By Tommy Stubbington 

European stocks slipped on Friday ahead of the referendum in Greece this weekend, which could set the country on course for a messy exit from the eurozone.

The Stoxx Europe 600 was 0.5% lower late afternoon, following a small decline on Thursday. The index has fallen nearly 4% this week as Greece's debt crisis intensified.

If Greeks reject the austerity demands of the country's creditors in Sunday's vote, many investors expect much sharper falls next week.

But with opinion polls indicating the referendum will be close, they have been reluctant to make any large bets heading into the weekend.

Germany's DAX fell 0.5%, France's CAC-40 was down 0.7%, while the U.K.'s FTSE 100 lost 0.5%.

U.S. markets were closed for a holiday.

"The market seems to be in a position-reduction mode as it waits for the weekend action to begin in Greece," wrote foreign-exchange strategists at Citigroup.

In currency markets, the euro edged up 0.1% against the dollar to $1.1100. The common currency had made small gains against the buck on Thursday after data showing weaker-than-expected U.S. job growth.

In commodities, Brent crude oil was down 1.2% at $61.33 a barrel, and gold rose 0.3% to $1,167.20 an ounce.

Write to Tommy Stubbington at tommy.stubbington@wsj.com