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Tsipras assurances nudge Greek yields off post-restructuring highs

(Updates prices, adds quotes, detail on Greek/EU talks)

By Marius Zaharia and Emelia Sithole-Matarise

LONDON, March 20 (Reuters) - Greek government bond yields fell on Friday, after Prime Minister Alexis Tsipras assured European Union creditors that he would soon present a full set of economic reforms to unlock cash and stave off bankruptcy.

But the decline only partly reversed Thursday's rise to some of the highest levels seen since the 2012 debt restructuring. While Tsipras sounded optimistic, his meeting with EU leaders produced little substance.

The joint statement by the EU institutions spoke of a "spirit of mutual trust," but German Chancellor Angela Merkel stressed no money would be released before Athens implements budget measures and other reforms.

Athens is running out of time to secure new funding and many fear the current impasse risks seeing the country crashing out of the euro zone.

Tsipras declined to say when his government would present the reforms to unlock fresh aid, which he said would come gradually. That would start either in the form of a return of 1.9 billion euros of ECB profits made on Greek bonds or a partial disbursement of 7.2 billion euros in pending bailout aid.

Greek 10-year bond yields fell 69 basis points to 11.59 percent. Two-year bond yields fell just over 200 bps to 22.55 percent, having risen more than three percentage points on Thursday and having doubled in less than a month.

"This possibility of the release of 1.9 billion euros of money, which can be seen as Greek money, makes it easier for the EU to make sure Greece doesn't have a liquidity accident," said Gianluca Ziglio, a strategist at Sunrise Brokers. "The yields have come down but there is still very heightened credit risks."

A second week of ECB bond-buying reduced Greece's struggles to a sideshow as far as the rest of the euro zone was concerned. Italian and Spanish 10-year bond yields were down 4-6 basis points each to 1.21 percent and 1.19 percent, respectively

The one trillion-euro quantitative easing programme ends in September 2016.

"Greece remains a localised issue because the ECB is buying so many bonds," said Nick Stamenkovic, bond strategist at RIA Capital Markets. "ECB QE remains the main driver."

Portuguese 10-year bond yields fell 8 bps to 1.64 percent. At the top of the credit rating scale, German Bund yields were little changed at 0.18 percent.

All bond yields were near record lows.

(Editing by Larry King)