European stocks declined as wrangling between Greek politicians following the shutdown of the state broadcaster overnight renewed concerns about the stability of the country's government.

Greece's benchmark ASE Index dropped 3.2 percent, extending its slide so far this week to 12 percent, as Prime Minister Antonis Samaras shut the nation's public broadcaster overnight. The Pasok and Democratic Left parties today submitted a draft law to overturn the ruling.

Greece became the first developed country to be cut to emerging-market status by MSCI Inc. after the local equity gauge plunged 83 percent since 2007. The Mediterranean nation failed to meet criteria regarding securities borrowing and lending facilities, short selling and transferability, according to a statement yesterday from MSCI, whose equity indexes are tracked by investors with about $7 trillion in assets.

National benchmark indexes fell in 13 of the 18 western European markets today. France's CAC 40 retreated 0.4 percent, the U.K.'s FTSE 100 slid 0.6 percent, while Germany's DAX lost 1 percent.

Societe Generale SA slid 2.5 percent to 28.46 euros, Barclays lost 2.9 percent to 295.8 pence and Deutsche Bank declined 3.2 percent to 34.40 euros.

Severn Trent tumbled 8.9 percent to 1,765 pence after Borealis Infrastructure Management Inc. and its Kuwaiti-British partners late yesterday abandoned their 5.3 billion-pound ($8.3 billion) bid for the U.K. water utility as the offer deadline expired.

Kabel Deutschland jumped 8.2 percent to 80.84 euros, for the biggest advance on the Stoxx 600, after Vodafone, the world's second-largest wireless carrier, confirmed it discussed acquiring the German cable operator to expand in the broadband and TV market.

British Sky Broadcasting Group Plc rose 1.4 percent to 788.5 pence after Banco Espirito Santo SA wrote in a report that News Corp. may make a new bid for the U.K.'s largest pay-TV broadcaster after its shareholders approve a plan to split off publishing operations. Espirito said it sees a possible takeover valuation for BSkyB of 990 pence a share.

Inditex SA added 3.5 percent to 101.30 euros after reporting a 5.2 percent increase in first-quarter sales to 3.59 billion euros. The world's biggest clothing retailer also forecast stable profitability even after first-quarter profit advanced at the slowest pace in four years.