(Adds Greek minister expressing scepticism)
* BRICS to meet in Washington on sidelines of IMF
* China urges euro area to prevent crisis spreading
* India source says New Delhi "cautious" over plan
* S.Africa says its financial firepower limited
* Greek minister says seen no buying up to now
By Raymond Colitt and Rajesh Kumar Singh
BRASILIA/NEW DELHI, Sept 14 The BRICS emerging
economies are considering offering support to the euro area,
possibly by buying bonds, although doubts emerged that a
significant plan would materialise.
A central bank adviser in China urged Beijing on Wednesday
not to buy large amounts of euro area bonds and South Africa's
finance minister suggested his country might not have the
financial firepower to support a bond-buying plan.
Greece, the most perilously placed euro zone country, also
"We have invited all the countries that you have mentioned
(Russia and China) to take an active part in covering the
country's borrowing needs through the T-bill sales programme,"
Deputy Finance Minister Filippos Sachinidis told radio station
Real FM. "Despite the invitation, we have found there was little
or no participation at all."
Despite its shut-out from bond markets, Athens still holds
monthly T-bill auctions to cover short-term borrowing needs.
The BRICS -- Brazil, Russia, India, China and South Africa
-- will discuss what they can do next Thursday on the sidelines
of meetings of the World Bank and International Monetary Fund in
Washington, said R. Gopalan, Economic Affairs Secretary to
India's Finance Ministry.
Speculation is mounting that Greece could default on its
debts and even exit the 17-nation euro zone.
In preliminary talks, the BRICS discussed increasing their
holdings of euro-denominated bonds to help ease the debt crisis,
a senior Brazilian government official told Reuters on Tuesday.
However, analysts suggested bond buying would not fly.
"The magnitude of the European crisis is so large," said
Abheek Barua, chief economist at HDFC Bank in New Delhi. "Unless
there's sort of massive buying, then it won't make a
Even five weeks of bond buying by the European Central Bank,
to the tune of 70 billion euros, have not turned investor
sentiment over the debt crisis, which is now threatening Italy.
Chinese Premier Wen Jiabao said the world's second-biggest
economy was willing to help its main trade partner, but the euro
area in turn needed to prevent the debt crisis from spreading.
With about $3.2 trillion in foreign exchange reserves, a
quarter of which analysts estimate is in euro-denominated
assets, China has the firepower to make a difference.
"The governments of all countries must truly shoulder their
responsibilities and deal properly with their own affairs," Wen
said in a speech at the World Economic Forum in Dalian, China,
although he made no direct mention of a BRICS plan.
Central bank adviser Li Dakui suggested China should focus
on its own economy. "We have more than our share of trouble to
deal with," Li said, referring to concerns in China about
inflation and asset bubbles.
South African Finance Minister Pravin Gordhan said his
country lacked significant reserves, so it was undecided about
buying euro area bonds. Net gold and currency reserves were just
under $50 billion in August.
"South Africa is not part of that market at the moment and
it's the big countries who have $3.2 trillion in reserves. We
are Mickey Mouse compared to that and they can afford to look at
some of those issues," he said.
New Delhi would be "cautious" about supporting a plan, an
Indian finance ministry official, who declined to be identified,
said on Tuesday.
India holds about 20 percent of its $320 billion in foreign
currency assets in euro debt and a senior Indian official said
that proportion would not change.
"All I can tell you is we will maintain the 20 percent
ratio," the official said.
Vadim Lukov, the Kremlin's special envoy to the G8 and a
BRIC coordinator, declined to be drawn on a BRICS plan.
"I will not deny or confirm this information," Lukov said.
"Any such information may disturb the markets and potential
buyers of the bonds."
Global policy coordination would also be difficult because
countries are at different stages of the economic cycle, Indian
Finance Minister Pranab Mukherjee said.
A Brazilian government source said the country did not
intend to use its international reserves of around $355 billion
to buy European debt.
But it could use its sovereign debt fund, which is allowed
to take on more risky investments, although that amounts to just
$9 billion and is already mostly invested in stocks.
Brazilian financial newspaper Valor reported on Tuesday that
bond purchases could be limited to debt from the more
financially solid European nations.
IMF head Christine Lagarde said she hoped that would not be
"My hope is that if they happen, these interventions will be
of wide scope and not limited to the safe bonds of a few
states," she was quoted as saying on Wednesday by Italy's La
(Additional reporting by Reuters correspondents in Cape Town,
Milan, Sao Paolo, Singapore, Mumbai, London and Dalian, China;
Writing by Neil Fullick; Editing by Ron Popeski/Mike Peacock)