Brazil on Tuesday rejected the idea of buying European bonds to help ease the euro zone's debt crisis, casting doubt on a plan for major emerging market economies to offer fresh funds for the continent's rescue.

European leaders had floated the idea that developing nations including Brazil and China could provide funding to buy Euro zone bonds, which would help lower yields and ease pressure on countries such as Spain and Italy.

But Brazilian Finance Minister Guido Mantega echoed calls for Europe to solve its own burgeoning fiscal problems, saying Brazil had no intention of making such purchases.

I believe that European countries do not need funds from Brazil to buy bonds. Brazil is not considering it, Mantega told reporters in Brasilia. They have to find solutions to the European problems within Europe.

However, Mantega said Brazil would be willing to provide financial help via the International Monetary Fund.

His statements came as European leaders head into a summit on Wednesday with no apparent compromise to reduce Greece's debt to private bondholders amid uncertainties about a planned bank recapitalization.

Brazilian officials earlier this year floated a plan to buy European debt along with members of the BRICS group of nations, which includes Russia, China, India and South Africa, but backed away after tepid response from the group.

Analysts said that move was unlikely to begin with, given that Brazil would not be able to put up enough money to have a serious effect on the crisis, and could be legally restricted from using reserves to buy debt that faces a high or moderate risk of default.

IMF PROPOSAL

Eurozone officials said on Tuesday the IMF is considering taking part in a special purpose investment vehicle (SPIV), which would issue debt and use the proceeds to buy bonds of distressed euro zone sovereigns on the secondary market or extend loans to at-risk governments.

India and Russia are not interested in offering more funds to help Europe while there was not evidence China planned to chip in, a high ranking official from an emerging market country told Reuters.

The official said major emerging powers believe Europe is not doing enough to find a solution to the crisis amid internal bickering.

In September, Brazil proposed that BRICS countries offer new funds to the IMF to battle the European crisis.

The IMF's leading share holders, which include the United States and some European countries, rejected that idea, which analysts say could potentially dilute their influence in the lender.

The United States, Japan, Germany and China, have said that the fund's $380 billion worth of resources is enough.

Some Brazilian officials see the crisis in Europe and slow growth in the United States as a chance to increase the South American country role in global affairs.

Brazil's economy, by far the largest in Latin America, will keep growing in coming years despite the international turmoil, Mantega said.

Brazil, a commodities giant, has lowered its benchmark interest rate in a bid to shield its economy from a deteriorating global economy and hiked import taxes to protect the local auto industry.

(Additional reporting by Lesley Wroughton in Washington; Writing by Alonso Soto; Editing by Leslie Adler, Gary Hill)

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