SO – WE ALL JUST got a little bit richer. (No, really: only a little bit.)
The European Union’s surprise victory of the 2012 Nobel Prize for Peace – announced in Oslo this morning – also means a cash prize that might make a small contribution in solving the continental debt crisis.
It really only will be a small contribution though: this year, due to the general tightening of belts around the continent, the prize money for Nobel winners has been cut. Previously there was a bounty 0f 10 million Swedish kronor for every prize: this year that’s been cut to 8 million.
That, according to today’s exchange rate, is €923,368. If you want to say that in another way, that’s €0.00178 for every man, woman and child living in the 27-member European Union.
Yep: that’s 0.178 cent per person.
The smallest euro coin is a 1c piece – so even if Messrs Barroso, Van Rompuy and Schulz agreed to send the money directly to member states for distribution among the population, you wouldn’t be able to hold your winnings.
Right now, interest rates are relatively low. AIB will give you 3 per cent interest on deposits. If that rate stayed the same forever, it would take 59 years before your winnings would reach the magical one cent amount.
Of course, with inflation as it is, the chances are that the 1c coin won’t be in circulation in 2071 – in fact, with Finland and the Netherlands already effectively scrapping the 1c and 2c coin, even the 5c piece might be gone by then.
So if we were to assume that the 10 cent coin is likely to survive a currency cull, we would need our winnings to reach 10 cent before we could actually hold it. At current interest rates, it would take 137 years to increase in value by that much.
Even then, there’s no way of being sure that we’ll still have a 10 coin (or even a euro currency, eh?) by the year 2149.
So – if you really want to hold your Nobel prize? Ask for it to be distributed in Iranian rial*, the value of which is diminishing rapidly this month. If you’re okay with seeing your winnings devalue literally before your eyes, withdraw them in Tehran.
Today, €1 is worth 15,835 rial – meaning your winnings worth 28.18 rial. The smallest coin in Iranian currency is a 50 rial piece, so it’s still not enough, but if you put it in a bank in Iran you can get a short-term interest rate of 12.5 per cent.
At that rate, your fortune will have grown to 50 rial in five years’ time – enough for you to actually hold.
Don’t spend it all in one place…
* We should point out that under Irish law it is illegal to transfer funds between accounts in Ireland and Iran.