World stocks slipped back from recent closing highs on Thursday and the euro fell half a percent against the dollar on worries about Greece not receiving European Union aid.

The euro was trading at $1.3661, recovering slightly from a session low of $1.3648.

A Greek official quoted in a newswire report said the country was growing increasingly pessimistic about the prospect of help at a European Union summit on March 25 and may seek International Monetary Fund aid.

It forced many investors to dump euro long positions after the recent relative calm on the Greek debt woes helped some to buy the euro back, said a senior trader for a Japanese securities firm.

Greek Prime Minister George Papandreou told the European Parliament on Thursday that his country will not be able to sustain its planned deficit cuts if it has to continue borrowing at high rates.

He also said Greece was not asking for help, but wanted political support and that Europe needed to take action.

Papandreou added that Greece would not default.

The premium investors demand to hold Greek government bonds rose. The Greek/German spread widened to 310 basis points, up around 7 bps from Wednesday's settlement close.

Meanwhile, the cost of insuring Greek government debt against default rose to 295,700 euros per 10 million euros of exposure, from 287,700 euros at Wednesday's New York close according to prices from CMA DataVision.


World stocks were weaker, but in many cases coming off recent highs.

MSCI's all-country world stock index dipped a quarter of a percent as did its emerging market-only counterpart.

Europe's FTSEurofirst 300 was off about the same after a two-day rally that took it to a 17-month closing high. Earlier, Japan's Nikkei closed down 1 percent, falling from Wednesday's two-month closing high.

The market is pricing in that there is no prospect of higher interest rates any time soon in the west, but that's because of a danger of a relapse in the economy, and there are doubts creeping in about the ... support for the Greece rescue plan, said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.

(Additional reporting by Brian Gorman; Editing by Toby Chopra)