European stocks slide as Greece talks collapse, banks tumble

European equities fell sharply on Monday after talks between Greece and its creditors collapsed at the weekend, raising the prospect that Greece could default on its debt obligations.

The pan-European FTSEurofirst 300 slipped more than 1.5 percent during afternoon trade, with German stocks tumbling around 1.9 percent, as peripheral bond yields spiked.

Greek banks, peripheral bonds sell off

Symbol	Name	Price	Change	%Change	Volume
FTSE	FTSE 100 Index	6730.09	-54.83	-0.81%	388372832
DAX	DAX Index	11035.57	-160.92	-1.44%	58162127
CAC 40	CAC 40 Index	4836.05	-65.14	-1.33%	82943655
IBEX 35	IBEX 35 Idx	10870.10	-160.40	-1.45%	157524479

Talks between Greece and its creditors over the weekend yet again failed to resolve the impasse over reforms, with European officials blaming Athens for failing to offer concessions in return for a final tranche of desperately-needed financial aid.

Greek banks faced severe selling on Monday as investors digested the news, with Pireaus Bank tumbling as much 12 percent in afternoon trade, while Alpha Bank and Eurobank Ergasias both traded down around 9 percent and 6.8 percent respectively. Italian and Spanish banking stocks also fell sharply.

Bond yields in Greece and peripheral Europe also spiked. Greek 10-year yields hit 12.2 percent, after closing at 11.8 percent on Friday.

Greek Finance Minister, Yanis Varoufakis, ruled out a "Grexit" -- Greece leaving the euro zone -- in an interview with a German newspaper Bild published Monday, but said that Germany needed to play a bigger part in talks. The only way Greece would be able to repay its debts is if there is a restructuring, he wrote, and a deal could be possible if German Chancellor Angela Merkel took part in the talks, Reuters reported.

U.S. stocks were trading about 1 percent lower on Monday, following a decline in European equities on the collapse of weekend talks between Greece and its creditors.

In other Europe news, the U.S. plans to store heavy military equipment in the Baltics and Eastern European nations to reassure allies made uneasy by Russian intervention in Ukraine, and to deter further aggression, Reuters reported Sunday, citing an unnamed senior U.S. official.

Russia's central bank cut its key interest rate once again on Monday, in a further bid to stimulate economic growth in the country. It slashed interest rates by 100 basis points to 11.5 percent, in line with analyst expectations, in the fourth consecutive month of cuts.

In other individual stocks news, budget U.K. airline easyJet fell around 2.5 percent to the bottom of benchmarks, before paring losses to 1.9 percent lower, after RBC analysts cut its rating to underperform from outperform.

The move weighed on European rivals Air-France KLM and Lufthansa, which both slipped down around 3.4 and 2.6 percent down respectively.