European stocks plunge; financials broadly lower; Greek crisis in focus

European stocks dropped on Monday as Greece swayed on the verge of default after bailout talks broke down last week. Greece imposed capital controls and its lenders are to remain shut till July 6. However, as the local newspaper reported, some local branches are expected to open Monday in order "to service pensioners to use credit or cash to retrieve their pensions."

The Stoxx Europe 600 Index tumbled 2.8 percent to 385.64 after the country closed its banks and imposed capital controls. 

France’s CAC 40 lost 3.90%, while Germany’s DAX 30 plunged 3.68%.

Financial stocks were widely lower, as French lenders BNP Paribas and Societe Generale dove 5.93% and 5.80%, while Germany's Deutsche Bank and Commerzbank plunged 6.61% and 5.07%.

Among peripheral lenders, Italy's Unicredit and Intesa Sanpaolo lost 5.65% and 6.04% respectively, while Spanish banks BBVA and Banco Santander tumbled 6.19% and 8.25%.

The Athens Stock Exchange will not open Monday, a Capital Markets Commission official said.

After the European Central Bank stopped providing extra emergency funding for Greek banks, Prime Minister Alexis Tsipras announced capital controls in a televised address on Sunday night to prevent banks from collapsing under the weight of mass withdrawals.

Banks will remain shut until at least July 6.

As Reuters reports, European officials seem to be confused about their next move. A spokesman for the European Commission told French radio that Brussels would not make any new proposals on Monday, appearing to contradict comments by EU Economics Commissioner Pierre Moscovici. He said a new offer was approaching and that the two sides were "only a few centimeters" away from an agreement.

Meanwhile, Greece's Kathimerini newspaper said that “some local lenders’ branches were expected to open on Monday in order to service pensioners unable to use credit or cash cards to retrieve their pensions”.

In the meantime, British Prime Minister David Cameron has discussed the Greek crisis on BBC Radio 4’s Today Programme.

In his opinion, the U.K.'s interests are best served by a deal between Greece and the eurozone that delivers the security that we want to see, Cameron replies. However, the Guardian revealed on Friday that the UK PM told a fellow EU leader that it “might be better” for Greece to exit the eurozone.

Cameron has added that Britain has drafted a contingency plan for Greece, and he’ll put the final touches to it today.