International investor Wilbur Ross, who has a major investment Greece's third-largest bank, has no fear that the Greek reforms-for-bailout deal reached Monday will eventually be implemented.
Greece reached a preliminary deal Monday for a third multi-billion euro bailout from its fellow members in the 19-country eurozone. The deal includes tough economic measures that Greece will need to pass into law quickly before it can get any new loans, the AP reported.
Among the terms of the tentative agreement is a $55 billion fund that will be set up using Greek government assets for privatization.
"The privatizations really will go forward," Ross told CNBC.
"Transferring those activities which are highly unionized [and] highly left-wing out of the direct control of the government ... that's a huge, big deal," the distressed asset investor said.
“The second thing that is a big deal is extra capital, extra cash for growth. That wasn't part of any of the prior discussions and I think that's important, to moderate the amount of economic hit that will otherwise come from the austerity,” he said
“I think both the Germans feel they didn't get a good deal and the Greeks feel they didn't get a good deal,” the chairman and CEO of WL Ross & Co. said. “And usually, that's the sign that it is a fair deal.”
Ross and other international financiers have put $1.8 billion into Eurobank, becoming the biggest shareholder of the Greek institution.
Ross said the real goal of the deal will be much-needed societal and economic change in Greece.
"That's what's coming as part of this package. They are not calling it that, but that's what it is," he said.
“I think there will be a change in the political situation in Greece. The chairperson of the parliament is a hard-line person totally opposed to the deal. I don't see that person continuing in power very long," he said.
"And I think there will undoubtedly be some changes in the cabinet as well and those are much more likely to be pro these various decisions that were enacted over the weekend than opposed to it. So, I think it not only will be enacted, I think it will be implemented,” he said.
Ross sees little wrong with the deal.
"I totally disagree with the notion that there's anything here that will encourage bad behavior on the part of the other weaker countries," Ross added.
But other economic experts don’t see the tentative deal surviving.
Newsmax Finance Insider Peter Morici, an economist and business professor at the University of Maryland, says the Greek Parliament should reject the deal, dump the euro and reintroduce the drachma.
“What Eurozone leaders — and in particular German Finance Minister Wolfgang Schauble who was most insistent on harsh terms — don’t get or refuse to admit is that for Greece and other troubled Mediterranean countries, austerity and marketplace reforms can’t guarantee economic recovery until Germany and its northern neighbors change their economic policies too,” Morici wrote.
“No amount of austerity and one-sided market reforms imposed by Schauble and his friends can change that … and sooner or later either Mediterranean governments or their banks must fail.”
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