European stocks extended their losses on Monday afternoon as U.S. shares dropped at the open on Wall Street and after German Chancellor Angela Merkel said there was no guarantee that a new bailout package for Greece would succeed.

At 2:39 p.m., the FTSEurofirst 300 <.FTEU3> index of top European shares was down 1.1 percent at 1,065.39 points, while U.S. shares slipped from a four-year closing high reached on Friday.

Ahead of a parliamentary vote needed to approve the 130 billion euro (110.3 billion pound) rescue programme for Greece, Merkel told German lawmakers that there was no guarantee the package would succeed, but said the benefits of backing the programme outweighed the risks.

Banking stocks were among the top losers, with Societe Generale down 4.3 percent and UniCredit down 4.5 percent.

(Reporting by Blaise Robinson)