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Brazil 'planning' to help Europe via IMF
Official says foreign minister to propose Brazil and emerging nations contribute funds to help ease euro zone crisis.
Last Modified: 20 Sep 2011 05:57
Officials in Rousseff's government see the EU crisis as an opportunity for Brazil to enhance its global role [AFP]

Brazil will propose that it and other large emerging market countries make new funds available to the International Monetary Fund (IMF) as a way to help ease the crisis in the euro zone, an official has said.

Guido Mantega, the Brazilian finance minister, will make the proposal at a meeting of the BRICS group later this week in Washington, the official told Reuters news agency on Monday on condition of anonymity.

The BRICS bloc of large emerging markets also includes Russia, India, China and South Africa.

Brazil could make up to $10bn of its own money available to help Europe through various channels, including the IMF or by making bond purchases, the official added.

"Giving more funds to the IMF looks like one of the more attractive options available for us to help Europe."

'An opportunity'

BRICS countries are already buying European debt through the European Financial Stability Facility, Valor Economico, a Brazilian newspaper, reported on Monday.

Mantega had previously proposed that BRICS countries engage in co-ordinated purchases of European bonds, but that idea met with resistance from other members of the group who were wary of buying risky assets or doubted they had enough financial firepower to help.

The IMF could provide a "safer" vehicle for a co-ordinated effort, the official said.

The proposal would satisfy two imperatives for Brazil. It could help insulate other troubled economies on the periphery of Europe - namely Portugal and Spain - which have large investments in Brazil.

Moreover, a greater financial participation at the IMF could eventually enhance Brazil's power at the Washington-based lender.

Officials in the government of Dilma Rousseff, the Brazilian president, have said they see the crisis in Europe and US as an opportunity for Brazil to push for a greater role in global affairs for themselves and BRICS countries generally.

Source:
Agencies
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