European shares hit seven-year high, all eyes on ECB

* FTSEurofirst 300 up 0.4 pct, hits 7-year high

* Germany's DAX up 0.7 pct, hits fresh record high

* Swiss shares recover after last week's correction

By Blaise Robinson

PARIS, Jan 19 (Reuters) - European shares hit a seven-year high on Monday, lifted by growing expectations that the European Central Bank is about to embark on a bond-buying programme to support the euro zone economy.

Shares (Dusseldorf: DI6.DU - news) in Swiss blue chips paced the gains, with Swiss benchmark index SMI up 3.2 percent, bouncing back from last week's sharp correction after the central bank's shock decision to scrap its cap on the Swiss franc, a move that sent the currency soaring and will hurt the country's exporters.

Julius Baer (Other OTC: JBARF - news) featured among the top gainers, up 5.3 percent, after the private bank said it did not suffer any losses soon after the Swiss National Bank's decision to abandon a three-year-old cap on the franc.

Shares in a number of Italian banks surged, lifted by press reports about a planned government reform that could abolish a rule granting one vote to each shareholder regardless of the size of their stake.

Banca Popolare dell'Emilia Romagna was up 8.3 percent, Banco Popolare up 8.9 percent and UBI up 6.2 percent.

At 0845 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,413.07 points, a level not seen since early 2008.

Germany's DAX index was up 0.7 percent, trading at a record high. The German bourse is often seen as one of the safest in Europe and tends to benefit the most at first from investment inflows.

Expectations the ECB will start printing money to buy government bonds in a quantitative easing policy aimed at reviving inflation have fuelled a stock rally, helping European stock indexes outperform Wall Street this month.

The ECB bank is set to meet on Thursday.

"Quantitative easing is in the pipeline," said Jean-Louis Cussac, head of the Paris-based Perceval Finance.

"There's a positive bias on the market overall ahead of the ECB meeting, but the market is very volatile and there are big question marks on the upside potential going forward."

Greek shares bucked the trend, with Athens's ATG index down 0.2 percent on concerns over the country's political situation. A survey showed on Saturday that Greece's anti-bailout Syriza party is solidifying its opinion poll lead over the ruling conservatives eight days before an election.

Today's European research round-up (Editing by Hugh Lawson)