Rousseff Says Brazil Ready to Join Effort to Help Europe Ease Debt Crisis

Brazilian President Dilma Rousseff said her country is willing to help Europe overcome its debt crisis as speculation mounts that China and other big emerging markets may buy euro-area bonds.

“It’s necessary to speed up any rescue,” Rousseff told reporters today in Brasilia. “Brazil will always be willing to participate in any international effort.”

Finance ministers from Brazil, Russia, India, China and South Africa, the so-called BRICS nations, plan to meet in Washington Sept. 22 and will decide whether to assist Europe overcome the crisis.

While Rousseff did not say how Brazil can help Europe, Sao Paulo-based newspaper Valor Economico reported this week that BRIC nations may use part of their international reserves to increase purchases of German and U.K.-issued debt.

Brazil’s central bank holds a near-record $352 billion in reserves, though it is bound by a policy that prioritizes the safety and liquidity of these assets over potential returns. More than 80 percent of its reserves are invested in dollar- denominated assets.

Rousseff said today that using Brazil’s $9 billion sovereign wealth fund, which has greater freedom to invest its assets than the central bank, may not be the best way to assist European nations.

“There are other ways,” she said, adding that the burden was on Europe and the U.S. to resolve their respective debt challenges.

European Commission President Jose Barroso today said he is close to proposing options on euro-area bond sales even as Germany continues to oppose joint debt issuance. Russia is “theoretically” prepared to buy common euro-area bonds, Deputy Finance Minister Sergei Storchak said yesterday.

Even while extending Brazil’s help to Europe, Rousseff warned the U.S. against another round of monetary stimulus that she said is “spreading dollars throughout the world” and “threatens” the competitiveness of companies in Latin America’s biggest economy.

To contact the reporter on this story: Carla Simoes in Brasilia Newsroom at csimoes1@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net