Europe close: Reports of possible restrictions for UK travellers weigh on stocks
European shares tumbled into the red on Monday with travel stocks under pressure after Germany pushed the European Union to designate the UK a "country of concern" and introduce strict quarantine measures for British travellers.
The pan-European Stoxx 600 finished 0.59% lower to 454.94.
Spain's Ibex 35 however gave back 1.99% to see the session out from 8,913.7 - the country is a major holiday destination for Britons.
Milan's FTSE Mibtel was also lower, retreating by 1.11% to 25,227.10, alongside a 0.98% drop for the Cac-40 to 6,558.02.
German chancellor Angela Merkel is understood to be pushing the proposal, which will apply regardless of whether or not travellers have been fully vaccinated, because the Delta variant is now so widespread in the UK. European officials will discuss the proposal this week.
Shares in British Airways-owner IAG fell 6%, with budget airlines Ryanair, Wizz and easyJet all lower. Rolls-Royce which makes and services the wide body aircraft engines used in long-haul flights, was also under pressure.
Whitbread, owner of the Premier Inn budget hotel chain fell 3%. Shares in holiday firm TUI and cruise ship operator Carnival were also lower.
The UK government is looking to operate a traffic light system for overseas travel this summer. Last week it announced several destinations, including Malta, the Balearics and Madeira, would be placed on a green list from 30 June.
Travellers returning from green list countries do not have to isolate. The government also wants to allow fully-vaccinated travellers to be able visit amber list countries without having to isolate upon their return, but the plan faces significant issues, including how unvaccinated children will be affected and how best to check vaccination status.
"We’ve heard this morning that German Chancellor Angela Merkel wants to ban all UK travellers from coming into the EU due to rising Delta variant cases," said Michael Hewson, chief market analyst at CMC Markets UK.
"While this isn’t a view that is shared across Europe, Spain has announced that they want to see a proof of vaccination, or a negative covid test for those who want to go to the islands on the UK’s green list. Portugal is also insisting on certain safeguards, but it's not just a Europe problem as the Delta variant starts to spread across Asia."
The World Health Organization on Friday urged fully-vaccinated people to continue to wear masks as the highly contagious Delta variant, which started in India, spreads rapidly throughout the globe, leading many countries to re-impose tighter restrictions.
In the UK, new Health Secretary Sajid Javid was set to update parliament on when Britain can expect to further ease Covid-19 measures. Restrictions are currently due to end on July 19, the date already having been extended due to the spread of the delta variant.
In other company news, Burberry Group fell to the bottom of the Stoxx, down almost 9% as the high-end fashion retailer said chief executive Marco Gobbetti was resigning to join Italian luxury group Salvatore Ferragamo.
Ferragamo shares initially jumped 2.9% on the news only to end the day 3% lower.
On the upside, Finnish telecoms giant Nokia topped the index with a rise of almost 6% after a Goldman Sachs upgrade.