* Van Rompuy rejects smaller euro zone, urges economic union
* Says Italy needs reforms, not elections
* Says crucial Italy implements reforms
By Gavin Jones
FLORENCE, Italy, Nov 11 (Reuters) - European Council President Herman Van Rompuy said on Friday the euro zone faces a battle for its existence and he would do his utmost to keep the currency bloc together.
In a speech delivered in a church near Florence, the representative of European Union heads of government said the euro zone was only as strong as its weakest members and rejected the idea of a "pruned down" currency bloc.
A small group of protesters calling for more democracy in Europe shouted slogans inside the church as he gave his speech.
Van Rompuy also intervened directly in Italy's political crisis, calling for the formation of a new government rather than elections when Silvio Berlusconi steps down in a few days as he has promised.
"We are in the middle of a crisis which affects the material and symbolic heart of the European Union -- the euro. An existential crisis, and we mean to overcome it," Van Rompuy said.
The euro zone's debt crisis has escalated over the last month, with Italian bond yields rising to dangerous levels as the euro zone's third-largest economy failed to convince markets it could pass reforms and bring down its huge debt.
Van Rompuy called on Italy's parliament to approve a package of reforms currently before parliament and said that, when implemented, these would help the country to "regain" credibility.
He called the so-called "stability law" containing the measures "a major step in the right direction, but warned that "implementation is absolutely crucial".
Diverging from the text of his speech, he added that "the country needs reforms, not elections".
Rejecting talk of some weaker economies leaving the euro zone, Van Rompuy said if this happened it would put into danger the working of the internal market in the broader European Union.
"We will not prune the euro zone to a more selective club," he said. "I personally will do my utmost to keep the (euro zone) 17 and (EU) 27 together."
Instead, it is necessary to deepen economic union.
"We cannot have a common currency, a common monetary policy, and leave everything else to the states involved, and yet this is what we have experienced," Van Rompuy said.
He added that he would propose that in future euro zone leaders should hold meetings of their own immediately after EU summits.