Ross backs Ireland’s recovery

AGGRESSIVE spending cuts will make Ireland the first European nation to recover from the sovereign debt crisis, said billionaire investor Wilbur Ross.

“Ireland will be the first of the euro countries to recover because they really bit the bullet,” said Mr Ross, chairman of WL Ross&. “Once they get through all that, the fundamental advantages of Ireland are intact.”

Ross, whose firm manages about $10 billion (€6.9bn) in assets, joined four other investors in agreeing to buy a 34.9% stake in Bank of Ireland. The firm is alone among the country’s six largest lenders in avoiding Government control. The bank was ordered to raise €5.2bn of capital following stress tests in March.

Ireland’s advantages include the lowest corporate tax rate in Europe, a young and well-educated workforce and a solid transportation and communications infrastructure, Ross said.

“Ireland will once again become the Celtic Tiger,” said Mr Ross, 73. “We’re very heavily invested there.”

For an investor in distressed assets, Europe is more attractive than the US “because that’s where the problems are more severe”, he said.

European confidence in the economic outlook in August plunged the furthest since December 2008 as a persistent debt crisis clouded growth prospects across the 17-nation eurozone.

An index of executive and consumer sentiment in the eurozone fell to 98.3, this month from a revised 103 in July, its lowest since May 2010, the European Commission said yesterday.

The eurozone’s economic prospects are deteriorating as governments cut spending in a bid to narrow deficits and tackle the debt crisis.

Economic and Monetary Affairs Commissioner Olli Rehn signalled this week that the EU may reduce its 2011 growth forecast from 1.6% on concerns that financial turbulence may spill into the broader economy.