Oct. 28 (Bloomberg) -- Brazil stands ready to help Europe recover from its debt crisis if the South American nation’s contributions are channeled through the International Monetary Fund or bilateral agreements, said a Brazilian government official with knowledge of the talks.
While the lack of details on yesterday’s European rescue package makes it hard to evaluate, Brazil will attend the Group of 20 meeting in Cannes next week open to helping Europe and other nations through the IMF, said the official, who declined to be named because he’s not authorized to discuss the talks publicly. Any contribution from Brazil would come from its international reserves, not its sovereign fund, he said.
European leaders yesterday cajoled bondholders into accepting 50 percent writedowns on Greek debt and boosted their rescue fund’s capacity to 1 trillion euros ($1.4 trillion) in a crisis-fighting package intended to shield the euro area. Measures also included a recapitalization of European banks and a potentially bigger role for the IMF.
One possibility being discussed is that the IMF might administer a trust fund that would buy European bonds, the official said. How such a fund would operate remains nebulous, he added.
Brazilian Finance Minister Guido Mantega yesterday called the European rescue accord a “good proposal,” highlighting as positive the proposal for banks to write off 50 percent of Greek debt.
“What worries me is the timing, if we have the necessary time to implement the plan without a deterioration in the global economy,” Mantega told reporters in Brasilia. “The measures are good, they’re efficient, but I don’t know if they will be enough.”
--Editors: Harry Maurer, Joshua Goodman
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