European stocks slide on Greek fears before EU summit

European stock markets and the euro fell Monday on stubborn fears over the plight of debt-ridden Greece, before a key EU summit that will seek to focus on restoring economic growth, traders said. London's FTSE 100 index of top shares dropped 0.87 percent to 5,683.41 points in late morning deals, Frankfurt's DAX 30 index shed 0.71 percent to 6,465.56 points and in Paris the CAC 40 dipped 1.00 percent to 3,285.23. The European single currency retreated to $1.3132 from $1.3221 late in New York on Friday, amid Greece's ongoing struggle to agree a writedown on its huge debts with its creditors. "A bit of risk-off this morning, as yet another EU summit gets underway and the Greek debt talks continue," said analyst Simon Denham at trading firm Capital Spreads. "The lack of agreement between bondholders and the Greek government seems to have reached loggerheads and is unsettling investors as they take money off the table." Greece continued to meet its bondholders in a bid to get them to take a loss on their investments in order for the country to shave 100 billion euros ($130 billion) off its 350-billion-euro debt. Talks have been snagged on the amount of interest to be paid on the remainder. Agreement, which would see private creditors halve the amount they are owed, is a precondition for further bailout funds from the European Commission, the European Central Bank and the International Monetary Fund. Later on Monday, European leaders will attempt to move away from the debt crisis and focus on much-needed growth as a new battle erupted over putting Greece under EU supervision. European Union heads of state and government hold their first summit of the year from 1400 GMT to finalise a new German-driven pact to toughen budget discipline. With recession looming large over Europe, leaders will also try to find ways to jumpstart the economy and reduce an unemployment rate averaging 10 percent across the 17-nation eurozone. Two years into a crisis that forced Greece, Portugal and Ireland to take bailouts, European governments will also put the finishing touches on the new so-called "fiscal compact" to prevent future debt debacles. "With the latest European summit set to start later today and the market starting to tire a little of news that a Greek deal is very nearly almost done, it looks like investors are happy to stand aside for now to see if any progress is made in the coming days," said IG Index analyst David Jones. Across in Athens, the finance minister of debt-stricken Greece on Sunday rejected a proposal from Germany for the European Union to take control over its tax and spend decisions, citing national sovereignty. "Whoever hands people a dilemma between financial aid and national dignity is ignoring basic historical teaching," said Evangelos Venizelos on the eve of an EU summit on the eurozone debt crisis in Brussels. In a statement released as he left for the meeting, Venizelos said: "Our partners know that European unification is founded on the institutional equality of member states and respect for national identity." Asia's first full day of trading following the Lunar New Year holiday saw markets mostly slip on Monday after US growth data came in below expectations and profit-takers cashed in recent gains. The US figures overshadowed hopes that Greece will hammer out a debt reduction deal with its creditors. Hong Kong shed 1.66 percent, Tokyo finished 0.54 percent lower, Seoul dropped 1.24 percent and Sydney shed 0.37 percent. Shanghai, which was closed last week for the Lunar New Year holiday, slipped 1.47 percent in value.