MercoPress. South Atlantic News Agency

Brazil encouraged by Europe’s plan announcement but wants to look at details

Good start but unclear if it will be sufficient, said Mantega

Brazil's government is encouraged by Europe's announcement of a plan to resolve the nagging debt crisis, though more details are needed on the proposal to determine its viability, Brazilian Finance Minister Guido Mantega said Thursday.

“The EU meeting advanced an important proposal that now gives us something to work with,” he said.

After an all-night meeting, European Union leaders said they secured a deal with private banks to reduce Greece's debt by 50%. They also announced an agreement to expand the size of the Euro zone's bailout fund, the European Financial Stability Facility, by up to five-fold, suggesting it could provide guarantees for EU member sovereign debt of around one trillion Euros.

Mantega declined to comment at length on the proposals but said he believed they were an important first step toward resolving Europe's debt woes.

“The proposed measures are a good start, but it's unclear if they will be sufficient,” he said.

The Brazilian finance minister said questions remained about whether all participating creditors would sign on to the deal. However he declined to say whether Brazil would participate in backing for the deal.

Brazil's government would begin examining the proposal in depth on Friday, Mantega said, and would prepare to discuss it with counterparts at a meeting of Group of 20 nation leaders in Cannes, France, next week.

Brazil all along has said it is willing to consider supporting the Euro zone but not directly to the financial stability fund but rather through the IMF.