European stocks posted a second week of losses as a standoff between U.S. lawmakers led to the first government shutdown in 17 years for the world’s biggest economy.

The U.S. government began a partial shutdown on Oct. 1 after Democrats and Republicans failed to agree on a budget, closing some services and placing as many as 800,000 federal employees on unpaid leave. A two-week halt could shave 0.25 percentage point off fourth-quarter economic growth, Federal Reserve Bank of San Francisco President John Williams forecast.

In addition to passing a budget, Congress must authorize an increase to the $16.7 trillion debt ceiling this month to avoid a default. The Treasury has said it will exhaust measures to stay within the limit by Oct. 17 and warned that a default could have catastrophic consequences that might last for decades. The government will run out of cash to pay bills between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

House Republicans met in Washington today to discuss their negotiating tactics, with Speaker John Boehner telling party members that he will not allow a U.S. default, according to a person in the room speaking on condition of anonymity.

National benchmark indexes fell in 11 of the 18 western European markets this week. Germany’s DAX retreated 0.4 percent, while the U.K.’s FTSE 100 (UKX) lost 0.9 percent. France’s CAC 40 decreased 0.5 percent.

Italy’s FTSE MIB surged 3.7 percent, the most since July. Letta won a confidence vote on Oct. 2 with support from former premier Silvio Berlusconi, who reversed his position after initially trying to bring down the five-month-old government by withdrawing his ministers from the coalition.

Popolare di Milano surged 16 percent and Mediobanca gained 12 percent in Milan trading. UniCredit SpA, Italy’s largest lender, advanced 9.6 percent.

Unilever dropped 3.7 percent in London trading after saying Sept. 30 that underlying revenue for the third quarter rose 3 percent to 3.5 percent. The world’s second-biggest consumer-goods maker reported 5 percent growth in the first half and second quarter.

A gauge of food and beverage stocks was the second-worst performer among 19 industry groups in the Stoxx 600. Nestle SA, the world’s biggest food company, lost 1.7 percent.

Nokian Renkaat tumbled 9.7 percent, the biggest weekly drop since October 2012. Full-year net sales and operating profit will decline because of the ruble’s retreat against the euro, the Nordic region’s biggest tiremaker said today.

Hochtief AG, which owns a controlling stake in Leighton Holdings Ltd., lost 4.9 percent for the largest slide since June. Leighton, Australia’s biggest builder, allegedly paid bribes to win contracts, the Age newspaper reported. Former chiefs Wal King and David Stewart were aware of the conduct, according to the report.

European stocks rose slightly , but in spite of that are sent to a second weekly decline , as negotiations between U.S. lawmakers on the federal budget and debt limit continues, but so far there is no apparent revenge results. U.S. index futures rose, while Asian shares fell .

Stoxx Europe 600 index rose 0.01 percent to 309.59 . Since the beginning of the current week, the index fell 1 % , while reducing its annual growth to 11%.

Analysts expect that the patience of investors may end if the government is not going to work more than a week , and the deadline for a decision on increasing the U.S. debt limit will approach . Earlier, the U.S. Treasury Secretary Liu said that the provision of borrowing must be exhausted by October 17.

The inability to raise borrowing limit could damage not only the U.S. but also the world economy - said the director of the IMF , Christine Lagarde .

Republican House Speaker John Boehner said he intends to avoid government default . The representative with a total Bonera , he always said that the country should not allow a default on the debt, but not in the House of Representatives votes to approve the increase in the debt limit without conditions .

Market volatility may increase, if the impasse continues . Goldman Sachs expects the short-term consequences for the U.S. GDP may decline by 0.2 %, and if the situation lasts longer - 0.4 %, as shown in the unpaid leave will reduce the costs of government employees .

Nokian Renkaat shares fell 7.2 percent to 34.84 euros after the company said that operating profit and net sales will fall this year compared with 2012 . Recall that in its latest forecast , which was made public in August , it was expected that sales and profits can increase for the year.

The cost of Hochtief AG fell 1 percent to 61.01 euros on the background that the Australian unit Leighton Holdings, has increased its loss in Sydney . Shares in the German company sent to its biggest weekly decline since June, in connection with allegations of corruption Leighton Holdings.

Shares of Home Retail (HOME) rose 0.8 percent to 169 pence as UBS raised its rating on the stock to ' buy ' from ' neutral '.

At the moment :

FTSE 100 6,452.49 +3.45 +0.05 %

CAC 40 4,148.18 +20.20 +0.49 %

DAX 8,597.95 +0.04 0.00%

Asian stocks fell, with the regional index heading for its first weekly loss in more than a month, as concern grew that the U.S. political impasse could lead to the government defaulting on its debt.

Nikkei 225 14,024.31 -132.94 -0.94%

Hang Seng 23,119.25 -95.15 -0.41%

S&P/ASX 200 5,208.02 -26.87 -0.51%

Shanghai Composite 2,174.66 +14.64 +0.68%

Blumont Group Ltd. , which invests in minerals and energy resources, slumped 56 percent in Singapore before trading was suspended after it agreed to buy an unnamed overseas coal producer.

Digital Garage Inc.  sank 10 percent after a Twitter Inc. filing failed to mention the Tokyo-based company as a shareholder.

Universal Robina Corp. slipped 4.9 percent after parent JG Summit Holdings Inc. sold shares of the Philippine food and beverage company at a discount.

Nikkei 225 14,157.25 -13.24 -0.09%

Hang Seng 23,199.73 +215.25 +0.94%

S&P/ASX 200 5,234.9 +19.34 +0.37%

Shanghai Composite 2,174.66 +14.64 +0.68%

FTSE 100 6,449.04 +11.54 +0.18%

CAC 40 4,127.98 -30.18 -0.73%

DAX 8,597.91 -31.51 -0.37%

Dow 14,996.48 -136.66 -0.90%

Nasdaq 3,774.34 -40.68 -1.07%

S&P 500 1,678.66 -15.21 -0.90%