INTERVIEW-UPDATE 1-Danske CEO sees more bank nationalisations

* Says Europe's economy could be weak for a long time

* Says liquidity constraints could hamper growth

* Sees few mergers in European banking in midst of crisis

(Adds comments, quotes)

By Yegor Paanukoski

HELSINKI, July 2 (Reuters) - Danske Bank (DANSKE.CO) Chief Executive Peter Straarup said on Thursday he expects to see more banks being taken over by governments in Europe, but said these would be sold off quickly.

"Some banks (in Europe) will be nationalised for a while, but they will probably be kept at a distance and sold off as quickly as the market recovers," Straatup said.

Straarup said Europe's economic recovery will be slow due to banks' constrained liquidity, and it could take time before the upturn begins.

"We could be running at the bottom of the U for a long time and when we come back the growth will be limited," Straarup told Reuters in an interview.

"When the bank sector does not do well, the recovery is hampered. In other words, if banks have constrained liquidity, we will not have a strong rebound," Straarup said.

Straarup forecast a slow recovery also for Finland, hoping the Finnish economy could start to grow again in second half of 2010.

The Danske CEO said he wants to grow the company's business in Finland, the market it entered through the acquisition of Sampo Bank.

"Obviously, if one makes a mathematical calculation now, the result will not be as one expected it to be when we bought the bank," Straarup added.

He also said the outflow of the bank's private customers in Finland had stopped.

(Reporting by Yegor Paanukoski; Editing by Jon Loades-Carter)

((yegor.paanukoski@thomsonreuters.com, +358-9-680 50 243, Reuters messaging: tarmo.virki.reuters.com@reuters.net)) Keywords: DANSKE/

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