HIGHLIGHTS-Euro zone finance ministers, officials

LUXEMBOURG, June 20 (Reuters) - Euro zone finance ministers and officials met on Monday to discuss the bailout funds intended to provide help for EU members countries in financial difficulty.

Following are highlights of their comments after the talks:

IMF ACTING CHIEF JOHN LIPSKY

ON NEXT TRANCHE FOR GREECE:

"For a successful review of the existing programme with Greece, which means approval of a new disbursement, it requires the IMF's executive board to conclude that the programme is on track and that it is financed."

"On track means that the Greek authorities have agreed on a package of measures that... would put the programme on track."

"We will all require assurances that the programme is financed and that involves assurances from our Eurogroup partners that adequate finance is available. That needs to be done before we can move forward and we are hopeful that those conditions will be met with alacrity."

ON A NEW PROGRAMME FOR GREECE:

"We are discussing the existing programme and what is needed to put it back on track. We are not negotiating a new programme. There always exists that possibility, but there has been no request from the Greek authorities to negotiate such a new programme. We are concentrated today on the existing programme and what is needed to put it back on track, and to therefore allow the next disbursement under that programme."

ON MODIFICATIONS TO EXISTING GREEK PROGRAMME:

"We all know that the starting position of the Greek economy... was exceedingly difficult...

"In those circumstances, not only given the situation in Greece itself, but the situation of the global economy, it's almost inevitable that there will need to be what I call mid-course corrections in a programme like this.

"In this case, the mid-course corrections are not trivial. We could list a whole host of reasons, but it is easier simply to focus on what is needed to be done to put it back on track. and that is this very ambitious set of policies that the Greek authorities have decided to embark upon and that will be contained in the legislative package that moves forward."

KLAUS REGLING, HEAD OF EUROPEAN FINANCIAL STABILITY FACILITY (EFSF)

"The potential lending capacity (of the EFSF) will be raised to 440 billion euros. This will be done by raising the guarantee amount, the sum of all the guarantees from the euro area member states, from 440 billion euros today to 780 billion euros in the future, and second, by raising the over-guarantee, which at the moment is 120 percent. That will be raised to 165 percent. By raising the over-guarantee, we will make the EFSF more efficient, we can eliminate the cash reserve, and therefore also the over-borrowing which was necessary as a credit enhancement to protect bondholders and to obtain a AAA rating."

EU ECONOMIC AND MONETARY AFFAIRS COMMISSIONER OLLI REHN

ON PRIVATE SECTOR INVOLVEMENT IN GREEK PROGRAMME:

"We also made progress on the discussion on the content and the conditions of aid, next steps for Greece and the nature of private sector involvement. I note an increasing convergence of views on aid, (a) Vienna-style initiative that would not lead to a credit event or a selective default to be a worked out in a full agreement with the ECB.

"The rescheduling of bonds would be on a voluntary basis.

"Now a great deal of responsibility, or I should say the greatest deal of responsibility, lies on the shoulders of the new Greek government and also all Greek political leaders and parliamentarians since the approach to restore debt sustainability (for) Greece (is) finally the responsibility of all forces."

ON GREEK TIMELINE:

"...We have a technical mission on Tuesday/Wednesday in Athens together with the ECB and the parliament, to put the last touches to this memorandum, which will be the basis of the parliamentary vote by the end of June in Athens."

"On the basis of the decision of the Greek parliament and the EU/IMF troika's compliance report, the Eurogroup will verify that the conditions have been met in its meeting on July 3."

ON IRISH AND PORTUGUESE PROGRAMMES:

"Ireland's programme is fully on track, including the process of bank restructuring and recapitalisation, which are progressing well.

"And in Portugal the parties that will share power and form the government are fully committed to implement the EU/IMF programme from day one in office.

"In fact, both in Ireland and in Portugal, there is a relatively broad cross-party consensus on the need to reform the country and to use the programme for that purpose."

EUROGROUP CHAIRMAN JEAN-CLAUDE JUNCKER

ASKED HOW GREECE COULD PRIVATISE A BIG COMPANY EVERY 10 DAYS UNDER THE PRIVATISATION PLAN:

"They will have to do so."

ON SITUATION FACING THE PEOPLE OF GREECE:

"This is something that affects me greatly. You look at the reaction of the people on the streets. You see they are rebelling. I understand that and I'm touched by that. ...That is happening in Greece but it is also in other areas of Europe that there is a feeling of social inequity. That is a feel that is very contagious.

"There is no other choice than fiscal consolidation in Greece and in other fiscally weakened countries. But I do understand that the Greek people need to see hope on the horizon. ...We are talking about individual human beings here and their aspirations. We have to listen to the message that we are receiving from the streets of Greece."

ON GREEK DEBT:

"It is clear that the debt is sustainable, but the debt will only remain sustainable if Greece fulfils all its commitments which it agreed with the (ECB/EU/IMF) troika."

"It is absolutely clear that no pressure will be put on the financial institutions, so as to avoid a Greek selective default. Voluntary means voluntary."

"The approval of the Greek parliament is absolutely essential and it will have to arrive in a timely fashion so we can take decision on July 3."

ON THE EUROPEAN STABILITY MECHANISM (ESM)

"The 27 governments agreed on the treaty between the ministers of the euro zone establishing the ESM with the detailed characteristics which were defined by the European Council at the end of March. Each finance minister is going to sign in next few days this treaty to allow national ratification very quickly, so that it can come into effect in 2012."

"So the ESM will have paid-in capital and capital which can be called up and capital which will be provided by the euro member states. It will have 50 billion euros effective capital and that will be supplemented by the IMF. Member states not members of the euro zone can participate on an ad hoc basis and we will be examining regularly whether the extent is sufficient.

"It will not have preferred creditor status as regards countries that are already in a support programme... It will make it easier for them to come back to the market."

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Following are highlights of their comments before Monday's talks:

AUSTRIAN FINANCE MINISTER MARIA FEKTER

ON SITUATION IN GREECE:

"The Greeks (informed us) that they are changing the package that the troika (ECB/EU/IMF) agreed with the previous government. There will be new decisions by the Greek government that we don't know yet. Once we know them, we will have to reassess and the IMF will also give a new assessment. That will be at the start of July and therefore no complete decision was taken.

"But it is clear from the paper we agreed that we are all working to avoid a Greek bankruptcy.

"Time is running out. But we have wait for the decisions of the Greek parliament to be able to assess whether the Greeks can meet the obligations that the troika agreed with them."

ON GREEK REFORMS AND AUSTERITY:

"It is about the nature of privatisation, tax collection. It is also about an improvement of the administration. We have signalled to him (the Greek finance minister) that we will give time for these decisions and negotiations. He also asked for technical help ... In relation to privatisation ... and he will receive it."

EU ECONOMIC AND MONETARY AFFAIRS COMMISSIONER OLLI REHN

ON NEXT TRANCHE FOR GREECE:

"Last night the ministers took the expected decision to confirm the conditions of the next disbursement of the EU-IMF loan in time in early July for Greece.

"The key condition is that the Greek parliament needs to endorse the medium term... and the privatization programme before the end of June. Once this is done the disbursement will be done in time..."

ON CONCERNS ABOUT CONTAGION TO OTHER EURO ZONE COUNTRIES:

"I am concerned of potential contagion and that's why we are now taking the decisions on the next disbursement, which is conditional to the Greek parliament voting in favour of the medium term fiscal stabilisation.

"That's why today the ministers, I trust, will take the decision on the finalisation of the treaty on the European Stabilization Mechanism (ESM) and on the reinforcement of the effective lending capacity of the EFSF (European Financial Stability Facility)."

ON THE ESM:

"I trust the content of the treaty will be finalised so that it is ready for signature by heads of state and government when they deal with this issues.

"Also, there is going to be a very important discussion in the Ecofin council today on economic governance on the legislative package on economic governance."

ASKED ABOUT POSSIBLE DANGER TO THE EURO:

"The euro is a stable currency, there is a crisis in Europe which is a crisis of some countries and their sovereign debt. Now it's essential that they will take the necessary measures to overcome the crisis, as we did last night in terms of confirming the conditions of paying the... disbursement in early July for Greece. The euro is safe."

ON GREEK AUSTERITY AND REFORM MEASURES:

"I'm certain that Greece will be able to take the decisions needed, because the alternative is so much worse for Greece, default is so much worse for Greece.

"Therefore it is in the interests of Greece to now work in favour of the package and thus avoid default."

SPANISH ECONOMY MINISTER ELENA SALGADO

ASKED ABOUT ANY RISK OF CONTAGION FROM GREECE TO SPAIN: "It would have been good to reach a more immediate agreement but I think the markets make a difference (between Greece and Spain)...and thus I don't think there is any risk."

BELGIAN FINANCE MINISTER DIDIER REYNDERS

ON GREECE:

"We are increasing the pressure because there are precedents, such as false statistics. We have to be sure that everyone is going to support the plan."

"We are waiting for a decision from the Greek parliament. We are calling for not just the government, but the Greek opposition to support the plan. If that is done, they will have not just their 12 billion euros by mid-July, but also a solution for the coming years."

ON G7 FINANCE MINISTERS' CALL OVERNIGHT:

"(The idea was) to have a good participation of the IMF in this process and also to ensure the participation of the private sector."

"It's a very sensitive issue and we need the participation of all partners."

ON NEXT TRANCHE FOR GREECE:

"The IMF agrees on the next tranche (for Greece) but we need to have a very clear programme for the next years.

"It is possible to see a default. We have seen three years ago such a bankruptcy in an American bank, Lehman Brothers, but we have also seen the consequences of that. So we will organise a process so as not to have a default in Greece.

"It is the reason why we have organised yesterday the first discussion on private sector involvement and we will do that on a voluntary basis and then we are asking not only the government but also the opposition in Greece to take the necessary measures. And that is the most important thing maybe, like a few weeks ago in Portugal."

ON SITUATION IN GREECE:

"I said since the beginning, like others, to give more time, but the first responsibility is with Greece. It is only possible to give more money and more time if we have clarity about the sustainability of the Greek debt. So we will see if it is possible to receive the support not only from the government, but maybe also the opposition in Greece, like in Ireland and Portugal. It is a national necessity.

ON EUROPEAN BAILOUT MECHANISM:

"We will have a new programme for Greece. That is for Greece. For the medium term, we need to organise something else in Europe -- the European Stability Mechanism. But if you ask me, I want to go further, I want to have Eurobonds, I want to have a real European treasury, maybe a European minister of finance as suggested by Jean-Claude Trichet. But it is not for the beginning of July, it is maybe for later."

GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE

ON "SUBSTANTIAL" ROLE OF PRIVATE SECTOR:

"We have to talk about that now, with all institutions involved. It's a fine line. On the one hand it has to be voluntary, because otherwise there will be consequences, but on the other hand it must also lead to a result. We will continue to work on that."

"Everyone has an interest in us managing this situation well. Therefore I'm confident that we will reach a good result in this way."

ON FIFTH AID TRANCHE TO GREECE:

"We are not making Greece wait. Greece itself must create the conditions so that the next tranche can be paid out as agreed. That's due in July. It is Greece's responsibility that we're having difficulties now.

"Greece has to make the necessary decisions. They are difficult decisions. We know that, and I said that in the Bundestag. We also have to have respect for Greece's difficulties but we cannot spare Greece these decisions. And therefore we said clearly: If Greece ... fulfils its obligations we will be able to set the conditions that the next tranche can be paid out as agreed."

(Reporting by Daniel Flynn, John O'Donnell, Annika Breidthardt, Julien Toyer and David Brunnstrom)