Stability key to Greek prospects, says Fairfax CEO Prem Watsa

Fairfax Financial Holdings chief executive Prem Watsa is confident about Greece’s economic prospects. “I see a huge upside,” he told Kathimerini's Sunday edition during his recent visit to Athens, adding that “you need stability, for a few years.”

Shortly before meeting with Greek Prime Minister Alexis Tsipras on Friday, Watsa told the newspaper that he sees a role for foreign investors in the coming years, under one condition: “Investments go where they are welcomed.”

Asked whether this is the case with foreign investors in Greece, Watsa responded, “They are hesitant now because in the last year they have seen some ups and downs,” clearly indicating that Greece cannot expect new investments until the current climate of instability is removed.

A.P. What made you invest in Greece?

P.W. We see the potential in Greece. We have invested a significant amount in Eurobank, Grivalia [Properties] and lately we bought Eurolife [Life Insurance]. As long as Greece gets its corporate governance right, the possibilities are significant for Greece over the long term.

A.P. People were impressed when you came back for a second round of investments even though the country had gone through a very rough ride. Why did you decide that?

P.W.Because we see the fundamentals in Greece are excellent. Yes, we came a few years ago and Greece has gone through some problems. But if you are a long-term investor you focus on the fundamentals, and they are fine. We look long-term. In our investments it is not unusual that the first few years are difficult but our success is due to our long-term view and our consistency.

A.P. where do you see the investment potential here?

P.W. The banking sector has huge potential, of course. As the economy recovers banking will recover as well. There is a wide variety of sectors with huge potential, the real estate sector being one. But there are so many opportunities for the country that we all know, as long as you open it up to entrepreneurs to come in and provide employment and opportunities to Greeks.

A.P. You are considered something of an expert on Greece in international investor circles. You just brought a team of significant players to Athens. What are their main concerns? What do they tell you when you discuss investing in Greece?

P.W. I do not consider myself an expert on Greece. These investors are focused also on the long terms, they are from the US, Canada and the UK and they are obviously looking to make a return over time. Investments go where they are welcomed. They want to know that the rule of law exists in Greece and that they are welcomed here. These are the basic things they look for. They are hesitant now because in the last year they have seen some ups and downs, bank capital controls etc, and are hesitant in terms of what the government is planning to do. But they are here. They represent organizations that handle over 2 trillion dollars. The fact that they are here shows you that they are interested. Under the proper circumstances they will invest.

A.P. We are at a delicate point now in terms of the negotiations with the troika and so on. It is hard sometimes for the political class to see the upside. What would you tell our political leaders if they asked you whether there is one?

P.W. I see a huge upside. You need stability, for a few years. The economy has gone down 25 percent and unemployment is high. That is the negative view. The positive is that all this can change, the economy can rebound significantly, all it needs is stability. You have seen it in other countries, most recently in Ireland which is now growing at 5 percent. If you achieve stability Greece will come out looking good.

A.P. You were born in India, which used to have a lot of similarities with the Greek economic model in terms of the state's role in the economy. What is the key factor in transforming a country like India from where it was some years ago to its present stage?

P.W. There was a very socialistic economy, no trust in business and no encouragement of capital investment in the country. That changed and in an odd way the International Monetary Fund was big plus for India. Today there is a very progressive government, which very much encourages business to locate there. This transformation is significant and I have seen it – it is huge. There is no reason why that cannot take place in Greece.