European stocks tumbled and the euro slid on Monday ahead of a major EU summit this week that analysts said was unlikely to deliver concrete steps to extinguish eurozone debt fires.
London's benchmark FTSE 100 index fell 1.14 percent to 5,450.65 points, while in Frankfurt the DAX 30 dropped 2.09 percent to 6,132.39 points, and in Paris the CAC 40 sank 2.24 percent to 3,021.64 points.
Madrid dropped 3.67 percent, Milan tumbled 4.02 percent, and Athens plunged 6.84 percent.
In foreign exchange deals, the euro dropped to $1.2486 from $1.2569 late on Friday in New York. The dollar fell to 79.51 Japanese yen from 80.43 yen.
Spanish and Italian bond yields rose also reflecting rising concerns, with the rate of return demanded by investors to hold Spanish 10-year debt rising to 6.501 percent in late trading compared to 6.317 percent at Friday's close.
The yield on 10-year Italian bonds rose 5.916 percent from 5.787 percent.
Meanwhile, the yield on German 10-year bonds, considered a safe-haven investment in the eurozone, fell to 1.482 percent to 1.580 percent.
"In the absence of any economic data overnight in Asia and during today we are seeing the troubles of the eurozone resonating throughout the market as the main focus yet again," said Spreadex trader Jordan Lambert.
"Naturally investors will earnestly look towards the two-day EU summit later this week for some kind of crisis-ending solution although judging on the effectiveness of the numerous prior summits many will not be building their hopes too much."
Europe's leaders gather for a summit in Brussels on Thursday and Friday under intense global pressure to head off a potentially catastrophic economic collapse.
Greece was to use the meeting to request revisions to its EU-IMF bailout deal. Greece's newly-elected government wants the bailout conditions eased, including a delay in a deficit reduction deadline to 2016 from 2014.
And this as the relentless two-year sovereign debt crisis has infected Spain, the eurozone's fourth-largest economy, and is threatening Italy, its third-largest, after bailouts for Greece, Ireland and Portugal.
Spain formally requested a rescue loan of up to 100 billion euros ($125 billion) from its eurozone partners in a letter released on Monday.
No new figures were included in the letter, after conclusions by independent consultants last week said stricken Spanish banks could need up to 62 billion euros to survive a severe, three-year financial slump.
"Given that economic activity in Spain remains muted... it seems likely that this so called adverse 62 billion-euro figure could well rise rapidly," said Michael Hewson, a senior analyst at CMC Markets trading group.
"Furthermore uncertainty remains as to how the bailout will be applied and under what conditions, due to disagreements amongst EU leaders as to how the Spanish bank sector should be restructured."
Meanwhile Cyprus was set to ask eurozone partners later on Monday for financial help to prop up the island's banking system, a European diplomatic source said.
Fitch Ratings downgraded Cyprus's sovereign ratings and put them on negative outlook, citing the exposure of the eurozone island's banks to toxic Greek debt.
Fitch Ratings said it lowered Cyprus' long-term foreign and local currency issuer default rating to BB+ from BBB-, mirroring a similar downgrade by Moody's Investors Service on June 13.
Fitch said the downgrade was "principally due to Greek corporate and households exposures of the largest three banks -- Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank -- and to a lesser degree the expected deterioration in their domestic asset quality."
Shares in beleaguered telecom giant Nokia plunged 10 percent to a 16-year low of 1.73 euros after Microsoft said its Windows 8 upgrade would not work on Nokia's new flagship smartphone, the Lumia 900 model.
Across the Atlantic, US stocks traded sharply lower, with the Dow Jones Industrial Average giving up 1.34 percent to 12,471.33 points approaching midday.
The S&P 500 dropped 1.78 percent to 1,311.25 points, while the tech-rich Nasdaq sank 2.12 percent to 2,830.96 points.
Asian markets fell Monday on euro pessimism, with Tokyo sliding 0.72 percent, Seoul diving 1.19 percent, and Sydney down 0.50 percent.
Shanghai tumbled 1.63 percent, and Hong Kong closed 0.51 percent lower.