London's FTSE 100 () index finished its trading session down 3.2%, while France's CAC 40 ( ) dropped 4%. In Germany, the DAX ( ) shed 5.3%.
The move followed more moderate drops in Asia's stock markets. Japan's Nikkei 225 () index finished Monday trading down 1.9%, while Hong Kong's Hang Seng ( ) index shed 3% for the day.
"Europe's faltering management of its crisis is starting to blur the line between a banking crisis and a euro crisis, resulting in a new vote of no confidence from the markets," Lena Komileva, an analyst for Brown Brothers Harriman in London, wrote Monday in a note to clients.
"Political brinkmanship" has put the possibility of a "disorderly" currency crisis and a break-up of the euro back on the table, she said.
"There no resolution to the situation in Europe," investment manager Randy Warren, who manages $75 million in assets for Warren Financial Services, said last week of the uncertainty in Europe. "The waves of fear just recede for a while."
U.S. stock markets are closed Monday for the Labor Day holiday.
On Friday, U.S. stocks ended sharply lower following a government report showing that no net new jobs were created in August -- sparking concerns that the U.S. may be headed for another recession. The Dow Jones industrial average shed 2.2% on Friday, while the S&P 500 index lost 2.5% and the tech-heavy Nasdaq dropped 2.6%.
|What we want Apple to unveil at WWDC|
|Millennials squeezed out of buying a home|
|7 traits the rich have in common|
|Big Data knows you're sick, tired and depressed|
|Your car is a giant computer - and it can be hacked|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.08%||4.12%|
|15 yr fixed||3.23%||3.21%|
|30 yr refi||4.14%||4.12%|
|15 yr refi||3.28%||3.21%|
Today's featured rates: