European equities slipped to a four-month low on Tuesday, with the lack of progress in debt negotiations between Greece and its international creditors making investors nervous and prompting them to cut their exposure to riskier assets like stocks.

Greece's benchmark ATG share index fell 3.9 percent, taking total losses since Friday to about 14 percent, as Greece and its creditors hardened their stances on Monday after talks aimed at preventing a default and possible euro exit faltered.

Germany's EU commissioner said the time had come to prepare for a "state of emergency", but Greek Prime Minister Alexis Tsipras said Athens was seeking a viable, long-term deal that would pull the country out of economic crisis.

"The can of Greek debt has been kicked down the road so many times there comes a point when it has to be confronted, and it looks like that time may well be in the next week or so," Laith Khalaf, senior analyst at Hargreaves Lansdown, said. "A Greek exit from the euro zone is looking ever more likely, and seeing as no-one knows what the full implications will be, investors are taking some risk off the table which has caused the market turbulence we have seen in recent days."

Macroeconomic indicators also put some pressure on the market. Mannheim-based think tank ZEW said the mood among analysts and investors in Germany, Europe's largest economy, took a sharply pessimistic turn in June, with a sentiment indicator dropping to a seven-month low. The pan-European FTSEurofirst 300 was down 0.7 percent at 1,509.27 points by 1014 GMT after dropping to 1,503.89, its lowest since mid-February. The index fell 1.6 percent on Monday, its biggest loss since late May. Concern over the deadlocked talks weighed on euro zone banks, which fell 1.8 percent as peripheral bond yields rose. Greek banks were among the biggest decliners, with National Bank of Greece and Alpha Bank falling 7.8 percent and 4.6 percent respectively.