Matthew Lynn

Poverty will be abolished. Governments will be able to spend again. Inequality will be eradicated, our welfare systems secured and the power of the tech giants will finally be curbed. We will hear a lot of hype about today’s global tax deal. Given that the liberal-left have spent the last decade complaining that the main problem in the world is that Apple and Facebook don’t pay enough tax, a lot will be riding on the agreement reached by the finance ministers of the G7 today. There is just one small problem, however. The deal is an unworkable mess. Sure, the headlines are fine. There will be a global minimum corporate tax rate of 15 per cent designed to stop countries from unfairly competing with one another.

Heinz is expanding a huge factory in the UK. Tesla is reportedly scouting the north for locations for a new car or battery plant. Even the pound is bouncing to three-year highs.  It has been a difficult few weeks for some hardcore Remainers. Still, at least there is finally something to cheer them up. Tim Martin, the pugnacious founder of the pub chain JD Wetherspoon argued today that the government should relax immigration rules to ease a shortage of labour.  For the dwindling band of believers in the EU, it was a gotcha moment. At last, one of the leading backers of our departure from the EU was experiencing some ‘Bre-mourse’. 'Brexit fantasies succumb to Brexit reality,' tweeted the former editor of the Financial Times Lionel Barber.

It is a leading player in finance, and it's companies are giants in life sciences and consumer goods. There were already lots of similarities between the Swiss and British economies, except that they are quite a bit richer and more successful than we are. Now we have something else in common: we have both been frozen out of the European Union’s Single Market. But hold on. Isn’t there an opportunity there as well? In truth, this would be the perfect moment to offer the Swiss a deal that would work for both sides – a common market. The Swiss have always had a fractious relationship with the EU.

The United States is growing at such a blistering pace the Federal Reserve may have to raise interest rates. In Britain, retail sales grew by nine per cent this month, the fastest pace on record, as the economy opened up again. Around the world, economies are starting to bounce back strongly from the Covid-19 crisis. Except for one: France. We learned today that the country is now officially in a double-dip recession. The explanation? That is easy. It made a complete hash of its vaccination programme. In the first-quarter of this year, revised figures showed that France’s output shrank by 0.1 per cent. That followed a 1.5 per cent contraction in the final quarter of 2020, making two consecutive quarters of falling output, the standard definition of a recession.

The EU's decision to take control of the vaccine programme was hardly a roaring success. The eurozone's economy remains stuck in recession. And the EU's foreign policy is a mess, as events in Belarus have just made clear.  Still, despite the evidence that she isn’t very good at managing anything, no one can argue that the European Union’s president Ursula von der Leyen lacks self-confidence. Last night, she made it clear there could be no possible compromise over the Northern Ireland protocol. The trouble is that she could easily bring the whole trade deal between the EU and the UK crashing down.

The vaccines are rolling out. Lockdown is easing, the EU has been forgotten about, and the Labour party has returned to its traditional pastime of plotting furiously against its leader. No one is even talking about wallpaper anymore. Things could hardly be going better for Boris Johnson, and that has been reflected in local election results and in the polls. There is one looming threat, however. The return of inflation. In truth, rising prices have been destroying governments for a hundred years, and it would be complacent to imagine this one will be the exception. President Biden has embarked on a tax, spend and borrowing spree the like of which has not been witnessed before in peacetime As figures out today make clear, prices are starting to rise again.

Farms will be devastated. The countryside will be ruined. And we will all be forced to eat weird food that will probably kill us. As the government tries to finalise a free trade deal with Australia, there are already reports of fierce rows over the future of agriculture played out against a backdrop of a angry backlash from the farming lobby.  It's time for the government so face up to these critics. True, farming is not crucial to the future of the British economy, and neither, as it happens, is trade with Australia. But the principle is important – and if the UK doesn’t embrace free trade then leaving the EU will hardly have been worth the bother.

They shift revenues around. They create endless shadowy shell companies. And they undermine the social model by dodging taxes. To the European Union, the American tech giants, when they aren’t busy destroying democracy and hollowing out local economies, are paying far too little to the state, and it is the only organisation with the muscle to start forcing them to contribute their fair share. There is one flaw in that analysis, however. Whenever the matter is put before Europe’s own courts, it keeps losing – and the Commission itself looks like an increasingly rogue organisation. Yesterday, the European General Court decided that a £215 million fine handed to Amazon in 2017 by the Competition Commissioner Margrethe Vestager was in fact illegal.

There is one thing to be said for Anneliese Dodds: as shadow chancellor, she set the bar very low. Virtually invisible, with few ideas, and a manner designed to send even political obsessives to sleep, her successor Rachel Reeves won’t have to do much to look like an immediate improvement. A wet tea towel would have more impact. And yet if Reeves wants to make a real impression, there is one move she should make, even though it would require some courage. She should focus on attacking the government from the liberal, pro-consumer right rather than the left – because that's where the space is. After a disastrous set of local elections, it is difficult to see why the hapless Dodds should be the most high-profile casualty on the Labour front bench.

She handed the vaccine procurement process over to the European Union. She didn’t invest much in new production. And she allowed an American multinational to take control of a brilliant discovery by a small German biotech company. Angela Merkel, the out-going German Chancellor, has not had much success battling the Covid-19 crisis, and her handling of vaccines has been a catastrophe from start to finish. But she has finally got one thing right: she is defending the patents that protect the pharmaceutical industry. In the last week, president Biden has signalled that the United States is ready to back suspending patents on Covid vaccines.

Okay, in fairness it might be the weather. Or the craic in the bars. Or the rugged coastline, golf courses, or the lakes. And yet for all its charms, there was always a far simpler reason why more than a thousand multinational companies have their main European headquarters in Ireland. Tax. For a generation, Ireland has had the lowest corporate tax rate - just 12.5 per cent - in the developed world. Even better, myriad breaks and allowances - in accounting circles the ‘Double Irish’ is not as you might imagine an especially stiff glass of Jameson’s but a fiendishly clever way of re-routing revenues - often take that down even further. The result?

The US is booming. The UK is set to grow at the fastest pace in half a century. China is expanding again at a blistering pace. Stock markets are rising. And commodity prices are racing ahead.  Across most of the world, economists are starting to worry about a runaway boom, stimulated by too much easy money. This, they fear, could easily run out of control. There is one exception, however: the eurozone. As of today, the zone is officially in a double-dip recession. The vaccine downturn has arrived. And while the consequences remain unpredictable, one thing is clear: they won’t be good.

Compared with the United States, the UK has so far been relatively cautious about launching stimulus programmes to kick-start the economy. And yet perhaps it doesn’t need to. People are paying off their credit cards, putting some money into the stock market, buying new houses, as well as finally booking a restaurant and getting back to the shops. A lot of money is about to be unleashed on the economy, even if this stimulus is largely invisible now. The interesting question is this: where will all the money go, and which sectors will be the big winners? It may at times seem as if Rishi Sunak is spending like crazy. By global standards, however, he is far from exceptional.