New York billionaire’s vote of confidence in Ireland’s economic recovery
Wilbur Ross puts his money where his mouth is with Bank of Ireland deal
New York-based billionaire Wilbur Ross has revealed why Ireland’s attempts to recover from the recession are attracting outside investment.
Ross believes a growing number of outside investors are reacting favorably to Irish efforts to rebuild an economy crippled by the post Celtic Tiger property collapse.
The American visitor, known for restructuring and rescuing failed companies, has just put his money where his mouth is with a $430million investment in Bank of Ireland.
His decision to join Canadian firm Fairfax Financial and California’s Capital Group in a $1.6 billion investment in Bank of Ireland represents the first significant foreign investment in Ireland’s banking sector since it collapsed in 2008.
Speaking to the Reuters news agency, Ross has revealed that the deal was fueled by positive news on an Irish recovery led by the government’s announcement that it is ahead of target to bring its budget deficit under control.
The lack of public protest against a harsh austerity program and the reduction in the interest rate charged on the EU-IMF bail-out have also prompted Ross’s confidence in Ireland.
“The macro picture of Ireland is clearly headed in the right direction and will very likely have a more v-shaped recovery than most other European countries,” Ross told Reuters.
“We have gotten a lot of inquires from other investing institutions that know us, asking about Ireland and suggesting that they at least are now willing to take a much better look than they were prior to all of this.”
Ross sees Ireland as a different proposition to Greece and Portugal who are both struggling to cope with the terms of their international bail-out packages.
He added: “I am genuinely impressed and have been for some time at the way Ireland bit the bullet and faced up to it.
“Unlike the Club Med economies, the former government and the present one have dealt very surgically and very quickly with the problem.”
The Euro zone deal and confirmation that Ireland is virtually guaranteed funding through 2013 was also a factor in his huge investment and vote of confidence.
“Since they are fully funded at sovereign level to 2013, there can’t be a government bond auction that could be undersubscribed and precipitate a problem,” said Ross.
“There is no other country in Europe that can say they have that.”
The entrepreneur also believes that Bank of Ireland can eventually return to profit and offer him a return on his investment.
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