Boy 'solves' euro problems with a pizza
An 11-year-old Dutch boy has won a prize for his radical solution to the euro’s problems – using a pizza as his inspiration.
Jurre Hermans’ entry in the €300,000 Wolfson Economics Prize, an international competition to find the “best contingency plan for a break-up of the euro” won special mention from the judging panel.
Jurre, of Breedenbroek in the Netherlands, was 10 at the time he entered. He has been given a €100 gift voucher for his efforts but unfortunately failed to make the final short list of five.
The 17-country Eurozone has been placed under considerable strain by the crippling debt problems of some of its members. Some Europe-watchers have warned that any country’s exit would destabilise the rest of Europe and plunge the region into a deep recession.
On the other side, “eurosceptics” argue that the currency union’s problems are so great that an orderly break-up with countries going back to their old currencies, such as the Greek drachma and Italian lira, is the best answer.
The prize has been sponsored by a family charity trust of Lord Simon Wolfson - a member of the Conservative Party – and is being run by the think tank Policy Exchange. The competition attracted 425 entries.
“Sadly, the risk of a country leaving the eurozone has not gone away,” Lord Wolfson said at the announcement of the shortlist. “The ideas contained in these entries are an invaluable contribution to tackling this important issue.”
Jurre’s suggestion was that Greeks be given drachmas in exchange for their euros and that anyone moving euros out of Greece should be penalised.
“All Greek people should bring their euro to the bank,” he wrote, including a diagram of his plan. “They put it in an exchange machine .... You see, the Greek guy does not look happy!!
“The Greek man gets back Greek drachmae from the bank, their old currency. The bank gives all these euros to the Greek government.
“All these euros together form a pancake or a pizza. Now the Greek government can start to pay back all their debts, everyone who has a debt gets a slice of the pizza. You see that all these euros in the pizzas go the companies and banks who have given loans in Greece.”
The prize’s five shortlisted finalists, who will each receive €12,000 to continue their work ahead of the prize’s award on July 5, and their proposals are:
- Robert Bootle and his team of Capital Economics in London: A country leaving the euro would convert its government and consumer debt into its own currency - such as the Greek drachma. The country would then deliberately default to bring its debt levels down to 60% of its economic output.
- Catherine Dobbs, a British private investor: The process which created the euro would basically be reversed. All claims in the exiting country would be replaced by claims in the new currency.
- Jens Nordvig and Nick Firoozy of Nomura Securities in London: If a country quits the euro, British law would not recognise debt contracts in the country’s new currency. A new way of handling and dealing in these debt contracts would have to be introduced.
- Neil Record of Record Currency Management: Record contends that if one country leaves the euro, the currency has to be dissolved. He thus argues for maintaining secrecy for as long as possible before announcing a break-up plan, to prevent markets from attacking structural weaknesses in other countries.
- Jonathan Tepper of North Carolina-based Variant Perception: Many currency unions have failed in the past and a euro break-up is not especially challenging. Using past examples as a guide, countries should exit by surprise over a weekend, declare an extra bank holiday or two around the date of the exit and stamp the existing currency until new notes are circulated.
