Stock Markets Fall On Europe Debt Fears

London's FTSE 100 was down 1 percent on July 11.

European stock markets have fallen heavily, weighed down by fears that the eurozone's debt crisis was spreading.

The euro also slumped, while borrowing costs for Spain and Italy rose to 12-year euro-era highs.

In Italy, shares were down nearly 4 percent, in France the CAC index fell 2.7 percent, Germany's Dax lost 2.3 percent, and London's FTSE 100 was down 1 percent. Banks across the continent were hit hard, with Italy's Unicredit down 6.3 percent.

On Wall Street, the Dow Jones was also down in afternoon trading.

In Brussels, European finance ministers were set to discuss a new aid plan for Greece amid fears of contagion spreading to Italy and Spain.

German Chancellor Angela Merkel urged speedy action on new aid for Greece and urged Italy to pass an austerity budget.

compiled from agency reports