Merkel Says Greek Debt Talks on 'Good Path'

(REUTERS) -- German Chancellor Angela Merkel said on Thursday talks between the Greek government and its private creditors were on track but next Monday's EU summit would focus on how to boost growth and employment in Europe rather than Greece's predicament.

(The talks) are on quite a good path. On that basis the second Greek program will be drawn up, in which Greece also has to specify its additional obligations again, Merkel said at a news conference with Spanish Prime Minister Mariano Rajoy.

But she added that the latest troika report on Greece by the European Commission, European Central Bank and International Monetary Fund would not be ready in time for the Jan. 30 summit, which was specifically supposed to discuss growth anyway.

We will not yet have the troika report for our summit on the 30th which means we will really talk about growth on Monday and try to conclude the fiscal pact, said Merkel.

Finance ministers will try to make more progress on the issue of voluntary participation in Greece for next time. But we don't want to raise false expectations and we really do want to concentrate on growth, said the chancellor.

Merkel is also keen to avoid the summit being sidetracked by debate about whether extra funding should be funneled into the Eurozone bailout funds, as the International Monetary Fund and some euro states - including Italy and Spain - have suggested.

Rajoy, who a day earlier said the bigger the better on the issue of the size of the bailout funds, echoed Merkel's comments that the top priority was for the permanent European Stability Mechanism (ESM) to be made operational as soon as possible.

Probably the bigger it is, the less likely it is that it will have to be used, he said. But the most important thing is for us to have a mechanism now, and that it can start operating.

Merkel said Berlin was waiting for a ruling on whether the Commission should be able to file complaints against Eurozone members that violate rules enshrined in the new fiscal pact she wants agreed by all EU states, except Britain which opted out.

We have said we are going to ask the legal advice of the European Council again to explain in writing why they believe the Commission cannot sue, Merkel said.

Germany wants to give the Commission the right to take violators to the European Court of Justice, but there are doubts about whether that can be done under current legislation.

(Reporting by Stephen Brown; Editing by Noah Barkin)