Winner announced
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A team from Capital Economics led by Roger Bootle has this morning been announced the winner of the £250,000 Wolfson Economics Prize. The winning entry outlines the smoothest process by which a member state could exit the Eurozone.
It concludes that even though there would be some losers as well as winners from the exit of one or more members from the Euro, the net effect overall would be distinctly positive for the future growth and prosperity of the current membership – and for the wider world.
The team’s submission, Leaving the euro: A practical guide, centres on the departure of a single weak member such as Greece. It suggests that:-
- A new currency is introduced at parity with the Euro on day 1 of an exit.
- All wages, prices, loans and deposits are redenominated into it 1 for 1.
- Euro notes and coins would remain in use for small transactions for up to six months.
- The exiting country would immediately announce a regime of inflation targeting, adopt a set of tough fiscal rules, monitored by a body of independent experts, outlaw wage indexation, and announce the issue of inflation-linked government bonds.
It also recommends that government should redenominate its debt in the new national currency and make clear its intention to renegotiate the terms of this debt. This is likely to involve substantial default – perhaps sufficient to reduce the ratio of debt to GDP to 60%.
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The paper proposes that key officials from the exiting country meet in secret one month before publicly announcing a day of exit or ‘D Day’. Eurozone partners and other international monetary organisations would be notified of D Day three days before – preferably on a Friday – when a public announcement is made that the changeover to the new currency will take place at the start of the following week. Immediately after this announcement, domestic banks and financial markets should be closed to prevent capital flight.
The government of the exiting country and the institutions of the EU should seek to minimise uncertainty over the legal issues, for example by providing guidance on the validity of redenomination, the status of the exiting country with the EU, and the continuity of the Euro itself.
The judges unanimously viewed Capital Economics’ submission as the most credible solution to the question of how an orderly exit from the Eurozone by one or more of its member states could be managed.
Commenting on his win Roger Bootle, Managing Director of Capital Economics, said:
“I am absolutely delighted to win the Wolfson Prize. It has been a team effort and I would like to pay tribute to my colleagues at Capital Economics who collaborated with me.
“Our suggested exit path from the Euro involves the overnight introduction of a national currency, with monetary amounts converted at 1 for 1, while the currency is allowed to fall well below this on the exchanges. Until new notes become available, non-cash means of payment and Euro cash are used.
“People may disagree on whether leaving the Euro is a good thing, but the contribution of the Wolfson Prize has been to demonstrate that it can be done.”
To read the press release in full please select your language: 
Roger Bootle video interviews
Prize awarding ceremony
Runner-up submissions
See below for copies of the essays submitted by the four runners-up.
- Catherine Dobbs - The NEWNEY approach to unscrambling the Euro
- Jens Nordvig and Dr Nick Firoozye - Rethinking the European monetary union
- Neil Record - Minimising the financial cost, and maximising the economic opportunities, of Euro Exit
- Jonathan Tepper - A Primer on the Euro Breakup: Depart, Default, and Devalue as the Optimal Solution
Prize date announced
A press conference will be held to announce the winner at 9:00 (BST) on 5th July 2012 at Policy Exchange, in London.
All five finalists will be battling it out to win the prize: Catherine Dobbs, Roger Bootle and the team from Capital Economics, Jens Nordvig and Dr. Nick Firoozye, Neil Record, and Jonathan Tepper have confirmed that they will be continuing to the next round of the competition.
The finalists have received feedback from the judge and have until midnight on the 5th of June to refine and resubmit their entries.
Read more in the full press release
Finalists Announced
The Wolfson Economics Prize, which challenges the world’s brightest economists to prepare a contingency plan for a break-up of the Eurozone, today (3rd April, 2012) unveiled a shortlist of five finalists.
The shortlisted entries, though all very different from each other, provide valuable ideas about how best to manage a member state leaving the euro.
The judges have given the finalists the opportunity to address key questions about their entry. Finalists will be given until the 29th of May to develop and resubmit their entries. Everyone who has progressed to this stage will be guaranteed a £10,000 share of the prize. The winner(s) of the Wolfson Economics Prize will be announced on the 5th of July.
The finalists' essays can be seen below. To read the full press release for the announcement of the finalists please select your language:
The Shortlist
Introduction from Lord Wolfson
a) Catherine Dobbs - The NEWNEY approach to unscrambling the
Euro ***No video available***
b) Roger Bootle - Leaving the euro: A practical guide
c) Jonathan Tepper - A Primer on the Euro Breakup: Default, Exit and Devaluation as the Optimal Solution
d) Jens Nordvig - Planning for an orderly break-up of the European Monetary Union
Additional entries of interest
In addition to the shortlist, the judges have decided to publish papers which they thought were of interest. Those of note, who will each receive a £1,000 prize, are:
Arnab Das - A How-To Manual for an Amicable EZ Divorce
Charles Dumas - Untitled
Julian Le Grand - QIR and EMU: A Proposal for Managing a Member State’s Departure from the European Monetary Union
Michael Redican - Untitled
Youngest entrant
An eleven year old boy from the Netherlands has received a special mention from the judging panel of the Wolfson Economics Prize for his application to the prize.
Jurre Hermans, a school boy from Breedenbroek in Gelderland Achterhoek, was the youngest entrant to the Wolfson Economics Prize. He decided to enter the prize after watching Jeugdjournaal, and because of his concern about the Eurozone crisis. Jurre’s paper, complete with diagram, proposes that Greece should leave the euro. Greek citizens would exchange their euros for drachmas and anyone caught moving euros abroad would be penalised financially.
He will receive an €100 gift voucher for his efforts.
You can read Jurre's entry here. To see the full press release on Jurre's entry, please select your language: 
Judging panel
The judges are:
- Mr Derek Scott (UK) – former Economics Adviser to British Prime Minister Tony Blair and Chairman of the Wolfson Economics Prize
- Prof. Dr. Manfred Neumann (Germany) – Emeritus Professor of Economics at the University of Bonn and former adviser to the German Bundesbank and the Academic Advisory Council of Germany’s Federal Ministry of Economics and Technology
- Prof. Charles Goodhart CBE FBA (UK) – Emeritus Professor of Banking and Finance with the Financial Markets Group at the London School of Economics and former member of the Bank of England’s Monetary Policy Committee
- Prof. Jean-Jacques Rosa (France) – Emeritus Professor of Economics and Finance at the University Sciences Po, Paris, and former member of French Prime Minister Lionel Jospin’s Conseil d’Analyse Économique
- Prof. Francesco Giavazzi (Italy) – Professor of Economics at Bocconi University, Milan, and former economics adviser to the President of the EU Commission, the Italian Prime Minister and member of the External Evaluation Committee of the Research Activities at the International Monetary Fund.
Further details and comments from the judging panel can be found in the following press release:
About the Wolfson Economics Prize
The Wolfson Economics Prize will be awarded to the person who is able to articulate how best to manage the orderly exit of one of more member states from the European Monetary Union.
There is now a real possibility that political or economic pressure may force one or more states to leave the Euro. If the process is managed badly it would threaten European savings, employment and the stability of the international banking system. The Wolfson Economics Prize aims to ensure that high quality economic thought is given to how the Euro might be restructured into more stable currencies.
The Wolfson Economics Prize, worth £250,000 (€286,000), is the second biggest cash prize to be awarded to an academic after the Nobel Prize. Deadline for submissions will be January 31st 2012.
For further information or to make a submission please email
The original press release announcing the prize can be downloaded here:
Information pack for applicants
Details of the entry requirements and prize rules can can be downloaded in the following languages:
Q&A Webinar
Q&A Event
A copy of the slides displayed during the event can be found here. Pictures of the event can be found on Policy Exchange's Flickr page.