A British CEO will give £250,000 (roughly $400,000) to the person who comes up with the best plan for one or more countries to leave the euro.
That’s a lot of money — the second biggest economics prize after the Nobel, according to the think tank that’s administering the award.
Then again, figuring out how a country could exit the euro without unleashing economic havoc on the world may be nearly as hard as winning a Nobel.
For most of the brief life of the euro, nobody gave any thought to how a country might leave. Even today, European leaders still rule out the possibility.
But what if?
What if Greece, say, wanted to go back to the drachma, so it could devalue the currency and make its exports more competitive?
In the absence of an orderly plan, it could get very ugly, as we heard in our podcast Europe’s Worst-Case Scenario — bank runs, political riots, financial disaster.
If you want to enter the contest, you’ll have to explain what to do about everything from private savings accounts to sovereign debt to the stability of the banking system.
The prize is funded by Lord Wolfson (Full name: Lord Wolfson of Aspley Guise), CEO of the British clothing store Next.
The FT addresses an issue that crossed my mind:
Lord Wolfson admitted the prize – coming from a non-eurozone country and soliciting ways to break up the currency bloc – could be received badly in Europe. But he insisted he wanted the euro to continue.
On that note, here’s Lord Wolfson speaking to us through the official announcement announcing the prize:
I, along with most European businessmen, hope that the Eurozone will stabilise, but in the event it does not Europe must not sleepwalk into a policy vacuum. This prize aims to incentivise the world’s brightest economic minds to help fill that policy void: their endeavours may well prevent Europe from descending into a financial chaos that would destroy savings, jobs, and social cohesion.
The entry deadline is Jan. 31, 2012. Good luck!
lord wolfson? is he great great grandson of fucking beowulf? cant beat the british at being the ultimate assholes. witty tho.
this obviously reveals how big a problem we have on our hands
Truly, no one really knows how to break away from the Euro without causing serious pain and civil strife. There are instances of this type of thing happening in the past, and they have been ugly.
Wood they need to re-issue the debt out for 100 years while printing individual country currency until they can stand on their own two feet.
Long term economic growth convinces investors to buy a countries debt as they assume they will be paid by tax collection.
So re issue debt and invest in the countries future through business incentives and better education while at the same time enacting meaningful spending cuts.