NO BRAZIL SOLUTION WITHOUT IMF, GERMAN BANKER SAYS
A solution to Brazil's debt problems
is unthinkable without the involvement of the International
Monetary Fund, Juergen Sarrazin, management board member of
Dresdner Bank AG responsible for Latin America said.
    Sarrazin told the business daily Handelsblatt that Brazil's
interest payments moratorium had cost it the goodwill of many
banks.
    "Now there will certainly be no solutions without the IMF,"
he said. "Alternatives which could be imagined before, such as
bringing the IMF in with us in a loose form, are over," he said.
    Sarrazin, who through Dresdner represents German banks in
several rescheduling coordinating committees, noted that Brazil
was still prepared to negotiate.
    But he said work in the coordinating committees had already
run into difficulties before Brazil's interest moratorium.
    Justified calls by debtors for more flexibility from the
banks were blocked because U.S. Regulations made solutions such
as capitalising of interest virtually impossible, he said.
    Although many European banks were opposed to the use of
interest capitalisation, "this was an alternative which has to
be brought in," Sarrazin said.
 REUTER
