Exchange traded funds pegged to European stocks tanked Friday as whispers of a Greek default sent investors running and Jeurgen Stark’s resignation from the European Central Bank further sapped confidence.

Credit default swaps on Greek debt jumped to record highs, which signaled a 91% chance the country could default, reports Theophilos Argilis for Bloomberg. [Euro, Stock ETFs Lower on Debt Jitters]

“There is a continuing concern here that the Eurozone folks still don’t have a handle on the problem and it’s clearly impacting on the global economy,” Alan Alexandroff, co-director of the University of Toronto’s G-20 Research Group, commented, in the report. “There is some concern the EU, particularly the French and the Germans, simply haven’t come up with a formula to really resolve the sovereign debt problem.”

Greece has assured its neighbors that it will increase austerity measures. According to the Greek Finance Ministry, the government will follow the “full implementation” of its bailout agreement and any talks on default falls under “organized speculation,” report Stuart Wallace and Rita Nazareth for Bloomberg.

Meanwhle, Jeurgen Stark resigned from his post on the ECB as financial problems mount, further augmenting concern that the ECB is unable to come to a consensus on the worsening debt crisis.

  • Vanguard European ETF (NYESArca: VGK) was down 4%
  • iShares S&P Europe 350 Index Fund (NYESArca: IEV) shed 3.7%
  • MSCI Europe Financials Sector Index Fund (NYESArca: EUFN) was down 5.3%

Country-specific ETFs:

  • iShares MSCI France Index Fund (NYESArca: EWQ) was down 4.7%
  • iShares MSCI Germany Index Fund (NYESArca: EWG) was down 5.1%
  • iShares MSCI Italy Index Fund (NYESArca: EWI) was down 6.1%
  • iShares MSCI Spain Index Fund (NYESArca: EWP) was down 5.7%

For more background, visit our Europe category.

Vanguard European ETF

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.