Brazil and the EU welcomed on Monday a German proposal to create a European network to avert US surveillance. At a summit in Brussels, Rousseff said the joint project would "guarantee the neutrality" of the Internet.

Brazilian telecoms provider Telebras and Spain's IslaLink plan major shares in the cable project priced at $185 million (135 million euros). European and Brazilian pension funds would put up the remainder.

The cable would span the Atlantic Ocean, from the Portuguese capital Lisbon to Fortaleza in northeastern Brazil.

Last year, it emerged that the National Security Agency (NSA) had spied on Rousseff's email and phone communications. US President Barack Obama apologized to Merkel for surveillance of her mobile phone.

"We have to respect privacy, human rights and the sovereignty of nations. We don't want businesses to be spied upon," Rouseff told a news conference in the presence of top EU officials.

"We will continue to enhance data protection and global privacy standards," said President Herman Van Rompuy.

Brussels has since scrutinized EU-Us agreements on data transfers, demanding increased guarantees for the protection of data of citizens in the EU.

The EU is a major trading partner with Brazil, receiving more than 20 percent of Brazil's exports and accounting for a similar share of its imports.

Talks on a long-envisaged free-trade deal were however delayed at the summit, officials said.

ipj/dr (dpa, AFP, Reuters)