(Reuters) - The euro extended losses on Friday with traders citing a German newspaper report that quoted a member of a political party in the German coalition government as saying euro zone countries should comply with agreed reforms or leave the bloc. Asked if Greece could stay in the euro, Gerda Hasselfeldt, a senior member of the Bavarian Christian Social Union (CSU), sister party to Chancellor Angela Merkel's Christian Democratic Union (CDU) said it was up to Greece to implement measures that had been agreed. "If a country is unwilling or unable to comply with its obligations, it must leave the euro zone," she added in an interview to the Rheinische Post. The comments repeat the position taken earlier this year by Hasselfeldt of the Bavaria-based sister party of Merkel's CDU, which has tended to be more critical of EU bailouts than the CDU.. The euro fell to a session low of $1.2227. It also dropped to a seven-week low against the yen of 96.05 yen . In the bond market safe-haven German Bund futures rose to a session high 145.59, up nearly half a point on the day while Spanish and Italian debt prices fell. One bond trader cited the same report as driving fixed-income markets. The FTSEurofirst 300 extended its early fall, down 0.4 percent to 1,060.40 points, led by falls in the Spanish IBEX and Italy's FTSE MIB, which were down 1.2 percent and 1.6 percent respectively on the day. (Reporting by London markets team, writing by William James, editing by Swaha Pattanaik)

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