HIGHLIGHTS-Comments from euro zone finance ministers, officials

Mon Dec 3, 2012 3:50pm EST

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(Updates with Juncker on Ireland, Portugal)

BRUSSELS Dec 3 (Reuters) - Euro zone finance ministers met on Monday to discuss the terms of a Greek debt buy-back and review a Cypriot bailout.

Monday night's Eurogroup meeting of euro zone ministers and officials will be followed by an Ecofin meeting of EU finance ministers on Tuesday, expected to discuss proposals for a single supervisory mechanism for banks.

Following are comments after the talks on Monday evening:

EUROGROUP PRESIDENT JEAN-CLAUDE JUNCKER

ON POSSIBILITY OF PROVIDING SAME CONDITIONS TO IRELAND AND PORTUGAL AS GRANTED TO GREECE:

"When I was mentioning equal treatment (for Ireland and Portugal) I was referring to the decisions we have taken last week, and I don't think that the Eurogroup is prepared to give an equally similar treatment to these two countries when it comes to the detailed decisions that have been taken as far as Greece is concerned.... But we'll take this under examination. But this is not an indication that anything will change."

ON AID FOR SPANISH BANKS:

"The implementation of the programme is well on track, meeting all required conditionality steps as enshrined in the memorandum of understanding. We have also welcomed the decision by the ESM (bilout fund) board of directors to authorise the first tranche of the programme of up to 39.5 billion (euros). The disbursements will be made in mid next week."

ON NEXT DISBURSEMENT TO PORTUGAL:

"Provided the authorities persevere with strict programme implementation, we reaffirmed our commitment to support Portugal until full market access is regained.

"Following the conclusion of this review, which we expect shortly, Portugal will receive 2.5 billion (euros) in January -- 2.5 billion that means 1.6 billion EFSF/ESM and 0.9 billion from the IMF."

ON FINANCING FOR CYPRUS:

"The Eurogroup will discuss the interim results of the due diligence exercise on the capital needs of the financial sector and its implications for programme financing on Dec. 13.

"I call on Cyprus and the EU/IMF troika to conclude on the proposed terms of a programme in order to reach agreement on an adjustment package in a timely manner."

ON PRESIDENCY OF EUROGROUP:

"I informed colleagues (of) the intention I announced when my mandate was renewed back in last July that I will step down from the presidency of the Eurogroup by the end of this year/beginning of next year. And I asked them to do everything possible to appoint another minister as chair of the Eurogroup."

EUROPEAN BAILOUT FUND CEO KLAUS REGLING

ON MOODY'S DOWNGRADE OF ESM PERMANENT BAILOUT FUND:

"Moody's action as you know followed an equivalent change of France's long-term rating the week before. I explained to the ministers that at the ESM we were unable to understand why the agency changed the ESM's rating, while Moody's actions on the EFSF (temporary bailout fund) is easier to understand, as it follows more or less automatically the downgrade of one of our AAA guarantors.

"In my view the rating agency did not sufficiently take into account the ESM's strong institutional framework, the clear political commitment of all 17 euro area member states and the ESM's very robust capital structure, with a paid-in capital of currently 32 billion euros, and as you know this will grow to 80 billion euros in 2014, and with the preferred creditor status of our loans, the ESM can claim to have a very strong situation and really an unparalleled strength among the world's multilateral lenders."

Following are comments before their talks on Monday evening:

SPANISH ECONOMY MINISTER LUIS DE GUINDOS

ON SPANISH BANK RESTRUCTURING AND CONDITIONS ON AID:

"Following what been established in the memorandum of understanding, we got the green light last week for the bank restructuring and today we asked formally for the 37 billion euros in funds from the ESM (bailout fund), with a 12-1/2 year maturity with a grace period of 10 years and an interest rate that is clearly below 1 percent and at least in the first year, will be just above 0.5 percent.

"We believe these are advantageous conditions, that will help heal, restructure and overcome the problems in the Spanish banking system. It's positive, it's fundamental, it's vital and we won't make the mistakes of the past. The money will be in the FROB (Spanish 'bad bank') from around Dec. 12 and can be injected into the four nationalised banks."

"Some savings banks that haven't been nationalised have presented their own restructuring plans and will be approved by the end of December and they will need a lot less, around 1.5 billion euros at most."

AUSTRIAN FINANCE MINISTER MARIA FEKTER

ON REDUCING GREECE'S DEBT:

"...Greece still has to make an effort and live up to its obligations. It cannot hope that there will be a debt cut and it doesn't have to do anything anymore. On the contrary.

"I personally like models which have also been discussed to give incentives to Greece. For example, if it achieves a higher primary surplus than planned, we could think of an interest cut for example. That would be an incentive for them to make an effort and still help them."

GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE

ON SIMILAR CONDITIONS FOR PORTUGAL AS THOSE SET FOR GREECE:

"I wouldn't advise Portugal to consider such a step, because I would shy away from the comparison with Greece if I were another member state in the euro zone, because Greece is a unique case.

"That's why I have heard about such considerations neither from Portugal nor from Ireland. Secondly, we have lowered the interest for bilateral loans to Greece.

"For Ireland and Portugal there are no such bilateral loan programmes, so there is no possibility to transfer (the conditions)... within the EFSF (temporary bailout fund) so far we have mainly envisaged a 10-year pause to the interest payments from Greece, which means mainly that the EFSF loans run longer...

"For Ireland and Portugal, which are in the process of returning to the markets step-by-step it would be a disastrous sign and that's why I would really advise them not to further follow this point."

ON BANKING UNION:

"I hope, but I cannot be sure, that we will agree on a mandate at the Ecofin."

ON BANK RECAPITALISATION VIA THE ESM BAILOUT FUND ONCE BANKING UNION IS OPERATIONAL:

"The assumption was that when it came to banking supervision, as soon as it was functional, there would be a requirement, a separation between public funding and banking through direct bank recapitalisation, with a further requirement when it comes to the ESM.

"Those were the points agreed, and there would be a request submitted for bank recapitalisation submitted by the state concerned and there would be an adjustment programme that would be agreed with that member state, and I don't think that that is something you can sideline."

"I think it is important to bear in mind the issue of pace, the capacity of the ESM when it comes to the direct recapitalisation of banks.

"If you're talking about moving forward really, really quickly, well I don't think so. It's like if you look at snow melting, it's not going to melt that quickly, not in the Alps, not in the Pyrenees.

"You have to remember the capital available to the ESM, the payments that will be made available up to 2014. Look at the banking crisis of 2008. Look at what we learned from that, the experiences from that.

"In Germany, when it came to the scope for bank recapitalisation, the scope was the same in that year and if you look at the ESM, the capital that is available for banking recapitalisation is basically a firewall, a stabilization that is not available to member states, so it is important not to have expectations that are all too high."

FRENCH FINANCE MINISTER PIERRE MOSCOVICI

ON SAME CONDITIONS FOR THE BAILOUTS OF PORTUGAL AND IRELAND AS GIVEN TO GREECE:

"On Portugal and Ireland, my answer is the same as Mr Schaeuble's. The situation is not the same, I definitely don't believe that one should not try to copy the solution earmarked for Greece.

"For Ireland and Portugal, the plan is well under way, it is being implemented as planned with a possible return to the markets, so that is a completely different context and one that the countries are completely able to achieve."

ON SUCCESS GREEK DEBT BUYBACK:

"I have no particular anxiety about this.

"It will depend on the will of the Greek authorities and how good their advice is and for bodies that have been dealing with virtual debt selling at 30 percent of the original, this is not too unlikely.

"This is something we have gone into together and (IMF Managing Director Christine) Lagarde was there on Friday and I had talks with her and she was fairly optimistic about it. It just has to be very quick. We have until Dec. 13 for deciding on a payment but I think we have been realistic." (Reporting by Jan Strupczewski, Robin Emmott, John O'Donnell, Annika Breidthardt and Robert-Jan Bartunek; compiled by Rex Merrifield)

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