Stockmarkets have fallen sharply as concerns about high levels of European government debt continue to shake investor confidence.
The euro also fell to its lowest level against the dollar in more than a year, dropping 1.5 cents to $1.3045.
The slide came despite an agreement reached over the weekend to provide Greece with a 110bn-euro ($143bn; £95bn), three-year bail-out package.
Despite the massive loan package agreed by the eurozone and the International Monetary Fund (IMF), doubts still remain about whether the country will be able to raise taxes and cut spending enough to address its longer-term debt problems.
"There are growing worries that [the loans] will be insufficient to cover Greece's funding requirements over the next three years. All of this implies that the euro will remain vulnerable for some time yet," said Mitul Kotecha at Credit Agricole CIB Research.
'Absolute madness'
Portugal and Spain had their credit rating downgraded last week, and any further downgrades would raise the cost of future government borrowing even further, analysts warn.
Spanish Prime Minister Jose Luis Rodriguez Zapatero moved to calm investors by saying his country had a lower debt-to-GDP ratio than the European average.
Spain's debt-to-GDP ratio is just over 52%, compared with Greece's 115%.
He dismissed market rumours that Spain was looking to the IMF for aid as "absolute madness" and "intolerable".
EU leaders had hoped the rescue package would restore investor confidence.
Borrowing costs
In both London and Frankfurt, the leading share indexes closed down 2.6%, while in Paris the main index lost 3.6%.
Shares in Athens closed down 6.7%, while in early trading in New York, the Dow Jones share index fell by 1.5%.
There have also been worries that other European countries, such as Portugal and Spain, may also find it difficult to raise enough money to service their high budget deficits.
The cost of government borrowing rose in both countries on Tuesday as a result.
However, the International Monetary Fund rejected speculation Spain was seeking a loan, saying there was "no truth" to the claims.
'Growing worries'
Global stock markets have been hit in recent weeks by concerns that Greece would be unable to raise enough money to pay off its debts.
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