Boy, 11, wins prize for plan to handle break-up of euro

An 11-year-old’s plan to solve one of the key questions at the centre of the European crisis — how to get countries to leave the euro — features unhappy Greeks and pizza.

Dutch schoolboy Jurre Hermans, 11, displays an uncanny grasp of a key issue at the centre of the eurozone crisis in his response to the €250,000 prize offered by Lord Wolfsom to anyone who can answer the question: “If member states leave the Economic and Monetary Union, what is the best way for the economic process to be managed to provide the soundest foundation for the future growth and prosperity of the current membership?”

Hermans tackled the issue of how to incentivise Greeks to return to the drachma and avoid a mass hoarding of euro within the Hellenic state. He suggests any Greeks caught hiding euros should be penalised with a severe fine calculated at twice the value of the euro that Greek hoarders are refusing to exchange.

The euro returned by the unhappy Greeks would then be divided up, like a pizza, amongst Greece’s creditors explained Jurre by way of a diagram.

For his first foray into the world of economics he received a special mention from the judges of the Wolfson prize and a €100 voucher to spend on the dutch shopping website bol.com.

The judges reviewed more than 400 entries and drew up a shortlist of five finalists, who have until May 29 to refine their proposals and the winner will be announced on July 5.

The contest is being managed by Policy Exchange, an independent London-based think-tank.

London consultancy Capital Economics’ entry focuses on how to achieve a fall in real wages and prices with the minimum disruption.

Catherine Dobbs, a former quantitative researcher in the City, proposes reversing the process by which the euro was created.

Nomura economists Jens Nordvig and Nick Firoozye tackle how to deal with some €10trn in outstanding foreign-law debt contracts, which they propose redenominating into a second European Currency Unit.

Neil Record, of the eponymous currency management firm, stresses the need for secrecy and sets out a detailed week-by-week timetable.

Hedge fund manager Jonathan Tepper contends the break-up of the euro would not be particularly challenging. Currency exits and devaluation rarely lead to the feared Armageddon.