- European Union leaders loosen constraints on national budgets
- Italian parliament no closer to solving election deadlock
- Euro/dollar edges higher

FTSE-100: -0.61%
Dax-30: -0.22%
Cac-40: -0.68%
FTSE Mibtel 30: -0.16%
Ibex 35: -0.42%
Stoxx 600: -0.32%

European equities ended the week on a low after leaders of the region eased restraints on national budgets as the recession deepened and unemployment climbed.

European governments met in Brussels late Thursday and granted countries such as France, Spain and Portugal extra time to bring down deficits through "structural" budgetary assessments.

French President Francois Hollande said flexibility was necessary for growth in the 17-nation bloc.

"If there is too much austerity, there will be too much unemployment," he said at the summit.

The European Commission predicts the region will follow last year's 0.6% contraction by shrinking 0.3% in 2013.

It forecasts unemployment at 12.2% in 2013, reaching as high as 27% in Greece and Spain.

Italy fails to elect speakers

Italy showed no signs of solving its deadline election Friday as the parliament met for the first time since last month's polls.

The parliament failed to elect presidents of either legislative chamber, adding another spanner in the works for Europe's third largest economy.

The fate of the country hangs in the balance as investors have raised concerns over the need for a government to enact reforms to resolve its deficit.

Bwin.Party shares fall as profits decline

Bwin.Party Digital Entertainment shares retreated after posting drop in profits as a result of gaming taxes.

Volkswagen fell to its lowest since November after Waddell & Reed Financial Inc sold its shares in the company.

Vivendi slid as the French media and telecommunication company halted the planned sale of GVT after failing to get a satisfactory bid for the division.

Pest control and hygiene company Rentokil Initial surged after unveiling a rise in annual profits.

Other asset classes rise

The euro/dollar grew by 0.48% to 1.3067.

Front month Brent crude futures rose 0.819 dollars to the 109.860 dollar mark on the ICE.

RD

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