g7 peaks nowadays are mostly fields of cloth of gold. They are about to show up, with Boris Johnson in full Henry VIII platform. He threw beach parties, rented cruise ships, dug up trees, summoned members of the royal family and organized the worship of David Attenborough. The planet has been saved, the world cleansed and the poor vaccinated. Johnson spent £ 70million on police services for a three-day event.
Most importantly, the G7 hate any argument that ruins the show. Johnson managed to sterilize US President Joe Biden over the Northern Ireland protocol, deftly rolling out tea with the Queen. He failed on the same subject with the French Emmanuel Macron. With his signature banality, he assimilated the annoyed protocol to Macron preventing a Toulouse sausage from reaching Paris.
When Macron pointed out that France was one country, Johnson blew up that the UK was also one country and fell straight into the trap. He had just spent the last year of lockdown bragging about his good relations with the UK’s ‘three other nations’, including one abroad. Meanwhile, he’s struggling to keep Scotland on board and has signed the protocol now holding Northern Ireland in the EU’s single market. Johnson had always been adamant that Brexit meant leaving him. It was game, set and match for Macron.
Most extraordinary is Johnson’s failure to brag about what is expected to be this year’s G7 major achievement. She spoke at the preliminary meeting of finance ministers on June 5. These meetings were the true origin of the G7 in the 1970s, before the rally was hijacked by selfish prime ministers and presidents. The agreement sought to demand a basic global tax of 15% on “stateless” multinational corporations, especially those in major global technologies. British Chancellor Rishi Sunak rightly called the deal “earthquake”.
These companies are estimated to have parked offshore profits of around $ 6 billion (£ 4.25 billion). Perhaps as much as $ 240 billion (£ 170 billion) a year in unpaid money market taxes, on top of the billions held by wealthy individuals. The agreement has nothing to do with fiscal sovereignty. It would be a voluntary agreement to treat wealth fairly. Some 40% of this tax revenue could go to less well-off countries.
Colossal work remains to be done, identifying the flaws and securing local agreements. But The Economist magazine predicts the start of a process that could eventually render the Caribbean and other tax havens obsolete, and not sooner. It is also a step towards the regulation of digital businesses, now bigger, more intrusive, more powerful and therefore more dangerous than any others in history.
A time of global disruption is when nations tend to be open to collaboration. The aftermath of the Second World War saw the creation of the IMF, the Marshall Plan and the United Nations. The financial crash of 2008 led to an increase in credit cooperation. Right now, a revived Washington is ready for reform. A process that began at the 2021 G7 is underway, a process that could be a huge step forward for global equity. Funny that nobody talks about it. No photos of Johnson maybe. Or was it because his potential rival Sunak called him seismic?