There's a 60 percent chance Greece will stay in the euro zone because an exit and return to the drachma would be even worse, billionaire distressed asset investor Wilbur Ross said Tuesday—as European leaders were meeting in Brussels to discuss their next moves.
"The drachmaization would be terrible for the whole country, including for the banks," because euros in accounts outside the country and "under mattresses" would not come back into circulation," he said. "My guess is you would have the drachma trading somewhere between 25 cents to 50 cents on the euro. So it would be a pretty bad haircut for the people."
Ross told CNBC he believes the new reforms-for-baillout aid offer expected from Greece Prime Minister Alexis Tsipras will be in the ballpark. At the end of the day, Germany wants Greece to stay in the zone, because an exit would set a precedent for other troubled nations in the union, he added.
"All the polls I've seen show a clear majority of the Greek people want to stay in the EU. Now, it's also true that they don't want austerity and those two are logically inconsistent. But certainly the impetus of the vote was not to get out of the EU, and Mr. Tsipras made clear that that was not his intention either," said the chairman and CEO of WL Ross & Co., which is part of a group of investors that poured $1.8 billion into Greece's Eurobank in 2014.
Tsipras promised voters a reforms-for-cash deal with creditors within 48 hours of Sunday's pivotal referendum, which had asked citizens to vote on whether to accept the terms of an existing international bailout offer. A surprise 61 percent of Greeks voted against the proposals from creditors, which entailed austerity measures and many spending cuts.
"We're about halfway there now and I hope he will be able to keep his promise," said Ross.
While negotiations play out, the banks in Greece have as little a few days or maybe a week before they run out of money, Ross said.
He said the banks were already running out of 20 euro bills to dispense at ATMs—forcing branches to give out 50 euro bills instead of three 20s. Under capital controls, depositors can only withdrawal 60 euros ($65) at a time.
Greek banks—which have been closed for more than a week to prevent an exodus of cash that could risk their collapse—are expected to remain shut until Friday, according to Reuters.
Ross, however, is unconcerned about the risk of a bank run when they do re-open. "In the context of the deal there would be no reason for a big run on the banks. And I just don't think that that's in the cards."
"Now if they don't make a deal, and you do have a collapse in the economy, that could be a very different situation. But it doesn't feel to us as though that's what is going to happen," he added.
When asked how long it would be before he considered selling his stake in Eurobank, Ross said it would be a while. He's still hopeful that he can make money on his investment despite the increasingly precarious state of the country's banking sector.
"The last quote on Eurobank stock was a tiny fraction of its book value just before they announced the moratorium and the suspension of trading. So certainly at any kind of price like that, one would be more sensible probably to be a buyer than to be a seller," he said.
Before the interruption of the bailout talks, Greek banks were making fundamental progress, Ross noted.
"Assuming the talks go through, the ELA [emergency liquidity assistance] money will become available to the banks that will get back to business like usual, and there will be a restoration of liquidity to the economy," he said
"You can't have successful banks without a successful economy, and you can't have a successful economy without successful banks. So their fates are inextricably entwined," he stressed.