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Venture capital on a visit to Athens

30 January 2016 / 19:01:13  GRReporter
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The meeting of Prime Minister Alexis Tsipras with representatives of foreign investors went down in a positive climate. According to reports, Tsipras was in a friendly mood; he underlined the determination of the government to carry out the necessary structural reforms in privatisation and to create an environment conducive to investment. On their behalf, investors have expressed optimism about the possibilities and prospects of the Greek economy as well as their concern as to whether the country will meet its European commitments.

The priorities

The prime minister's meeting with representatives of 10 investment funds was also attended by Deputy Prime Minister Yannis Dragasakis and Finance Minister Efklidis Tsakalotos. Progress on the first bailout assessment, the growth plan, as well as the government initiatives aimed at creating a favourable investment climate were among the discussed topics. Among the investors work top guns like Prem Watsa (Fairfax Financial Holdings Ltd), John Paulson (Paulson & Co), Steven Johnson (Wilbur Ross & Co), Jonathan Haick (Brookfield Capital Partners Ltd), Samir Parekh (Capital Research & Management Company), Ben Watsa (Lissom Investments), Lawrence Chin (Mackenzie Cundill), Jamie Lowry (Schroder's Investment Management), Daniel Pozen (Wellington Management Company), as well as Nikolaos Karamouzis and Fokion Karavias (Eurobank). As is known, the prime minister has informed investors about government positions and initiatives regarding the building up of a stable tax system, fighting bureaucracy and corruption, and enhancing investment opportunities through political stability.


Steven Johnson, John Paulson, Prem Watsa

According to Kathimerini sources, investors have noted that the completion of the bailout evaluation will radically change the conditions – therefore time is a key factor. The sooner the assessment is made, the faster the economy will recover. Investors have also raised the issue of reforms, and the PM has put across his belief that the government will be resolute and successful in their implementation. According to Tsipras, the assessment will be completed by late March.

Right after the meeting, Fairfax's Prem Watsa said: "We had a very useful discussion with Prime Minister Tsipras, which was focused on the Greek economy and the challenges it faces. We expressed our optimism about the long-term role of Greece in the Eurozone, and reaffirmed our support for the country's prospects, as long as the necessary reforms are implemented."

Investors also met with the Bank of Greece Governor, Yannis Stournaras, and the director of the Privatization Agency, Stergios Pitsiorlas.

The issues

Despite the optimism, many investors are worried about the government decisions that stymied the dynamics of the economy in 2015 and led to the third bank recapitalization over a period of three years. They are also concerned by the delays in applying the bailout measures. The majority of investors are optimistic about the Greek economy. They have emphasised, that once released from the shackles of political uncertainty, it stands a good chance of a quick return to positive development. According to them, if it wasn't for the shock of several months of negotiations in 2015 and the imposition of capital controls, the economy would have had a growth of at least 3% in 2015. If stability is achieved, say investors, and political bottlenecks overcome, the Greek economy will take the upward path. What are the political problems? The first is the fastest possible completion of the rescue package review and the implementation of the reforms agreed with partners. The second is addressing the refugee issues, which have the potential of unleashing dangerous complications.

John Paulson, who controls 6.6% of Piraeus Bank, reportedly met with Alpha Bank's CEO Demetrios Mantzounis and other bank representatives, as well as with Michalis Sallas, President of Piraeus Bank. Paulson is known as someone who closely monitors the development of the companies in which he invests. He reacted sharply to the decision taken by the management of the metropolitan water and sanitation company to contribute €20 million to Attiki Bank's equity. He also responded to the recent management reshuffle in Piraeus Bank.

For his part, Watsa met with the managements of Εurobank and Eurolife, which are among Fairfax's recent acquisitions.

Tags: investors Alexis Tsipras Prem Watsa John Paulson
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