Billionaire investor John Paulson, the president and portfolio manager της Paulson & Co, appears particularly “bullish” over the Greek economy’s prospects, speaking during an interview for the Sunday edition of “To Vima”, where he maintains that as long as the pro-growth policies of the Mitsotakis government continue then the Greek economy will have a favorable future.
At present, the Greek economy is one of the fastest growing in Europe, in tandem with the official unemployment rate now falling below 10%.
Paulson also noted that the banking sector in Greece is on extremely solid foundations, while adding that he sees significant room for improvement in valuations. This assessment extends to other listed Greek companies, he said, in comments that coincided with last Monday’s 26th Annual Capital Link Invest in Greece Forum, entitled “Greece – Speeding Ahead Post Investment Upgrade”.
The event witnessed participation by leading US and international investors, executives from international and Greek companies, banks and other financial institutions, senior government officials and executives from 23 listed companies.
Paulson, who is based in New York and has a fortune of US$3.8 billion according to Forbes, has been mentioned for the next US Treasury Secretary in Donald Trump’s administration. He introduced the Governor of the Bank of Greece, Yannis Stournaras, for the latter’s keynote address.
To Vima: The world seems to be in a transitional period in which the spectrum of protectionist policies is visible. What changes do you see coming from the new year, both in the US and in Europe?
I think the 2025 will be very favorable for Europe. First and foremost, I believe President Trump will negotiate an end to the war between Russia and Ukraine. An end to this conflict will be very beneficial to the European economy. I also believe many of President Trump’s pro-growth policies such as less government spending, more efficient governments, lower taxes, less regulation, low cost energy, (similar to the policies of the Mitsotakis government) will be adopted by other European governments leading to stronger European growth. Those that adopt these policies will surge ahead. Those that don’t will be left behind.
Do you think that certain risks, mainly at the geopolitical level, have been underestimated by governments or markets? What worries you the most?
The major risk for Europe is the continuation or escalation of the Russia/Ukraine war. When this ends, Europe can focus on economic growth. For Europe not to be left behind China and the US, they need to focus more on investment and productivity growth.
You are investing in Greece even when the prospects were not so rosy. Do you think that the crisis was an opportunity for the Greek economy or are there areas that worry you?
The policies of Mitsotakis have benefited Greece enormously. Higher growth, higher employment, rising wages, rising real estate prices, rising manufacturing, record tourism, responsible fiscal budget and rapidly declining debt/GDP. Greece has now achieved investment grade status, its economy is one of the fastest growing in Europe and the unemployment rate is below 10%.
Do you consider that the Greek economy is vulnerable to a European economic stagnation or a political crisis in major countries? Do you think it can be an investment destination for foreign funds still looking for returns in euro economies?
We have three more good years to look forward to iunder Mitsotakis and many more good years if the next administration continues these pro-growth policies. My biggest concern is if Greece elects the next government backtracks on these very successful policies and instead pursues the previous failed policies of predecessor governments. I don’t think this will happen because the results have been too good for Greece not to move forward.
Is there anything that worries you in the Greek banking sector, which you are active in as an investor? How much do you share the concerns about DTCs?
The Greek banking sector is on extremely solid footing. The banks have high capital levels, high profitability, and low non-performing loans. They are now growing their loan book supporting the Greek economy. In terms of valuation, Greek banks are among the cheapest in the world. Piraeus, for example, trades at less than 4x earnings and has a projected dividend yield one year out of around 12%. Certainly, room for further price appreciation. Many other Greek companies appear attractively valued in the market. As long as the current policies stay in effect the banks, the Greek economy and Greece will have a very favorable future.
