* FTSEurofirst 300 up 0.6 pct, rises for 5th day
* Boosted by ECB stimulus speculation
* Greek shares fall as Syriza party extends lead
* SGS down 6.1 percent after cutting growth targets
By Francesco Canepa and Blaise Robinson
LONDON/PARIS, Jan 21 (Reuters) - European shares rose for a fifth straight day to close at a seven-year high on Wednesday as speculation mounted about the size and timing of a sovereign bond-buying programme expected to be unveiled by the European Central Bank.
A euro zone source told Reuters on Wednesday the ECB's Executive Board has proposed that the bank buy 50 billion euros ($58 billion) in bonds per month from March.
The FTSEurofirst 300 index of top European shares erased its losses after the report to close 0.6 percent higher at 1,431.06, its highest level since January 2008.
The index has surged 6 percent in the past five sessions on expectations the ECB would announce sovereign bond purchases, known in the market as quantitative easing, on Thursday.
"(The 50 billion-euro figure) at a minimum, meets expectations," Dan Greenhaus, chief strategist at BTIG, said.
"If this means the ECB is considering, or would implement, an open-ended form of QE, well then that's a whole other ballgame."
Money market traders polled by Reuters say the European Central Bank is expected to announce a 600 billion euro sovereign bond-buying programme.
Shares in Italian cooperative banks such as Banco Popolare rallied after the government approved an emergency decree that forces the largest "popolari" to change their governance rules and become joint stock companies within the next 18 months.
Any ECB announcement on Thursday could have a large impact on southern European banks, with their high exposure to sovereign debt and their countries' economic weaknesses.
"I've taken a bit of profit (on Italian banks) because I don't know what the ECB is going the decide," Roberto Brasca, a fund manager at Milan-based AcomeA, said.
Elsewhere, shares in Switzerland's SGS dropped 6.1 percent after the world's largest testing and inspection company cut its guidance for revenue and margins. Peer Intertek fell 3.7 percent.
Athens' main equity index underperformed, falling 2.4 percent after a survey showed that political party Syriza, which is running on pledges to end austerity policies and renegotiate Greek debt, has widened its opinion poll lead over the ruling conservatives.
Trading volume in Greece was 25 percent below the index's full-day average for the past three months.
"We expect the market to remain nervous as the election date draws nearer, with light volumes to persist," analysts at Euroxx Securities in Athens wrote in a note. (Editing by Alison Williams)