Paulson Shying Away From Greece Until Elections

Dec 3 2014 | 3:32am ET

Paulson & Co. has been among the most active hedge funds in Greece, investing heavily in the country’s battered banks, among other opportunities. But the firm is taking a break from the troubled nation, at least for a year-and-a-half.

Firm founder John Paulson told a Greek investment conference this week that he would stop adding to his investments in the country until after its next election. The hedge-fund honcho said he hoped that such a poll won’t come until the middle of 2016, to “give time to the current policies to act.”

The country’s last elections, in 2012, saw a surge in support for parties of the far left and far right amidst anger over the terms of its European Union-backed economic bailout. Opinion polls currently show the far-left SYRIZA Party favored over the right-leaning New Democracy, led by Prime Minister Antonio Samaras.

That has Paulson worried.

“Greece is at the start of a remarkable turnaround in its course, but political uncertainty will have to be lifted immediately,” he said, adding, “what Greece needs is political stability.”

“Our investment plans are on hold for now, until we see the result of the next presidential election. As soon as political stability is achieved, we will accelerate our investments.”

But that doesn’t mean Paulson wants to see elections sooner rather than later.

“It’s too early to hold fresh elections,” he said. “The uncertainty has caused a drop in Greek stock markets and shares, while new investments are being postponed. The best course of action would be to avoid elections until June 2016 and give time to the current policies to act.”

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