The choreography of the emergency budget
The fiscal dance steps between now and 22 June are choreographed with a precision worthy of Balanchine, starting with the David Cameron speech that has just concluded.
Two years ago a senior conservative businessman told me George Osborne planned to institute an emergency review of the public finances on coming to power; that it would probably find growth was not as predicted, and other unexpected line-items not quite right; and that therefore cuts would have to be bigger than expected. And so it will now come to pass.
However, in the intervening period two events have taken place that complicate matters for Mr Osborne.
First, the Greek fiscal crisis. This began with an incoming government, er, discovering that its predecessors had cooked the books; that the budget deficit would be bigger than expected and thus cuts needed to be much harsher.
Not un-noticed by the rest of the world, this then resulted in a debt-downgrade, followed by an emergency budget which nobody liked, and then another series of debt downgrades.
In the post-Greek situation any claim by a finance minister that "the books have been previously cooked and the deficit is worse than we thought" is in danger of rattling the markets.
I interpret the G20's strong signal for Britain to slash its deficit, together with other high deficit countries, as an attempt to bolster market confidence during the delicate unpicking of the Alistair Darling deficit reduction plan that will now take place.
Second, the need to govern in coalition with the Libdems.
I understand that, during the coalition negotiations during the weekend after the election, a key issue for the Libdems was to have both a voice inside HM Treasury and "eyes and ears".
Any process of discovering Budget 2010 to be, as George Osborne declared it in advance of the election "a work of fiction", had to be itself subject to scrutiny. On top of that, any further tightening on top of the Conservatives' proposed envelope of deficit reduction had to be done "non-ideologically". That is the narrative behind Nick Clegg's intervention on Sunday - that cuts will not be done in a "Thatcherite" way.
Mr Cameron's speech on Monday morning outlined the scale of the cuts they expect to impose: it will be used as an opportunity to completely re-think what services the public sector delivers.
On Tuesday, Mr Osborne will outline the mechanism for doing what Alistair Darling failed to do - a three-year spending review with departments finally getting their spending limits set: ie, turning the medium-term public spending projections into actual budget limits for minsters. There will be "consultation" but also a "star chamber" - ie repression.
Sometime in the days before 22 June, Sir Alan Budd will deliver his verdict on Alistair Darling's last budget. If he finds, as the man who appointed him believes, it is a "work of fiction" - I expect it to be in the following areas:
a) Growth. The Treasury's growth projection of 3.25% was seen as high by independent forecasters. However, one caveat: it is accepted by the Bank of England, on the basis that the £200bn of quantitative easing money has largely yet to filter through into demand.
b) The "housing and finance" component of deficit reduction: when it calculated how it would reduce the deficit by 90bn, the Labour-led Treasury assumed around 17bn would be regained through a revival of tax receipts from home sales and the finance industry. This is on top of any natural effects of returning growth. Many economists were sceptical about this.
c) Efficiency savings: despite the promise of efficiency savings becoming the AK-47 of the guerrilla warfare between parties before the election - ie the weapon of choice - there is no proof that efficiency savings ever work. The last attempt to measure Labour's efficiency savings found at least half had not been measurably delivered. If Budd's boffins find Labour's in-progress efficiency programme has not delivered they will add this to the pile of problems.
What we've learned form the Greek budget process is that governments start out with Plan A; then an emergency budget comes along in which they protect "the weakest" - in the Greek and Irish cases hammering public sector workers but maintaining services where possible. Finally, in the face of adverse market reaction, they pass budgets that actually slash services they said they would protect. If that doesn't work they lose sovereignty over their own budget to other countries or the IMF.
Mr Cameron is clearly trying to avoid this happening - but as he said in his speech, Greece is the warning.
The point about tightening the budget by close to 90bn a year is that it is certainly do-able. The big ideological discussion is whether you use tax or spending: interestingly during the stimulus phase, the spend/tax mixture was 2:1 globally. Britain's new government is pledged to achieve "the majority" of tightening through cuts - but this still leaves a lot of room for tax rises.
There are two questions though: first, is it doable without causing a double-dip recession? Since the Treasury under Mr Darling always factored its own spending plans into the growth projections, we should expect the emergency budget to come clean on this.
Second, does the "unexpected" size and nature of the new deficit projection cause one or both parties to say they can no longer stand by their manifesto commitments to ring-fence aspects of departmental spending (hospitals, schools and aid)?
If it comes to pass that, with heavy heart, they now have to slash the NHS budget, cancel Trident etc - it will be interesting to see if that can be choreographed.