How the EU could spend its Nobel Peace Prize winnings

The European Union would need to win the Nobel Peace Prize for 541,495 years in a row in order to finance its flagship bailout fund with the prize money.

The 27-nation bloc was the unlikely recipient on Friday of the annual gong and the Nkr8m, or €923,368, prize.

The Norwegian Nobel Committee, which awards the prize, picked the EU and its forerunners for having “over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe.”

However, the prize money is a small drop in the ocean when compared to the EU’s €500bn European Stability Mechanism bailout fund.

Alternatively, the EU could put the money towards a potential Spanish bailout. The country is said to be close to calling on Brussels for help, after Standard & Poor's downgraded its credit rating to one level above junk status on Wednesday.

Another option could be to split the money between the roughly 500m citizens of the EU, giving each individual a 0.001 euro cents share of the winnings.

Some commentators reacted with surprise to the award announcement on Friday morning.

Terry Smith, chief executive of broker Tullet Prebon, wrote in a blog entitled ‘EU awarded Nobel Peace Prize’: “Sadly I have not made that headline up. The EU has indeed been awarded the Nobel Peace Prize. I had thought it wasn’t possible to devalue this ‘Prize’ any further than is had been by the award to Barack Obama, but I was wrong.”

Meanwhile, Philip Shaw, chief economist at Investec, joked: “You’d really want EU to be in position to get the Nobel Prize for Economics rather than the Peace Prize.”

He added: “While I’m sure it’s nice to have the prize money, I’m sure it wouldn’t go very far.”

Bookmaker Paddy Power only had one bet placed on the EU to win the prize, with odds of 40/1 offered to a punter who placed a €10 stake. The favourites with the bookmaker had been US academic Gene Sharp at 6/4 and Afghan politician Sima Samar at 5/2.

As unlikely a winner as the EU might seem, the award of the gong to a large international organisation is not unprecedented.

The Institute of International Law became the first organisation to win the prize in 1904, while other organisations including the International Committee of the Red Cross and the United Nations have also won the award.

President of the European Commission José Manuel Barroso, who accepted the award on behalf of the EU, also expressed his surprise at winning the award: “I have to say that when I woke up this morning, I did not expect it to be such a good day.”

He added: “The award today by the Nobel Committee shows that in these difficult times the European Union remains an inspiration for countries and people all over the world and that the international community needs a strong European Union.”