Merkel says understands Germans' frustration over Greece: paper

German Chancellor Angela Merkel said she understood her compatriots' doubts about a bailout deal for Greece, but insisted in an interview that aid for Athens was in the interests of Berlin and all euro zone members.

Her words were published on Saturday a day after German lawmakers approved the latest rescue package for Greece by a large majority despite growing unease about the cost to taxpayers.

"Of course I feel many citizens' skepticism, and understand it as well partly, as Greece has often disappointed its partners in the past," she told Bild am Sonntag newspaper.

"This is about so much more than just our currency... I want Europe to have a strong future," she added.

Merkel has repeatedly said throughout the euro zone crisis that supporting Greece is central to German interests.

Her interview appeared designed to allay increasing concerns by some German economists and lawmakers that Greece is turning into "a bottomless pit".

Merkel told the newspaper the crisis was hitting Greeks hard but reforms by the Athens government would bring results.

She rejected accusations by the opposition Social Democrats that she was not revealing the full extent of Greece's collapse - and the possibility governments might eventually have to write off much of their Greek debt - in the interests of winning a third term in elections next year.

"I know my duty and I tell citizens how things are. I'll continue to do what is best for Germany and Europe and try to keep the financial consequences as minimal as possible and avoid any excessive risks," she told the newspaper.

The outcome of Friday's vote in the lower house was never in doubt but it was a test of Merkel's authority over her center-right coalition. She did not manage to draw an absolute majority from her own ranks after 23 of her lawmakers rebelled.

The rescue package aims to cut Greece's debt load to 124 percent of national output by 2020.

(Reporting by Alexandra Hudson; Editing by Andrew Heavens)