I had this after replacing the belt on a 300E. Except we discovered that fan wasn't quite on properly. On the AC pulley the belt was one notch off centre. As mentioned above, make sure the belt sits properly on each pulley.

There is another old fashined way of stopping screeching. Crayon wax based.

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1985 190E - Gone
1989 230E - Gone
1995 C200 - Gone
1993 280E 120000KM - Built like a brick, the best one yet