(Updates after talks, adds Juncker comments)
BRUSSELS, Jan 21 (Reuters) - Euro zone finance ministers confirmed Dutch Finance Minister Jeroen Dijsselbloem as president of the Eurogroup on Monday, at a meeting where they also discussed possible financial support for Cyprus, with a decision on that aid possible in March.
Following are comments from ministers and officials after the talks:
"It went without friction. Jeroen was elected as new president of the Eurogroup. I think this decision is very good, I supported his candidacy.
"I told him we should... have a fundamental debate on the workings of the Eurogroup outside of the normal routine and discuss where we have differences of opinion and where we don't.
"Of course we all thanked Jean-Claude Juncker with conviction and you will only be able to tell with a bit of distance what the man did for Europe and for the Eurogroup in these years and with what big and tireless engagement for Europe he worked to get joint solutions for Europe."
"The vote for Mr Dijsselbloem was not unanimous.... There was no debate, but the Spanish colleague then said that Spain would not agree, but that was not a big deal. It's just not a unanimous decision."
"...It is clear we're quite a distance away from being able to make a decision. The (EU/IMF) troika still has to make a range of proposals.
"Cyprus has a completely oversized banking sector compared to its GDP and therefore it will not be possible without a drastic reduction of the financial sector.
"We drew up terms of reference which say nothing is decided yet, but that in any case we are demanding a stronger surveillance of money laundering.
"Of course we would also like to demand and implement stronger transparency on tax fraud.
"We all agreed there will not be substantial consultations or decisions before the presidential elections. Short-term financing is secured so that one doesn't need to get nervous and nobody has to create uncertainty.
"The troika does say that an uncontrolled development in Cyprus could cause a risk not just for Cyprus, but for Greece, and the stability of the euro zone as a whole.
"I pointed out that we have to justify that very clearly as that's what the treaty says and we do need to stick to the rules we agreed in the treaty."
"We will be true to our responsibility to the euro and the stability of the euro but it must be clear one can't just transfer the rules of the previous programmes."
"On Greece, we noted that everything is progressing as we decided in December. So we can agree the payment of the next tranche after the fulfilment of the milestone of the income tax and we especially welcomed Greece's announcement that there would be another tax reform in May, so the process of implementation is progressing step-by-step."
"I pointed out that we must stay strictly with what was agreed in the ESM treaty, that not every bank can have access to the ESM, but that it must remain under the other conditions of the treaty.
"Only once the banking supervision works dependably, a banking recapitalisation is possible that doesn't count towards sovereign debt.
"But one must put a brake on expectations that go further than that. That would completely overburden the ESM. It would be empty rather quickly and anyway, the ESM must remain lender of last resort, so the member states themselves must take responsibility.
"And anyway to make progress, we first need the resolution mechanism, so we don't even have all the preconditions. And first of all we have to implement the laws surrounding the ESM. There is progress but not as fast as some are trying and I reminded people that we should not repeat the mistake of creating expectations that we know are not realistic."
"It is true that Spain was not supporting this appointment."
"I didn't think that this will lead to dramatic consequences."
"We welcomed the progress which has already been made by Cyprus in implementing some of the important measures on which the (EU/IMF) troika and the Cypriot authorities are in agreement."
"We also assured that Cyprus' short-term financing needs are covered. On this basis, we considered that a targeted agreement on a programme after the upcoming national elections in Cyprus would best facilitate national ownership.
"We expect therefore that final agreement on a programme could be reached as of March....
"We call on the troika and the Cypriot authorities to make progress in the interim towards finalising the building blocks of the draft memorandum of understanding."
Following are earlier comments from ministers and officials ahead of the talks:
"You know that I supported Jeroen Dijsselbloem's candidacy from early on, because I believe he would make a good head of the Eurogroup. And I find it good - the proposal from my French colleague - that we use the change in Eurogroup head as an occasion to lead a fundamental debate about the working methods of the Eurogroup. I don't think the head, who will be elected, should give government policy statements, that's a different function. ... What Jeroen Dijsselbloem proposed on that is an important contribution."
"We will wait for the (EU/ECB) troika report. So far we have received no proposals from them on this or on anything else.
"We'll see today but indeed, the ESM treaty says that a danger to the stability of the euro zone as a whole is a precondition that has to be fulfilled.
"I don't think that we will come to a decision on Cyprus in a short time. I also don't think that's necessary. In any case, the relevant institutions have to make their statements and the preconditions have to be fulfilled or we can't decide."
"Spain defends the retroactive character (of recapitalisation), because it was something that was concluded in the European Council last year.
"For Spain, more than the concrete question of recapitalisation... the main thing here is to send a signal that we are progressing, that we are progressing in everything to do with banking union.
"We had the important agreement on the single banking regulator at the end of last year, and this year we must press ahead with the other pillars of banking union."
"I hope the hard currency policy the Dutch have had so far will remain and that we can rely on this just as we have relied on it in the past."
"That will not happen so quickly. First, the joint supervision must happen, then there must also be a common insolvency law and then you must also have a solution for the deposit guarantee scheme."
"The right of intervention and insolvency law and also deposit guarantees are part of the total concept. We cannot pile all burdens on the net contributors, even when the states in difficulty wish that it would go quicker."
"I don't see any of this being complete. You can't see that just because of an agreement on joint supervision there can be direct recapitalisation.
"It will not happen without conditionality and involvement of the states, because once there is a problem and we have to help with solidarity, we have to insist on reforms, otherwise there will be a moral hazard."
"Further restoring the trust in the euro and the euro zone and the economic perspective for the countries, that is the main task at hand.
"There seems to be a new basis, a new basis for trust and we have to work to announce it, to strengthen it and to build new growth and jobs on that basis of trust, that is, in as short as I can say it, what is to be done in the Eurogroup."
"We are in a process and that process takes a little bit of time."
"It's been known to take longer and therefore with patience we will get there."
"We cannot resign ourselves to Europe being in a spiral of austerity and recession. Jean-Claude Juncker knew during his period as head of the Eurogroup about representing a balanced presidency, balanced between the countries in the north and in the south, between the requirements of budgetary consolidation and hopes of growth, balanced also between perhaps a vision from Germany and from France.... That's what I expect from his successor."
"Another point which is very important is the direct recapitalisation of banks by the European Stability Mechanism (ESM)... I attach much importance to this. With this we can progress towards the safeguarding of the banking system." (Reporting by Annika Breidthardt, Adrian Croft, John O'Donnell, Robert-Jan Bartunek, Ben Deighton, Leigh Thomas and Philip Blenkinsop; compiled by Rex Merrifield)