As well as working out how to keep LibDems happy about the depth and speed of deficit cuts (and sell much higher taxes to his Right wing) the new Prime Minister must also hope that his classmate sorry Chancellor George Osborne is up to the challenge of EU financial collapse…and Willy Hague is tough enough to tell the EU where to stick their top-up balancing fund.

“The game plan is clearly to use the ECB as shock troops to force peripheral bond yields down and rebuild market confidence,” the Unicredit Group’s chief economist in London said last night, “If that works, then there might be no need to activate any stabilisation funding.”

There are two points here: while Britain is already in for £8 billion, the top-up BF isn’t a finite agreement on amount of money. Our exposure on this one is ‘n’ – and under majoritarian voting, not something we can control. Second, is any of that further input going to make any difference?

All feedback to The Slog throughout yesterday was that the EU will be using the SF before you can say junk bonds.

Europe’s sovereign bond issuance is tumbling already – not because they don’t need cash very badly, but because investors simply don’t believe that the £1.4 trillion bailout plan will be enough to bolster confidence in EU government finances.

Just £17 billion of corporate debt has been sold this month to date, a 60% decline from the same period in April and 85% less than the average for the past year. One of The Slog’s key moles in the US offered this gem of an observation yesterday afternoon:

“I guess you could say the EU liquidity thing is a quick fix prior to a slow death.”

Even the eternal optimist Ben the Benanka admitted the plan is “not a panacea”.

As soon as Brown’s resignation was mooted yesterday – and Peter Mandelson peevishly slammed the door of his limo in the face of journalists (having just told the Sky lobby correspondent to “fuck off”) – I began ringing some credit and currency contacts. As usual of late, the opinion pool was not exactly dark. They all agreed:

* Without root and branch Labour market reform and tough deficit policing, the markets will continue to punish the Euro and withhold lending facilities.

* The stabilisation will kick in quite quickly, but it is a waste of everyone’s money.

* There are signs that national interest is becoming the dominant factor, and by the time Iberia gets nasty, creditor member populations will cry ‘enough’.

* A return to individual currencies would mean disaster on a Titanic scale, as the Mark would be the only currency anyone bought.

* Britain will get dragged into the bailout. “If you look at the rules” said one Paris-based manager, “majoritarian voting can force the British to do pretty much anything”.

So here is a very early test for the Cameron EU sceptic vs Clegg the EU enthusiast (with his pension to consider): as we’re all putting Country before Party as of today, when will be the time to put Country before EU? This is what the former French foreign minister Jean-Pierre Jouyet charmingly remarked about the UK yesterday:

‘“There is not a two speed Europe but a three speed Europe. You have Europe of the euro, Europe of the countries that understand the euro… and you have the English. The English are very certainly going to be targeted given the political difficulties they have. Help yourself and heaven will help you. If you don’t want to show solidarity to the eurozone, then let’s see what happens to the United Kingdom.”

This is destructively mischievous and very Gallic – but there is also an air of desperate envy in the observation. The Eurozone is, by definition, stuck with the Euro. Once all that goes pear-shaped, Britain would be mad to bail out somebody else’s currency before its own: a flexible-rate Pound is the one true advantage we have in all this mess.

I would say Osborne & Little Hague would never allow that to happen. It will certainly be an early test of the paperchains that bind these two very different Parties.