In an interview for Bloomberg, American billionaire investor Wilbur Ross commented that the European Central Bank’s estimation of the capital needs in Greece “is too conservative”, which may result in an unnecessary burden for taxpayers.
The US investor explained that “the real issue is the real probability that the baseline scenario being used is too pessimistic and therefore the stress case is totally off the chart” and warned that few international investors are willing to commit money to Greece.
According to the 77-year-old investor, who made his fortune betting on distressed assets, if those investors feel that they are being treated “unfairly by a rash rush to decision and therefore unnecessarily diluted, they won’t come back”.
Furthermore, the billionaire investor argued that the 25 billion euros earmarked for the recapitalization of the banks must become an unconditional commitment for three years “and let the ECB feed it into the banks, if and as when, it sees an individual bank needing capital”.
To this end, Ross cited the cases of Ireland, Cyprus and Spain, where the capital needs where “exaggerated”. Given the “surprising” nature of the Greek economy, official forecasts in the assessment of Greek bands could turnout to be too negative.
When asked about the upcoming elections in Greece, Ross estimated that the winner “will be a more centrist and more stable government than the country has had before which is important as it was the previous government that created the liquidity problem for the banks”.
