(Bloomberg) -- European stocks declined after a five-week rally as concern resurfaced over Greece and the timing of an interest-rate increase in the U.S. The Stoxx Europe 600 Index lost 0.6 percent to 391.76 at 9:33 a.m. in London. Greece’s ASE Index slid the most among 18 western-European markets after European officials said the nation’s latest proposals fell short of what was tabled two weeks ago and Greece’s ministers floated the prospect of a referendum if their reforms are rejected. Even after the Stoxx 600 closed at a seven-year high on Friday, shares pared gains as U.S. payrolls rose more than estimated in February, spurring speculation that the Federal Reserve would start raising interest rates sooner. “In the very short-term it seems European markets are overbought and due for a pause,� Raimund Saxinger, who helps oversee $22 billion as a fund manager at Frankfurt-Trust Investment GmbH. “Greece is just a short-term worry. Right now, the U.S. is important. I can’t imagine European stocks just pushing forward if the U.S. corrects.� All industry groups in the Stoxx 600 fell, with real estate companies dropping the most. Greece’s ASE lost 3 percent, heading for its lowest level in almost a month. National Bank of Greece SA and Piraeus Bank SA slid more than 5 percent. The Stoxx 600 completed its longest weekly winning streak since June, closing at its highest level since July 2007, as the European Central Bank said it would start its asset-purchase program. It bought German bonds on Monday, according to two traders in government debt. European GDP ECB President Mario Draghi said the stimulus will spur the euro area’s fastest economic growth since 2007 and return inflation to the central bank’s goal within three years. Germany’s DAX Index has been one of the the best performers this year among developed markets, posting its best start to a year since 1975. It reached more than 20 all-time highs and options traders are showing little concern that the gauge may drop, pushing the cost of hedging to a three-year low. The German stock gauge fell 0.4 percent on Monday. Italian lenders rose after Goldman Sachs Group Inc. wrote in a note that an Italian bank-reform bill will result in a wave of mergers. Banca Popolare dell’Emilia Romagna SC and Banca Popolare di Milano Scarl avanced more than 2.5 percent. To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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