Tags: wilbur ross | greece | athens | deal

Wilbur Ross: Greece Faces 'Even Worse Austerity' Without Creditor Deal

By    |   Wednesday, 10 June 2015 01:42 PM

Investing legend Wilbur Ross keeps the faith that Greece will eventually forge a deal with its creditors and remain in the eurozone.

“A default and a removal from the euro would provoke even worse austerity than anything being proposed by the institutions,” Ross told The New York Times.

Ross, CEO of WL Ross Holdings, successfully bet on the Irish banking system when it was on the ropes. Ross is known for restructuring failed companies in industries such as steel, coal, telecommunications, foreign investment and textiles. As of June 2015, Forbes listed Ross’ net worth at $3 billion.

“But Greece may prove to be the toughest test yet of his knack for cashing in on eurozone crisis spots,” the Times reported.

Ross, who specializes in leveraged buyouts and distressed businesses, leads a group of investors who last year poured 1.3 billion euros ($1.47 billion), into Eurobank Ergasias, the third-largest bank in Greece, the Times said.

Ross believes it isn’t impossible for Greece to forge a deal with creditors “that restores the confidence of foreign investors,” the Times reported.

Greece has three weeks left to reach a deal with its creditors before its bailout program expires and it will also have to repay 1.6 billion euros ($1.81 billion) to the International Monetary Fund, the Associated Press reported.

Athens is at odds with its creditors over what reforms Greece must make in return for the bailout loans. Each side has submitted its own proposals.

Talks have been deadlocked since Greece rejected the creditors' suggestions as irrational last week, saying they would make life harder for Greeks already reeling from five years of deep spending cuts and soaring unemployment, the AP reported.

Ross explains that Athens really doesn’t have a choice. Greece could have even more of a struggle trying to go it alone with a bankrupt banking system.

“Mario Draghi, the president of the European Central Bank, has already hinted that Greece could benefit from his bank’s stimulus measures if Athens makes a deal,” the Times reported.

“If there is a negotiated settlement quickly, two things will happen,” Ross said. “I think the ECB. will be very supportive and restore liquidity to the banks. Two, it wouldn’t take very long at all for the banks and private sector to regain access to the capital markets.”

But not everyone sees the Greek drama reaching a happy ending.

A Greek exit from the euro is inevitable, Tom Hutchinson, senior editor of the Newsmax newsletter "The High Income Factor," told Newsmax TV.

“At this point, everyone knows they're going to exit, the question is when? It just becomes a matter of how long they're going to put this off, how long they're going to tango on,” he told “Newsmax Now.”

“The new Greek government has underestimated the ECB and Germany in their willingness to let them exit, so they don't have as much leverage as they thought, so negotiations are getting a little testy,” he said.

“But my guess is that they'll find a way to put off the inevitable a little bit longer,” he said.

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Investing legend Wilbur Ross keeps the faith that Greece will eventually forge a deal with its creditors and remain in the eurozone.
wilbur ross, greece, athens, deal
Wednesday, 10 June 2015 01:42 PM
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