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A CONSERVATIVE PEER and the chief executive of the retail chain Next wants to give you a €300,000 prize. And there’s an apparently simple way to win it: can you figure out how best to let a country leave the euro?
Simon Wolfson has donated £250,000 to the ‘Wolfson Economics Prize’, being run by the not-for-profit London-based Policy Exchange.
Its quandry is relatively simple: it simply asks for submissions on how to manage the orderly exit of one, or more, member states from the European Monetary Union.
One of the major stumbling blocks faced by the single currency, in the midst of the ongoing European debt crisis, is how to leave it – a circumstance never imagined when it was being first conceived.
Though the 1992 Maastricht Treaty outlined specific criteria that countries had to meet if they wanted to join the euro, it never outlined how a country could leave it – meaning there is no ‘formula’ for states to follow if they want to revert back to their old currencies.
Wolfson’s challenge is to come up with a system that allows for countries to leave the currency in an orderly way, with the minimal impact and disruption either to their own countries or to the others left in the Euro.
The project is targeted at top academics and economists from around the world, but is open to entry by anyone who is interested – and with a prize of £250,000, it could well attract significant worldwide interest.
“There is now a real possibility that political or economic pressure may force one or more states to leave the euro. If this process is mismanaged it could threaten European savings, employment and the stability of the international banking system,” Wolfson said.
This prize aims to ensure that high quality economic thought is given to how the euro might be restructured into more stable currencies.
The winning submission will be asked to consider what a post-euro Eurozone would be like, how to manage the transition between the current situation and live after the euro, and how employment, savings and debts would be treated.
The one-off prize is will be the world’s second-biggest economics cash prize in 2012, second only to the Nobel Prize. The deadline for submissions is January 31.
Entry criteria can be found at the Policy Exchange website.
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Much and all as the euro is suspect …. when Conservative peers are trumpeting its demise, it makes me wonder whether it’s all bad.
good bit of publicty for his company….
RUN!
(wheres my prize?)
All Noonan has to say is “Thanks very much, we had a good run, I’ll get me coat”
“Dear Mr. Europe,
We have had a good run. We have laughed, cried and worked together for many years but we have grown apart in recent times. The Lisbon Treaty is when the gaps in our relationships became obvious and with the auld downturn things have just gotten worse. The greatest gift of etiquette is knowing the right time to leave a party; not too early for fear of being rude and not too late for fear of being asked to leave. Like Goldilocks now is just right. T’ra. Hope everything works out.
Love
Enda”
It’s nice to read the armchair economist’s comments on the Journal. They weren’t complaining during the good time & now they want to walk away when things get a little tough.
Hi Patrick ,
As indeed my comment was more to have a laugh than thinking it would realistically solve the issues faced , I think as the world seems to be in per-ma crisis we cant forget to have a laugh. I would like to see how you can view the “Good times” If this was the case than there would not be huge credit issues as people would have paid for items with cold hard currency , in my humble opinion it seems more like a credit feast that went pair shape –
I agree it is easier to say ah well and walk away , however I think it is not a case of if the euro fails it is more likely when , and to have some contingency plans in place for ever eventuality is better that scratching heads when it happens.
back to the arm chair and gin hiccup :)
Maybe if we were asked about the euro currency before we were coerced into it, were you asked?….anyone asked?
NOPE.
To quote Blackadder 3…
“I always say, “If you can’t laugh, what *can* you do?” Ha-ha-ha-ha”
“…Take up politics, perhaps.”
Gallows humour. Usually great for a laugh.
@Dermot: The Maastricht Treaty (which we approved by referendum) laid out the target of monetary union, the criteria for joining and the commitment towards the project. It was highlighted in the Werner plan, the Delors report and was made very public during the Maastricht referendum. The UK negotiated an optout on EMU. We were, of course, apparently far more concerned with ensuring that abortion wasn’t introduced here. We had the option to say no as we were in fact asked. You mightn’t like the answer, or indeed the question, but the question was posed.
I don’t think I was old enough to vote on it Seamus…:P
Next Getting countries out of the Euro my Arse!!!
They can well afford to put up €300k!!
They’ve been charging us twice their U.K prices, in their Irish shops for long enough!!!
He’s actually copying someone else. This is not a totally original idea. There was an article in the FT 2 weeks ago about a wealthy Euro sceptic offering mad money for anyone who could solve the euro crisis.
Lisa – you might be thinking of the same guy. The prize was announced in October but only opened for entrants/registration this week. http://www.ft.com/intl/cms/s/0/16d19598-fb2f-11e0-8756-00144feab49a.html#axzz1dsdtelDs
Yep, it is the same guy after all Gavan. Good work!
Title here was slightly misleading though.
http://en.wikipedia.org/wiki/KerPlunk_(game) imagine there was 27 sticks and you had to pull them out without the other marbles falling out :) Solved ,well just have to figure out how to pull out the sticks :)
Nuke the site from orbit. it is the only way to be sure.
Just walk away….file for divorce,run anything but the euro….
‘Its nor you Euro, its me, i need to be on my own for a while to figure out what i want from this relationship. I feel a bit suffocated and cant think clearly. I dont know if i want the commitment. I think i might like to play the field for a while, sterling punt. I need space from you,
Has anyone thought about what may happen with all the MNCs we rely on for jobs here if we leave the Euro?
It varies case by case. Companies with a lot of investment here could lose out as their assets would be worth less. Companies exporting from Ireland would have a bonanza with lower costs to produce goods that yield the same prices overseas. However, day 1 losses would be a sunk cost so the ongoing improvement in competitiveness could actually bring more jobs to Ireland.
The only downside is that being in the euro reduces the volatility of earnings by taking away the fx risk. Most companies will be happy to live without the euro for lower costs, a few won’t.
A bigger issue is that it only makes sense to leave the euro if this is accompanied by a default on government debt. A government that breaks its promise to investors can scare away multinationals through uncertainty on the future. A default one day, a rise in corporation tax the next?
Grow a pair,and walk.
If he offered Sterling I’d tell him but what good is offering Euros if we leave the the Euro
The answer in a word, as far as the Conservatives go, is:
“Quickly”
It’s a bit rich coming from them anyway, as Britain isn’t a fully participating member of the EU and isn’t in the Euro. No wonder the Aussies call them “Whingeing Poms”.
Next never have my sizes, sort that out your Lordship!
Very simple; Offer your citizens the chance of a referendum; Germany will make you leave if you!!!! Just like Papandreou tried to do in Greece re: their bailout and Germany & France stipulated that it had to be “Do you want to leave the Eu?”
If there was a referendum on the Euro in countries over the last 5 years, at least half of them would have voted to leave. The EU doesn’t do democracy, so we’l just have to muddle along and see how Brussels can roll over nearly 3/4′s of a trillion euro’s in debt over the next 12 months. The people who lend money don’t believe it can be done, but then again they are just Euroskeptics.
I can guarantee that people who are so adamant about the survival of the Euro are the same people who were blathering about house prices.
Nope. I’ve been renting for 10 years whilst waiting for the housing bubble to burst, but I think the euro will survive.
Even now it was a dumb move, I missed so much of the genuine boom!
I think that was a great idea Sheila. Can’t beat a bit of democracy.
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