MILAN, Nov 22 (Reuters) - European shares erased gains andbond yields dipped on Monday after German Chancellor AngelaMerkel reportedly said Europe's biggest economy needs tighterrestrictions to control a wave of COVID-19 inflections, traderssaid.

According to Bloomberg, Merkel told officials from her CDUparty that the situation is "highly dramatic" and warned thathospitals would soon be overwhelmed unless the fourth wave ofthe virus is broken. It cited person familiar with her remarks.

Europe's STOXX 600 .STOXX equity benchmark was down 0.1%by 1224 GMT, having earlier risen 0.3%. Germany's 10-year bondyields DE10YT=RR were last at -0.330%, off a high of -0.315%.

The euro EUR=EBS briefly ticked further down, it was lastdown 0.2% at $1.12775.

(Reporting by Danilo Masoni and Joice Alves; Editing by SaikatChatterjee) ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni ))