economy is being hit by factors such as the euro interest rate and by the euro exchange rate (depreciation in sterling), which is affecting its exports. If it was not for possible deflation, both Ireland and UK could get away with a pay restraint deal involving below-inflation rises. It looks like the pay freezes and zero bonuses of the private sector will be transferred to the public sector.
Back to Fred the Shred, a former darling of New Labour. I bet Gordon Brown wished he had never met him. RBS has admitted that it overpaid by £15bn to £20bn for Dutch bank ABN Amro but Fred the Shred just ignored the criticism of the deal at the time. He just had to get one over Barclays. It is not hindsight. Quite a few people said the deal was pants but the RBS board and shareholders, the FSA, the Bank of England, the government did not feel it was up to them to do anything about it.
What will bankruptcy feel like? I suppose there could be a Latin American rush to the banks and building societies by people to convert their savings into dollars. There might be emergency exchange controls to prevent people taking foreign exchange out. And Gordon Brown will still be there talking about fairness, enterprise etc while the Queen is approving the establishment of a National coalition government.
www.searchaccountant.co.uk
Probably all of a pipe dream. Although Gordon Brown is being found out by events I want him to succeed in the bank rescue. However, he has got to give himself a chance. Last weekend rather than trying to lead the UK government in this deadly serious financial/economic crisis he was in Egypt discussing Gaza. This might be good for the ego but looks like he is shirking domestic problems.