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article imageVideo interview: Wolfson Economics Prize — Euro exit plan

By Anne Sewell     Jul 21, 2012 in World
London - Lord Simon Wolfson is a multi-millionaire and CEO of the Next fashion chain. He came up with a competition - the 'Wolfson Economics Prize' - for the best way to exit the euro.
Lord Simon Wolfson says that leaving the Eurozone could be done over a weekend. He also says that a bank holiday is all that is needed to convert all assets into a new currency.
This may become the dawn of a new economic era for those who dare to abandon the euro. ­ He theorizes that a country that dares to leave the eurozone would immediately have an enormous competitive boost, sharp decrease in unemployment rates and a general kick-start to the economy.
RT's Laura Smith interviews Wolfson in the above video.
Wolfson sponsored a prize for the least disruptive way to exit the Eurozone. When asked why he sponsored the prize, Wolfson says that there is an enormous intellectual vacuum. He says that nine months ago, people were not talking about this.
He says, "The euro was designed with all lines of retreat cut off, and it looks increasingly unstable."
"The one thing you can be sure of, if it does break up, we need a plan."
"What this prize has done is it has taken a subject that was taboo, it was a forbidden subject, and it has now brought it into mainstream debate. More than that, it has produced a fantastic finalist, who has actually come up with a very credible answer."
Smith asks Wolfson why the "Capitalist Economics Plan" is so much better than anyone else's plan.
Wolfson says, "I think it was because it is so comprehensive. It was very clear, it was well argued. It wasn't unreasonable in its expectations of what institutions would have to do. It was clear about where the pain would be, and where the gain would be. It set a path that would allow any policymaker in any part of Europe to sit down, read that, and it would be their primer. That would be the first thing that they should read."
Smith asks Wolfson to summarize the plan.
Wolfson says, "The proposed timetable is, one weekend, the banks are closed. A bank holiday is declared on the Monday, and over that weekend, in the exiting country, all assets, liabilities, wages, prices are converted into the new currency in that country."
"So, you may have been earning 30,000 euros one day, the next week you are earning 30,000 new Drachma."
"That currency is then floated on the free markets and the value of that currency would then drop dramatically."
He then explains that while that sounds like a problem, it is actually the start of the solution.
The full interview can be heard in the above video and the full transcript can be read here.
More about Lord Simon Wolfson, wolfson economics prize, euro exit plan, Next, Economics
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