What happens after Greece?

Am in Brussels, where Gordon Brown just arrived … he faces a more than usually frustrating evening.

He’s long prided himself on a mastery of the sort of economic crisis the Greeks have plunged the Eurozone into but we are not in the Euro and not part of that chat.

It must feel for him a bit like being a top seeded player watching an amateur tennis game, but unless they ask him for advice he knows he’d best keep his nose out. And he would be keeping it out of one of the biggest crises to have hit Europe.

There’s the matter of pride and autonomy: do you call in the IMF and risk being seen as a zone that can’t look after itself? The French seem to have lost that argument and the Germans won it … it’s now expected that the IMF will step in in some form.

5PM UPDATE: And lo it came to pass. The French are now briefing that the deal is done. The IMF will lead any rescue of Greece with Europe holding its hand. The French and the Germans cooked up the deal just as the summit was about to begin. It’s a long way from where the French wanted to be, still a deep concern for Germans very unhappy at the thought of a bi-lateral loan for Greece, but it will calm some nerves for now.

(We recently made a film about the IMF’s 1976 bail-out for the UK – you can see it here – and it was striking how the IMF intervention acted as a stimulus to confidence, a kitemark the financial sector respected not a tainted association that makes things worse – markets were quickly reassured after the deal was struck.)

You get a flavour here of mounting tensions. Most of the Eurozone seems to take a different view from the Germans about how the European economy can turn round. Germany seems to be seen as Europe’s own China, accumulating surpluses to everyone else’s detriment.

And there are mounting fears about who is next, after Greece. The big worry is Spain, a bigger economic player than Greece, and giving Euro economists a lot of cause for concern right now.

What will happen? The land of truffles will surely bring us fudge. Whether it’s tonight in gatherings after the formal dinner and after Gordon Brown and other non-Eurozone visitors have been sent off to bed, or another time soon, the money is on a joint IMF/Eurozone rescue for Greece.

The IMF could end up putting up most of the cash, many feel it would have to have the lead role whatever gloss Eurozone countries wanted to put on the final “joint command” arrangement. Anything else wouldn’t work because the IMF is seen by the markets as scrupulously unlobbyable … the Eurozone, to put it mildly, somewhat less so.