FRANKFURT, (Reuters) - The European Central Bank kept interest rates steady at a policy meeting on Thursday but unexpectedly cut its asset purchases to 60 billion euros ($65 billion) per month, from the current 80 billion euros.

The asset buys will run until the end of 2017, or longer if necessary, the bank said in a statement.

Following are highlights of ECB President Mario Draghi's comments at a press conference after the meeting.

APP BELOW DEPOSIT RATE

"(Purchases) below the interest rate on the ECB deposit facility will be permitted to the extent necessary, so it's an option, it's not a necessity.

"As a matter of fact, the committee, the relevant committees will look in January and in the coming months when this could become a necessity.

"So it's more to give an option for continuing a smooth implementation of the program than for any other reason."

ASSET PURCHASE OPTIONS

"(One option was) continuing with 80 billion euros a month for six months and the other one is the one that was (chosen) -- that received a very, very broad consensus by the Governing Council."

ON TAPERING

"Tapering has not been discussed today."

STRUCTURAL REFORMS, PLEASE

"Structural reforms are necessary in all euro area countries. The focus should be on actions to raise productivity and improve the business environment, including the provision of an adequate public infrastructure, which are vital to increase investment and boost job creation."

NO UPWARD INFLATION TREND

"(Inflation forecast rises) reflected to a large extent an increase in annual energy inflation while there are no signs yet of a convincing upward trend in underlying inflation."

HEADLINE INFLATION

"Looking ahead on the basis of current oil futures prices headline inflation rates are likely to pick up significantly further at the turn of the year, mainly owing to base effects in the annual rate of change of energy prices."

GROWTH RISKS

"The risks surrounding the euro area growth outlook remain tilted to the downside."

STRONGER GLOBAL RECOVERY

"There are indications of a somewhat stronger global recovery. However, economic growth in the euro area is expected to be dampened by a sluggish pace of implementation of structural reforms and remaining balance sheet adjustments in a number of sectors."

CLOSELY MONITORING INFLATION

"The Governing Council will closely monitor the evolution of the outlook for price stability and if warranted to achieve its objective will act by using all the instruments available within its mandate."

FIRMING RECOVERY

"(Policy) calibration reflects the moderate but firming recovery of the euro area economy and still subdued underlying inflationary pressures."

NEW APP PARAMETERS

"First, the maturity range of the public sector purchase program will be broadened by decreasing the minimum remaining maturity for eligible securities from two years to one year. Second, purchases of securities under the asset purchase program with a yield to maturity below the interest rate on the ECB's deposit facility will be permitted to the extent necessary."

BOND BUYING COULD INCREASE AGAIN

"If in the meantime the outlook becomes less favorable or if financial conditions become inconsistent with further progress towards a sustained adjustment of the path of inflation, the Governing Council intends to increase the program in terms of size and/or duration."

($1 = 0.9302 euros)

(EMEA Desk)