BRUSSELS (Reuters) - Euro zone leaders met for an emergency summit of the 17-nation currency area on Thursday, to discuss a second bailout package for Greece and the financial crisis in Europe.
Following are highlights of their comments after the talks:
GREEK PRIME MINISTER GEORGE PAPANDREOU
"All will go to waste if we don't continue with our reforms program, Greece will change."
"We concluded a tough, difficult negotiation. Today Europe took significant decisions not only for Greece but for the euro zone as well."
"Today's decisions guarantee the sustainability of Greek debt, secure the country's borrowing needs up to 2020."
ON GREEK BANKING SYSTEM:
"The provision of liquidity to the banking system is fully assured. Private sector involvement is very large and voluntary. How it will be rated is a secondary issue, when the ECB has vouched for the Greek banking system's needs."
"This decision which we also took gives a clear signal ... that there's a very strong message of support to the banking system -- not only the European banking system but also the Greek banking system. This is for financing, for liquidity, for capitalization, in the end strengthening the Greek banking system."
ON EURO ZONE BONDS:
"We have put forth the issue of euro zone bonds as a basic parameter for European unification. We are not there yet, but we are getting near."
ON GREEK PACKAGE:
"We now have a program and a package of decisions which create a sustainable path for Greece, a sustainable debt management for Greece.
"And this in the end of course will mean not only the funding of a program but it will also mean the lightening of the burden on the Greek people."
EUROPEAN CENTRAL BANK PRESIDENT JEAN-CLAUDE TRICHET
ON POSSIBILITY OF SELECTIVE DEFAULT:
"At the present moment to my knowledge no such decision has been taken. And again it is not a decision I want to prejudge in any respect. We will see what exactly happens... In any case we have a voluntary private sector involvement as we have required."
ON POSSIBILITY OF CREDIT EVENT:
"On the credit event, I don't think that the experts that have looked at it consider that what has been decided today would trigger a credit event. We said no, we continue to say no. It is not something I would consider in the cards."
ON EUROPEAN FINANCIAL STABILITY FACILITY (EFSF):
"The significantly enhanced flexibility in the use of the EFSF, including the intervention in secondary markets that we had asked for is warranted by exceptional financial market circumstances and risks to financial stability."
ON COLLATERAL AND PRIVATE SECTOR:
"We take note of the fact that the governments are supporting the new program for Greece with a voluntary contribution of the private sector...
"The Governing Council had made clear that it could only accept collateral from sound counterparties. We do not prejudge at this stage what will happen to the Greek collateral. In any case we accept that euro area governments will have to provide if needed the Eurosystem with credit enhancement."
"The decision of members states and of the Commission to mobilize all resources necessary in order to provide exceptional assistance to help Greece in implementing its reforms is very, very important."
ON PRIVATE SECTOR INVOLVEMENT IN GREEK PLAN:
"What is important in our view is the recognition that Greece is an absolutely exceptional situation and that for that reason it requires exceptional and unique solutions, but that all other euro zone countries have confirmed solidly their inflexible determination to honor fully their own individual sovereign situation."
ON DEBT SUSTAINABILITY:
"I welcome first the reaffirmed commitment of the euro zone heads of state and government to ensure financial stability in the euro area.
"The agreement... is crucial in our analysis to foster sustainable economic growth, to stabilize public finances. Strict and rigorous implementation of the program is key to ensure public debt sustainability in Greece."
IMF MANAGING DIRECTOR CHRISTINE LAGARDE
ON STEMMING THE CRISIS:
"There was definitely a collective determination. They were all together driven by the desire to keep it together and to make sure they had the tools to actually resist. That was a bit of a first, if I may say."
ON THE EUROPEAN FINANCIAL STABILITY FACILITY (EFSF):
"The other key element in the view of the IMF is the fact that the member states have decided to make the financing instruments much more flexible..."
ON IMF ROLE IN GREEK PLAN:
"We go away with a much more solid view of the confidence that the euro zone members have in their own destiny."
"Clearly the International Monetary Fund is going to participate in this process. This is not a done and final deal. As you know the IMF has its rules. Clearly there is no new program unless and until that program has been requested by the country in question. Greece has not yet at this point in time requested a program."
"It is clearly the intention of the International Monetary Fund to be an active participant in this program going forward with a view to clearly restoring growth, making sure Greece can return to markets and that there is a significant improvement of its debt sustainability."
EUROGROUP PRESIDENT JEAN-CLAUDE JUNCKER ON PACKAGE FOR GREECE
"My main request today was to say we would need today a comprehensive, global answer and that my expectation would not be that we come back to Brussels on a monthly basis to present little packages.
"We have to be not behind the curve but ahead of the curve.
"It is the final package."
ON POSSIBILITY OF SELECTIVE DEFAULT:
"That's not our decision. That's the decision on assessment to be the rating agencies. It is not up to us to give an assessment. But in the case it would happen, we are prepared, the ECB is prepared to give adequate response, so financing of the Greek sector will be guaranteed."
ON GREEK BANKS:
"Greece is in financial security. We did everything to reduce the level of Greek public debt.
"We are sure of the fact that financing of the Greek banking sector is assured for the coming months and there is no reason for our Greek friends to take their money out of Greek banks. Money in Greek banks is in good hands..."
FRENCH PRESIDENT NICOLAS SARKOZY ON POSSIBILITY OF SELECTIVE DEFAULT:
"Greece will pay back its debt. We are acting strongly to decrease the interest rates... afterwards if there are reactions from credit ratings agencies, the states will face up to it with guarantees for private banks which make new loans to Greece and guarantees for the ECB which will continue to intervene."
"The states will guarantee the ECB, which will continue to buy Greek debt, and we will guarantee private banks, which will not need to abandon Greek debt because we will guarantee new loans."
ON REFORM OF THE EUROPEAN FINANCIAL STABILITY FACILITY (EFSF):
"For private loans, the average rate will be 4.5 pct over the next 10 years. That is a reduction of Greece's debt of around 12 percentage points. So we have a reduction of 12 percentage points from the decisions we have taken on the European Monetary Fund and 12 percentage points from the voluntary participation of the private sector.
"The private sector will commit 135 billion euros of financing over 30 years."
ON REFORM OF THE EFSF:
"We have agreed to create the beginnings of a European Monetary Fund."
"To support a country in difficulty, this fledgling European Monetary Fund will be able to help a state to recapitalize its banking sector in a case of difficulty and the EFSF will be able to intervene on the secondary market when the European Central Bank judges that the market is failing."
ON LOWER RATES FOR EFSF LOANS:
"It was necessary to alleviate this debt burden. The strategy is a strong decrease in the interest rates of the European fund on Greek debt ... The Fund will lend at a rate of between 3.5 and 4.0 percent. That represents savings for Greece from the simple lowering of interest rates of the order of 30 billion euros over the next 10 years."
ON EURO ZONE ECONOMIC GOVERNANCE:
"The issues of the guidance of the euro group by the heads of state, the powers of the euro group, the question of the appropriateness of a European credit ratings agency, these are subjects on which France and Germany will make proposals before the end of August, and which will clarify our vision of the future of the euro zone."
"This European Council is dedicated to the solution that we wish to bring to the Greek crisis. But from now to the end of the year, (German) Chancellor Merkel and myself will make common proposals on the economic governance of the euro zone and (EU Council) President Von Rompuy will make proposals in October on governance."
DUTCH PRIME MINISTER MARK RUTTE
"I am happy that today we decided on a comprehensive package with strong conditionality, more flexibility, and substantial private sector involvement. We have thus sent a clear signal to the markets by showing our determination to stem the crisis and turn the tides in Greece, thereby securing the future of the savings, pensions and jobs of our citizens all over Europe.
"It is positive that all of the Eurogroup leaders now acknowledged the urgent need to bolster our economic governance and prevent future crises. It is imperative that we complete negotiations with the European Parliament as soon as possible."
GERMAN CHANCELLOR ANGELA MERKEL
"This was a meeting in tough times, in which all of us in Europe are facing a challenge. The euro zone states have shown that they are able to take this challenge, that they are able to act."
"We have reached an important stage today, have made a significant step on the way to two goals: stabilizing Greece sustainably to help it get out of indebtedness, and by putting on the agenda the topic of improving Greece's competitiveness.
"We will deploy 20 billion euros from the EFSF and will reach a debt reduction of 12.6 billion euros with that."
ON POSSIBLE RATING AGENCY ASSESSMENTS:
"The rating agencies will look at all of this. In that sense I can't say anything on the rating agencies' evaluations."
EUROPEAN COMMISSION PRESIDENT JOSE MANUEL BARROSO
"This is the first time since the beginning of this crisis that we can say the politics and the markets are coming together. We have now a very credible package."
ON LOWER INTEREST RATES, LONGER MATURITIES:
"The lowering of interest rates and extension maturities are an essential element of this package. This is true of public support and private sector involvement."
"It of course is a two-way street. (Greek) Prime Minister Papandreou gave in very clear terms his assurances in this respect."
ON PRIVATE SECTOR INVOLVEMENT:
"We are now are clear about what we mean by PSI and to whom it applies... It is a solution with the markets, not against them."
"We are crystal clear that PSI is for Greece and Greece alone. It is an exceptional situation that we exclude for others."
ON EUROPEAN FINANCIAL STABILITY FACILITY (EFSF):
"We are lowering the lending rates, extending the maturities and allowing it to do more, including intervention on the secondary markets... This means we will be in a position to act when damage is threatened, unlike before."
ON LIQUIDITY SUPPORT FROM EUROPEAN CENTRAL BANK:
"There can be no comprehensive solution to the sovereign crisis without the full support of the ECB and the Eurosystem and we have this today."
"Finally we also endorsed the plan of reducing overreliance on external credit ratings... We will come forward in the autumn with further proposals."
EUROPEAN COUNCIL PRESIDENT HERMAN VAN ROMPUY
ON PRIVATE SECTOR INVOLVEMENT:
"Importantly we have changed the approach of PSI, public sector involvement will be limited to Greece and Greece only."
ON CRISIS RESPONSE:
"I am glad to announce that we found a common response to the crisis situation."
"We improved Greek debt sustainability, we took measures to stop the risk of contagion and finally we committed to improve the euro zone's crisis management."
"I convened this summit of heads of state of governments of the euro zone because the situation was really grave."
(Reporting by Julien Toyer, David Brunnstrom, Daniel Flynn, Christopher Le Coq, Jan Strupczewski, Philip Blenkinsop and Charlie Dunmore in Brussels, Annika Breidthardt in Berlin and George Georgiopoulos in Athens)