European stocks slid on Friday, the last trading day of the third quarter, as markets doubted whether a boost to the eurozonebailout fund would provide the panacea to the bloc's debt crisis.
The euro dropped against the dollar as official data showed a spike in eurozone inflation to 3.0 percent in September, while the region'sunemployment rate was steady at 10 percent in August.
Greece's Prime Minister George Papandreou was due to hold talks with France's President Nicolas Sarkozy on Friday, one day after German lawmakers gave the faltering eurozone vital breathing space by agreeing to boost the bloc's bailout fund.
France will be one of the key contributors to the expanded fund while its own banks are critically exposed to sovereign debt from Greece and other weak links in the eurozone chain -- Italy, Spain and Portugal.
European stocks headed south on Friday after Asian indices mainly closed flat. Strong US growth data published on Thursday offered some support, traders said.
London's FTSE 100 index of leading shares slid 1.04 percent to 5,143.29 points in late morning trade, Frankfurt's DAX 30 retreated 1.74 percent to 5,539.79 points and in Paris the CAC 40 shed 1.03 percent to 2,996.05 points.
In Asia, the main indices in Tokyo, Australia and South Korea closed flat. Hong Kong shed 2.32 percent with the Hang Seng Index playing catch-up after being shut on Thursday.
"European stocks have run out of steam and are following Asian stocks lower," said Kathleen Brooks, analyst at trading group Forex.com.
"It's been one hell of a third quarter and the excitement of recent weeks is likely to continue over the next three months. We end the quarter no closer to a long-term solution to the European sovereign debt crisis ... and the global economic outlook is still a confusing picture.
"The euro is looking weak ... and stocks, which have had their worst quarter since 2008, look fragile. Will there be another leg lower for risk, or will Germany save the eurozone and cause a huge relief rally?
"These are the questions we grapple with as we enter the last three months of the year," she added.
In foreign exchange deals on Friday, the euro dropped to $1.3522 from $1.3586 in New York late Thursday. The dollar edged up to 76.82 yen from 76.79 yen on Thursday.
German deputies on Thursday voted overwhelmingly to expand the scope of the 440-billion-euro ($590 billion) European Financial Stability Facility (EFSF), handing it new powers, for example to buy sovereign bonds.
The expansion also boosts the contribution of Germany, Europe's paymaster, to 211 billion euros.
"The vote in favour of expanding the size and role of the EFSF in the German Bundestag ... resulted in some relief buying of the euro but that buying has already turned to selling," said Derek Halpenny, a senior currency analyst at The Bank of Tokyo-Mitsubishi UFJ in London.
"Equity markets are flat to lower as concerns over the eurozone crisis and global growth persist," he added despite better news for the United States.
The US economy grew by a faster-than-expected 1.3 percent in the second quarter, figures from the Commerce Department showed on Thursday.
The rate was revised up by 0.3 of a percentage point, as investment, spending and exports all helped boost the growth rate.
Overnight on Wall Street, the Dow Jones Industrial Average stocks index closed up 1.30 percent while the tech-heavy Nasdaq Composite fell 0.43 percent.