HIGHLIGHTS-Euro zone finance ministers' comments

LUXEMBOURG, June 21 (Reuters) - Euro zone finance ministers and officials met on Thursday to discuss a bailout for Spanish banks and the way ahead for Greece's emergency lending programme.

Following are comments from ministers and officials after the talks:

EUROGROUP PRESIDENT JEAN-CLAUDE JUNCKER

ON REVIEWING GREEK BAILOUT AGREEMENT:

"As far as Greece is concerned, we didn't discuss today in detail the articulation of the reviewed memorandum of understanding.

"We will send ... our people on the ground, they will be invited by the Greek authorities from first meetings on Monday morning, we will have a look into the findings of the (EU/IMF) troika and then we will discuss in detail the different means and instruments which can be used.

"It doesn't make sense for the time being to give more precise indications on the content of the programme ... this depends on the findings of the troika."

ON EU/IMF TROIKA VISITING ATHENS:

"We expect the new government to invite the troika to Athens next Monday because we do think are in an urgent situation and all the procedures need to be speeded up. They will take stock of the situation..."

"On the basis on the guidance we seek, a full troika mission will go to Athens with a view to reaching an agreement on the conditionality that should be reflected in an updated memorandum of understanding. This includes an agreement on the measures of prior actions to be implemented before the next disbursement can take place."

ON NEXT TRANCHE FOR GREECE:

"We took note that the EFSF will disperse the remaining 1 billion euros of the first instalment before the end of this month."

ON GREEK COMMITMENT TO EURO ZONE:

"We were listening carefully to the caretaker minister George Zanias, who attended the meeting tonight, and gave us reassurances on the fiscal situation in Greece and on the determination of the new prime minister and the coalition to remain committed to the euro and to honour the engagement of Greece toward the European Union and the euro area."

ON SUPPORT FOR SPANISH BANKS:

"The exact amount of money will be known by the end of the (memorandum of understanding) negotiations... The financial assistance will be provided by the EFSF until the ESM becomes available, and then it will be transferred to the ESM.

"If the ESM would be in force in time we would immediately start by using the instrument of the ESM."

"We would ask the (European) Commission and the others I mentioned to include in that memorandum of understanding the relevant conditionality for the financial sector, including restructuring plans in accordance with EU state aid rules."

ON TIMING OF SPANISH REQUEST:

"We would expect the Spanish authorities to put forward a formal request for financial assistance by next Monday."

ON SENIORITY OF LOANS TO SPAIN:

"We will have to discuss this in the next coming weeks but this is not as important a question as it may seem."

ON PORTUGAL:

"The programme is progressing well, the 2012 deficit target of 4.5 pct is within reach, and important fiscal and structural efforts have been undertaken that will create the conditions for sustainable growth."

ON ESM PERMANENT BAILOUT FUND:

"We were checking the progress of the ratification process concerning the ESM (European Stability Mechanism) treaty. This ratification process is progressing well, with parliamentary approval already obtained in eight member states...

"We are hoping that the ESM treaty will enter into force as it has been provided in (an) earlier decision."

EUROPEAN FINANCIAL STABILITY FACILITY CEO KLAUS REGLING

ON SENIORITY OF LOANS TO SPAIN:

"Take the case of Spain, even if the 100 billion were dispersed, this is less than 10 percent of Spanish GDP and therefore it's a minor part of the total public debt of Spain."

ON SPANISH BANK SUPPORT FROM EFSF BAILOUT FUND:

"The EFSF will be ready and will be able to support Spain very quickly and even with very large amounts. We gained experience in the case of Greece how to recapitalise banks without going to the market raise large amounts of money."

EU ECONOMIC AND MONETARY AFFAIRS COMMISSIONER OLLI REHN

ON IMF ASSESSMENT OF EURO ZONE:

"The Commission by and large agrees with the IMF's concluding remarks in this article or report."

ON BAILOUT FOR SPANISH BANKS:

"Our objective is to conclude the work so that the Eurogroup could take decisions on this sectoral programme of bank restructuring and recapitalisation for Spain in the meeting of the Eurogroup on July 9."

"Today's decision is that the EFSF will provide the credit line until the ESM will be available."

ON ASSESSING NEEDS OF BANKS:

"Policy conditionality of this sectoral programme will be focused on the financial sector, on a bank-by-bank basis, for those banks that have received support for recapitalisation under the EU state aid rules as well as in system-wide terms for the financial sector and the supervisory framework as a whole."

FRENCH FINANCE MINISTER PIERRE MOSCOVICI

ON GREEK PROGRAMME:

"We still think the engagements undertaken by Greece should be respected...(but) we are in favour of a certain flexibility and taking into account the expectations of the Greek people, particularly in terms of economic growth."

ON SPAIN'S REQUEST FOR SUPPORT FOR ITS BANKS:

"The official request for aid will be presented tomorrow when (Spanish Economy Minister) Luis de Guindos returns to Madrid. That is what I understood from the meeting. He told us 'manana'."

IMF MANAGING DIRECTOR CHRISTINE LAGARDE

ON SHORT-TERM MEASURES:

"The short-term measures should be decided... The first one is the creative and inventive monetary policy that manages to actually transmit, throughout the zone, the monetary policy that will accommodate growth and that takes many forms, whether it's SMP or whether it's more traditional monetary policy is for the ECB to decide."

"The second short-term measure, fiscal consolidation to clearly be followed decisively and credibly where there are market pressures..."

"The third one is recapitalisation of the weak banks with preferably a direct link between the EFSF/ESM and the banks, without going through the sovereign, in order to break the negative feedback loop...."

ON RECAPITALISING BANKS:

"Our preference is that this recapitalisation or financing be done without the intermediary of the sovereign and direct from either EFSF or ESM into the banks that need recapitalisation."

ON BANKING UNION, FISCAL UNION AND SHARING FUNDS:

"As a priority, the principle of a banking union, which takes the form in our view of a common European supervision, which takes the form of bank resolution, which takes the form of deposit insurance of a euro area-wide nature. That is principle number one.

"Principle number two is a fiscal union, more integration in fiscal terms, with risk-sharing supported by stronger governance... It includes more resources at the centre, democratic controls and oversight and intermediate steps towards gradual, but limited, sharing of funds.

"You can call them project, you can call them bills, you can call them bonds, but the principle of it is the sharing between the member states."

ON COMPLETING EURO ZONE MONETARY UNION:

"We are clearly seeing additional tension and acute stress applying to both banks and sovereigns in the euro area. And with that in mind, the IMF believes that a determined and forceful move towards a complete European monetary union should be reaffirmed in order to restore faith in the system because as we see it at the moment, the viability of the European monetary system is questioned."

Following are earlier comments from ministers and officials ahead of the talks:

BELGIAN FINANCE MINISTER STEVEN VANACKERE

"We need two answers: in the short term, the here and now answer for Greece, for Spain, they are all in need, but also in the longer term perspective, the building blocks that (EU Council President) Herman van Rompuy and also (Eurogroup head) Mr Juncker will outline at the end of the month. The combination of these should give the market confidence."

AUSTRIAN FINANCE MINISTER MARIA FEKTER

ASKED IF SPANISH BAILOUT WOULD BE FOR BANKS ONLY:

"I expect it to be like (agreed) in the informal phone conference, that it will be about the banks."

ON GREECE:

"We will have to see how much time Greece missed due to its election campaign... if it missed too much, Greece will have to work even harder."

DUTCH FINANCE MINISTER JAN KEES DE JAGER

ON GREECE:

"There is no alternative with regards to the reform, that is clear. With smarter measures then you can realise more, that is better, but an alternative to hard, painful reform, that alternative is not there."

ON SPANISH BOND YIELDS:

"In Spain there are some problems. The market wants to see results, it is important that they allow real results to be seen. The government must vigorously do and implement what they have announced, and thereby convince... the markets."

ON POSSIBILITY OF EMERGENCY FUNDS BEING USED TO BUY BONDS, TO LOWER YIELDS:

"That is an existing instrument but one with conditions. I have seen it said that it could be without conditions, but for me it has to have conditions."

SPANISH ECONOMY MINISTER LUIS DE GUINDOS

ON REQUESTING SUPPORT FOR SPANISH BANKS:

"The presentation of financial aid is a formality, it is not the fundamental issue. We have already started working on the design of the aid with the Commission, the European Central Bank and the International Monetary Fund.

"We will present the request in the next few days, but I insist this is a formality, it is not important. I think that before the end of July we will have an idea, a very clear, detailed idea of how we will do (the bailout)."

IMF MANAGING DIRECTOR CHRISTINE LAGARDE

"The IMF is here to provide all its expertise, all its assessments and analysis to help the Europeans reach their objectives."

IRISH FINANCE MINISTER MICHAEL NOONAN

ON SPAIN:

"It would be Ireland's policy to separate banking debt from sovereign debt."

"The experience of Ireland should have be learned by the European authorities and to recapitalise their banks and to transfer the accounting of it onto the sovereign seemed to be an additional burden."

"If Spain made an application the weekend the agreement was made and they quantified their needs, I think that might have eased the market concern. But while there is no request and while there is no certainty about the amount being requested, I think that makes the markets jittery."

FRENCH FINANCE MINISTER PIERRE MOSCOVICI:

ON GREECE:

"I will start by saying that I'm delighted by the fact that the Greek people have opted for a pro-euro government. That's the right way to go.

"We know that it means that Greece will have to respect its commitments. But it also means that Europe has to be sensitive to the feelings of the Greek people, and take measures in order to help the country achieve growth. Efforts must be made, but at the same time we have to create conditions for hope. That's what the euro must be about."

ASKED IF SPAIN WILL MAKE A FORMAL REQUEST AT THE MEETING FOR SUPPORT FOR ITS BANKS:

"That's for Spain to determine itself. Now they have some decisions to take - and they will be taken. The plan we decided on some 15 days ago is robust and sufficient according to all the analysis we have.

"The mechanisms exist, and I am confident in Spain's ability to make the necessary reforms, and I am confident in the European Union's capacity to respond to the difficulties in the banking sector.

"More broadly, what we need to do in the days ahead is to provide a joint, stable and lasting framework for the euro zone."

ON SITUATION IN FRANCE:

"I am very confident in my country. I will have the opportunity (at the Eurogroup) to present our public finances strategy and that our commitments will be met... We will be at 4.5 percent (deficit) in 2012 and we will work on our strategy for 2013 to reach 3 percent (deficit). France has all the resources to both to carry out growth policies and to respect our public finance commitments."

GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE

ASKED ABOUT POSSIBILITY OF EFSF BAILOUT FUND BUYING BONDS ON SECONDARY MARKET:

"The legal situation for the European rescue mechanism, the EFSF - the ESM isn't in force yet - is set out in the treaty.

"Under certain circumstances there is a possibility to operate on the secondary market. That's known, that's sorted and all this speculation can be surprising as it's all set out clearly in the treaties: following a country's request and the agreement of an adjustment programme.

"We're flexible on the specific financing instruments, such as with the banking recapitalisation in Spain. There are different types of instruments that we can use efficiently, such as with leveraging and such, but we don't need continuously new considerations in public as if we hadn't made precise agreements already."

ASKED ABOUT HOW TO END MARKET TURMOIL:

"Speculate less, but work precisely, implement what has been decided instead of creating expectations that are completely unrealistic, but on the other hand implement what has been agreed.

"That's also what I told my colleagues in the G20 framework in Los Cabos again: Germany, for instance, has largely fulfilled its commitments according to IMF reports, the OECD and the European Commission.

"If everyone fulfils their commitments, the problems will soon be solved. And if there is less speculation, including in the media, the financial markets won't constantly be insecure, because how are investors meant to differentiate if you as media keep publishing groundless rumours."

ON GERMAN CONSTITUTIONAL COURT SAYING IT NEEDED TIME TO DECIDE ON LEGALITY OF ESM PERMANENT BAILOUT FUND:

"I don't believe it is smart if the organs of the constitution communicate with each other in public and I believe it's even less smart if the government makes comments on this." (Reporting by Daniel Flynn, Ben Deighton, Annika Breidthardt, Claire Davenport, Robin Emmott, John O'Donnell and Charlie Dunmore; editing by Rex Merrifield)