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.