SAO PAULO (Reuters) - The BRICS emerging market powerhouses have already bought debt through the European Financial Stability Facility (EFSF) 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,” Christophe Frankel, chief financial officer of the EFSF, told Valor Economico, Brazil’s leading financial daily.
“This represents a very interesting diversification in our investor base,” he added.
Brazil’s central bank and finance ministry declined to comment.
The BRICS group includes Brazil, Russia, India, China and South Africa — major emerging economies whose growth has made them stand out, even as developed nations continued 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 rating agencies, which means investment in its debt is considered close to risk-free.
The EFSF was set up in May 2010 to raise cash for Portuguese and Irish bailout packages as part of a wider safety net.
Buying sovereign debt from Greece — which many investors worry could default soon — would be a far more risky proposition.
A recent Brazilian proposal to support the crisis-hit euro zone has garnered lukewarm support from fellow BRICS countries, with analysts doubting the five nations had the political will or financial clout to throw a lifeline to Europe.
Reporting by Raymond Colitt in Brasilia and Luciana Lopez in Sao Paulo; editing by Jeffrey Benkoe