HIGHLIGHTS-Comments from leaders at EU summit

BRUSSELS Jan 30 (Reuters) - European leaders met on Monday to discuss how to balance austerity with growth at a summit that approved a permanent rescue fund for the euro zone.

Following are comments from leaders after the summit:

POLISH PRIME MINISTER DONALD TUSK

ON POLISH DEMANDS TO PARTICIPATE IN EURO ZONE SUMMITS:

"We are not fully happy with the compromise but we are happy enough to sign it."

"We were trying to explain for weeks that the (proposals) had threatened the sense of (European) community. We met, maybe not half way, but from our perspective, and everyone else's, the current plan preserves the sense of community."

"We have been pointing out that content of the fiscal pact could have been more ambitious. Our intention was not only to safeguard the European community but also to help euro zone leaders who have been for months struggling to build tools to effectively protect the euro zone from the debt crisis."

GERMAN CHANCELLOR ANGELA MERKEL

ON MONITORING GREECE:

"Greece has two unique elements. It is a special case with regards to the involvement of private creditors. Secondly, such supervision is only necessary if a country does not meet the guidelines when it is examined.

"That's not the case with Portugal so far and certainly not the case with Ireland. But it is the case with Greece. And that is why the need for such supervision arises.

"Greece is a special case. When there are indications in the latest examination that certain things have not been adhered to there is for the countries that have provided financing for the programme then there is, (Swedish Prime Minister) Fredrik Reinfeldt called it, a certain frustration. Then the question is: is the supervision good enough? Does it have to be improved?"

ON NEW GREEK PROGRAMME:

"When we say that the Greek programme will cost more, we have to ask ourselves what we want. We want a debt sustainability in Greece in 2020 of roughly 120 percent (of gross domestic product). If a programme is getting more expensive so that we have to spend more than 100 billion euros then that does not make Greece's debt more sustainable.

"That rather increases its debts. The money has to be paid back some day.

"One must find ways through more action from the Greek government, through more contributions from private creditors, for example, to close this gap. That is being negotiated now."

EUROPEAN COMMISSION PRESIDENT JOSE MANUEL BARROSO

ON TALKS ON BONDHOLDER LOSSES ON GREEK DEBT:

"We had a brief discussion on Greece, and in fact we have noted the progress made in negotiations with the private sector to reach an agreement in line with the parameters agreed upon in October."

Now the Greek authorities and the others involved "have to finalise negotiations on a new programme in the coming days. Restoration of credibility also requires that all political parties commit to this new programme in a completely clear way."

"We urge also the finance ministers to take all necessary steps for the implementation of the PSI agreement and the adoption of the new programme, including prior actions, well in time for the launching of the PSI operations by mid-February."

"And we recall that PSI in Greece is an exceptional and unique case."

"So I'm confident that provided that there is good cooperation now between the (EU-IMF) troika and the Greek authorities, and our mission as you know is there in Athens, we can conclude this new programme in the next days, but I cannot commit now to an exclusive date or exactly the format of this new agreement."

BRITISH PRIME MINISTER DAVID CAMERON

ON EUROPEAN FISCAL PACT

"Our national interest is that these countries get on and sort out the mess that is the euro. It's also in our national interest that the new treaty outside the EU doesn't encroach on the single market or the things that we care about.

"That's the outcome that we want to achieve. So we'll be watching like a hawk and if there is any sign that they are going to encroach on the single market, then clearly we would take the appropriate action, if I can put it that way.

"But if they are going to stick to fiscal union issues and all the things they are planning, then that's an outcome Britain is comfortable with."

ON FINANCIAL TRANSACTION TAX

"In the spirit of this healthy competition with France, if France goes for a financial transactions tax then the door will be open and we'll be able to open many more French banks and businesses to the UK and we'll expand our economy in that way."

ON FRIENDSHIP WITH FRENCH PRESIDENT NICOLAS SARKOZY:

"I'm a big supporter and friend of Nicolas Sarkozy. I wish him well. He's a remarkable man. I worked with him very closely over the Libyan conflict. I think that was probably the closest the British and French have worked together in the last 40 years.

"So I'm full of admiration for Nicolas. Every now and then he says something I don't agree with. Today, when he said that Britain is short of industry - we actually have a larger industrial sector than France - but we'll gloss over that."

EU COUNCIL PRESIDENT HERMAN VAN ROMPUY

ON NEGOTIATIONS ON BONDHOLDER LOSSES ON GREEK DEBT:

"We welcome the progress made in the negotiations with the private sector. We count on the Greek authorities and the (EU-IMF) troika to agree on the steps to put the current programme back on track."

"We urge finance ministers to take all necessary actions to implement the private sector involvement (PSI) agreement and to adopt the new programme by the end of the week, well in time for the launching of the PSI by mid-February."

FRENCH PRESIDENT NICOLAS SARKOZY

ON NEW FISCAL COMPACT TREATY AND EURO ZONE MEETINGS:

"I think it's important that matters be clear. That we should not remain in this ambiguity. Those that want the treaty should call for it and implement it forcefully, and those who have reservations should say so, and say what those reservations are and say 'we are not going to sign'."

"I believe very honestly and very seriously that this clarification was necessary. Europe is based on compromise, we must make compromises, but there comes a point when compromise goes too far and it can jeopardise the whole edifice."

"So there will be three levels of meetings. When it's the single market, the 27 will meet; when it's the euro plus pact, in other words when it's all those who are in the euro or wish to join the euro will meet, that will be 25 or 26 of us; and when it's matters pertaining exclusively to the euro area, then it will be 17 members who will meet."

"That is the way things will operate. That doesn't mean that it's a multi-speed Europe, it doesn't mean that there are countries that will be left on the sidelines, it just means that there are different degrees of integration, and everyone is free to choose where they stand."

ON CZECH POSITION ON NEW FISCAL COMPACT:

"The Czech prime minister told us that for constitutional reasons, he did not wish to accede to the future treaty. We have taken note of that decision."

"I'm not sufficiently familiar with the ins and outs of what is going on in Prague to be able to understand why what was acceptable in December is no longer acceptable now."

"But it will be a treaty with 25 members, because the Danish prime minister told us that her parliament has given her the authority to ratify the treaty, so it will be a treaty among 25."

ON GREECE:

"As far as the Greek situation is concerned, let me tell you that things are going ahead in the right direction, and we are hopeful that Greece's situation will be the subject of a definitive agreement in the next few days."

Following are comments ahead of the summit, earlier in the day:

AUSTRIAN CHANCELLOR WERNER FAYMANN

ON MONITORING GREECE:

"I don't think it's a good idea to just have one commissioner for one country. I prefer the Commission to work in the same way as with other programme countries and make strict controls. There's the (EU-IMF) troika and others who do this job."

ON SUMMIT AIMS:

"We now also have to talk about growth. We have to make savings, everybody knows this, to sort out budgets everywhere. But the big is question is how can we tackle employment. If we don't massively campaign for sustainable growth then we are missing a pillar.

"I think that the financial transaction tax and strong banking rules are part of an approach where our citizens see that employment is not a minor point for us but just as important as savings and the debt brake."

DANISH PRIME MINISTER HELLE THORNING-SCHMIDT

"It's very important that we don't forget the growth and the jobs. Everything starts and ends with growth and jobs, but we also have to understand that in each individual member state you have to have balanced budgets and it is important for all of us that we now have balanced budgets.

"We have to balance budgets and at the same time focus on growth and jobs. It is possible to do both at the same time and it is important to understand that these are two sides of the same coin -- they are interlinked."

BRITISH PRIME MINISTER DAVID CAMERON

"This is the European Council where we need to get really serious about the growth agenda in Europe. That means completing the single market, it means signing trade deals with the fastest growing parts of the world and it means a serious effort at deregulation, particularly for small businesses, so they can create the jobs and the growth that we need.

"That's the agenda I am going to be pushing and I hope to find a lot of support."

GERMAN CHANCELLOR ANGELA MERKEL

ASKED ABOUT MONITORING GREEK BUDGET SPENDING:

"I think we're having a discussion we shouldn't be having. It's about how Europe can be supportive so Greece can comply, so there are targets. But this is only possible if Greece and the other countries debate this. This is why I don't want a controversial debate, but a constructive one which is successful. Successful for the people in Greece and nothing else."

LUXEMBOURG'S PRIME MINISTER AND EUROGROUP PRESIDENT JEAN-CLAUDE JUNCKER

ON MONITORING GREECE:

"I don't think we should single out Greece. If we are prepared to make sure in the treaty that we do this to countries that are constantly outside of the track, then I'm not opposed, but I don't think it's fortunate to have this only with regards to Greece."

"Greece is not the focus of today's summit but we will without doubt talk about it."

ON SUMMIT AIMS:

"It is about employment. We have to learn to explain that it's not just about the consolidation our finances, but we also need the prospect of growth."

SWEDISH PRIME MINISTER FREDRIK REINFELDT

ON MONITORING GREECE:

"We need to have things in place for monitoring that they are really doing what they are promising."

"You can always discuss how you should do it and what you call it. I understand the frustration. The feeling has been that Greece, who needs support from outside to be able to survive... do not deliver on the reforms they have promised others."

"The experience is that you need help from outside when you need to make tough reforms."

DUTCH PRIME MINISTER MARK RUTTE

ON SITUATION IN GREECE AND BUDGETARY MONITORING:

"I never comment on proposals of colleagues ahead of the summit but in general terms you know the position of the Netherlands. Quid pro quo. If we are prepared, in the case of Greece, to also in our own interest help the Greeks to get through this difficult period, we expect them to implement the agreement very well."