Merkel warns on second Greek aid package

German Chancellor Angela Merkel said on Monday it would not be possible to pay out the next aid tranche to Greece without rapid progress on its second rescue package, including the voluntary restructuring of Greek debt held by its private creditors.

"We must see progress on the voluntary restructuring of Greek debt," Merkel told a joint news conference with French President Nicolas Sarkozy in Berlin.

"From our point of view, the second Greek aid package including this restructuring, must be in place quickly. Otherwise it won't be possible to pay out the next tranche for Greece."

Merkel added that she would talk about Greece with International Monetary Fund chief Christine Lagarde in Berlin on Tuesday.

Merkel said she and Sarkozy detected progress on a "fiscal compact" in Europe, with a commitment to a German-style debt brake likely in coming weeks. Germany and France were looking into how to speed up payments into the permanent Eurozone bailout scheme (European Stability Mechanism), she added.