BRICS nations already buying EFSF debt: report

Reuters

SAO PAULO (Reuters) - The BRICS emerging market powerhouses have already bought debt through the European Financial Stability Facility and could buy more, a potential help to struggling euro zone economies, a Brazilian newspaper reported on Monday.

"We're very pleased to see already some BRICS countries investing in our debt," said Christophe Frankel, chief financial officer of the EFSF, as quoted in Valor Economico, Brazil's leading financial daily.

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"This represents a very interesting diversification in our investor base," he added.

The BRICS group includes Brazil, Russia, India, China and South Africa -- major emerging economies whose growth have made them stand out even as developed nations continue to struggle.

The euro zone is facing rocky economic prospects, with debt problems in Greece and elsewhere threatening the monetary union's survival.

The EFSF has already held a number of teleconferences with BRICS central banks, Valor reported.

The facility is rated AAA by ratings agencies, which means that investment in its debt is considered close to risk-free.

The European Financial Stability Facility was set up in May 2010 to raise cash for Portuguese and Irish bailout packages as part of a wider safety net.

In contrast, buying sovereign debt from Greece -- which many investors worry could default soon -- would be a far different proposition.

A recent Brazilian proposal to support the crisis-hit euro zone has garnered only lukewarm support from fellow BRICS countries, with analysts doubting whether the five nations had the political will or financial clout to throw a lifeline to Europe.

Brazil's central bank and finance ministry were not immediately available for comment.

(Reporting by Raymond Colitt in Brasilia and Luciana Lopez in Sao Paulo; Editing by Theodore d'Afflisio)