In filemaker 10 and older versions of filemaker you can set your merge text to shrink but not to expand. Check out the Set Sliding/Printing option in the Format menu. (Enter layout mode first.)
Sliding fields can be tricky. All objects next to or below a sliding object should also be set to slide up.
Sliding is only visible in preview mode or when printing.
Anybody check this out in FMP 11? (I'm guessing it's unchanged.)