HIGHLIGHTS-Euro zone finance ministers' meeting

BRUSSELS, July 6 (Reuters) - The following are comments by euro zone finance ministers and other officials in connection with their meeting on Monday in Brussels.

EUROGROUP CHAIRMAN JEAN-CLAUDE JUNCKER

"The rate of employment is likely to fall, unemployment is likely to rise ... the risk is that we shall move towards a genuine social crisis."

On French budgetary position:

"I am sure that France intends to comply fully with our common rules on fiscal consolidation as soon as the recovery begins, as soon as the exit strategy has to be implemented."

EU MONETARY AFFAIRS COMMISSIONER JOAQUIN ALMUNIA

"The deflationary risks are very small, not significant."

"In a few months' time we expect to see inflation very close to the price stability objective."

EUROGROUP'S JUNCKER

On budgets:

"We have not reached (a point) at which the exit strategy could be applied. The economic indicators suggest the worst is now behind us. As soon as we see some sort of budgetary recovery, budgetary consolidation should resume so that as quickly as possible the countries of the European Union and the euro zone should return to balance."

EU'S ALMUNIA:

On IMF representation:

"Both the president and myself as commissioner, we have stressed that the best way to have a clear and strong defence of our interests ... at the IMF level is to have a single chair representing the whole of the euro area.

"This is not the opinion of some members of the euro area."

"Everyone agrees for the long term this is the best solution but some think the long term is always very far away."

On economy, budgets:

"Our capacity to grow without imbalances is being diminished by the crisis ... lower potential growth will constrain the room for manoeuvre for fiscal policies in the near future."

EUROGROUP'S JUNCKER

On IMF representation:

"One of the options that was firmly supported by some of our partners is a reduction in the number of chairs from 24 to 20."

On economy:

"Mr Almunia indicated that there is a high probability that because of the crisis the euro area will suffer a potential permanent loss of future growth."

"Potential output in the euro area could fall from 2.2 percent to less than 1 percent in 2009 to 2010. The loss will be all the greater if the determined corrective measures of governments are not strong enough."

On deflation:

"Despite the general fall in prices in June, it would be totally erroneous to infer that we are on the brink of deflation in the euro area."

"The negative inflation can be explained by the current recession and secondly by the base effects with which we are familiar -- oil and food prices in this connection -- but we think that the low level of ... prices is a transient phenomenon, there will be an increase."

"There is no risk of deflation ... The fall in prices is good for households' purchasing power."

GERMAN FINANCE MINISTER PEER STEINBRUECK

"It's not probable that the U.S. dollar will lose its leading role as a currency worldwide."

"Some countries are in favour of those (IMF) special drawing rights as another worldwide currency. We have to watch and analyse what other countries are going to favour but I think the dollar will hold its leading role."

"I guess the yuan will gain a more significant role slowly, and the euro too."

On procyclical effects of crisis for banks:

"We will discuss this. If there is no agreement, we will ask the European Commission to submit an analysis. Together with my French colleague (Christine Lagarde) I have written a letter today to (European Internal Markets) Commissioner Charlie McCreevy to increase pressure on the ISAB in particular to ensure that we get a collective playing field with the United States as far as the procyclical effects of accounting rules are concerned -- and that American banks aren't treated better against the backdrop of what is going on there. This is very important to us."

Asked whether loosening capital requirements might not risk creating a further credit-fuelled bubble, he said:

"We need to make a distinction between the instruments we need now to get out of the crisis and the instruments we need to avoid a crisis of this severity in the future."

On available credit:

"We have no credit crunch at a macro-economic level at the moment, but we do at a micro-economic level in some quarters. But it may be that this issue will become much more serious as the year progresses. And we need to be ready for that."

AUSTRIAN FINANCE MINISTER JOSEF PROELL

On prospects for Lufthansa tie-up with Austrian Airlines:

"Due to the economic situation and the acute situation on the air traffic market, it is clear from an Austrian perspective and as the owner of AUA that we want a quick solution in the next few weeks."

BELGIAN FINANCE MINISTER DIDIER REYNDERS

On budget balance:

"We will look at how to coordinate stimulus plans on the one hand and the capacity to reach budgetary balance in the medium term."

On whether France and Germany are falling behind on fiscal policy:

"We want everyone to be on the same page to continue this year and next with stimulus, but to fix clear aims for budgetary balance thereafter."

On German proposals to relax temporarily capital requirements for banks:

"For now what we are trying to look at are measures which can help the recovery in 2009 and 2010. We will see. This is one proposal among others. We must not lose sight of the fact that the real debate for the euro group is to try and define the conditions for the return to budgetary balance and in what timeframe."

On banks:

"We must pay attention to the situation in the banks, not only in our country but in all members states of the euro group and outside the euro zone."

Asked if euro zone banks are stable, he said: "It's coming but it's not the case now."

"We should try to have more and more capacity for the companies to have more credit."

"We must pay attention to the situation at banks not only in one country but in the whole euro zone."

SPANISH ECONOMY MINISTER ELENA SALGADO

"Economic growth in positive terms is not so easy to achieve this year in the whole EU. We'll see some signals, but economic growth will start next year."

EU MONETARY AFFAIRS COMMISSIONER JOAQUIN ALMUNIA

On economy:

"I think there are some positive signals but at the same time, still the situation is worrying."

On stimulus:

"No, it's not about stimulus. Stimulus is being implemented. It's about fixing the financial system, it's about regaining confidence, it's about consolidating imbalances."

On bank stress tests:

"These stress tests are being carried out at national level. These are national exercises. The question is that when capital is needed the private sector ... should provide capital for banks."

On whether to publicise stress tests:

"It's a possibility. In any case, with or without publishing the stress tests, transparency is very important."