"Nobody, no democratic nation, will permit this violation of sovereignty and human and civil rights," said Rousseff, adding "there will be a growing reaction" from countries affected by the eavesdropping scandal.
Allegations that the US National Security Agency tapped Merkel's cellphone and monitored millions of phone calls in France has set off a furor in Europe with leaders taking it up at an EU summit.
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In an interview with Brazilian radio in Belo Horizonte, Rousseff reiterated that spying on Brazilian citizens, companies and government was "a grave violation of sovereignty."
She noted that US President Barack Obama has promised to "evaluate and adopt measures" in response.
But she said the US rationale that the NSA eavesdropping was needed to combat terrorism "does not fit in my case, and neither do I think it fits in the case of the monitoring of (Merkel's) cellphone."
Rousseff, who cancelled a trip to Washington over the spying, spoke out against it in a speech last month to the UN General Assembly.
She said Brazil would take part in an international conference in April on Internet governance.
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