Hopes that a change of government in Spain would relieve pressure on European markets have proven unfounded, as shares across the continent traded down strongly on fears over the US and French economies.
Worries that a US congressional committee would fail to agree on measures to trim the country's budget deficit, mixed with concerns raised by the rating agency Moody's over the renewed challenges to France's finances emerging from the eurozone.
By 11:00 GMT the FTSE 100 was down 2.05%, while the French CAC-40 and German DAX had shed 2.49% and 2.48%, respectively.
"Elevated borrowing costs persisting for an extended period would amplify the fiscal challenges the French government faces amid a deteriorating growth outlook, with negative credit implications,"Alexander Kockerbeck, senior credit officer at Moody's, said in a weekly credit outlook note on Monday morning.
France's triple-A rating is not under imminent threat, the note said, but its 'stable' outlook is. The country's rating has implications beyond Paris' ability to borrow. The eurozone crisis response is partly founded on a fund - the European Financial Stability Facility (EFSF) - which issues bonds backed by the single currency area's top-rated economies.
Should France lose its rating, the EFSF could find its cost of borrowing rise, making it a far less efficient bailout mechanism than originally envisioned.
Newsflow from the 'periphery' of the eurozone was not overwhelmingly bad, despite the Greek opposition leader, Antonis Samaras, refusing to sign a pledge to support austerity measures. Samaras has said that his word should be enough, and will not give a written reassurance.
Former Italian prime minister Silvio Berlusconi has also reared his head, warning his successor, the economist Mario Monti, that he will still have to listen to parliament, and Berlusconi's own "People of Freedom" party.
In Spain, Mariano Rajoy's centre-right Popular Party won a majority in general elections over the weekend on a platform of resolving the country's economic woes through big reductions in government spending.
The country's bonds had taken a battering over the previous week, coming close to the 7% on ten-year debt that precipitated the collapse of Italy's government. Only strong buying from the European Central Bank (ECB) kept the cost of borrowing in check.
Spain's economic problems are different in scale and scope from Italy's. The Spanish national debt is a relatively modest 60% of gross domestic product (GDP), compared to Italy's 120%, but its banking sector is seen as highly vulnerable to future shocks. If the new government was forced to bail out or recapitalise the banks, it would throw its debt reduction plans into chaos.
The markets know this, and while Spain had a brief stay of execution while attention was focused on Italy, it is now in the firing line again, with yields rising again on Monday, albeit to levels still shy of 7%.
Europe is still, analysts said, the biggest challenge to the world economy, but only just. The US "super committee" was tasked with coming up with $1.2tr (£766bn) in debt reduction measures by November 23, with a cost estimate of the plan due out on Monday night. A failure to come up with a plan should trigger automatic cuts to spending, which are likely to hit US growth, which in turn would have a knock-on effect on the world economy.
"Markets haven't been giving much focus to the fiscal issues in the US in recent weeks as there are much larger immediate issues at stake in Europe," Deutsche Bank credit strategist Jim Reid wrote on Monday morning. "This story is unlikely to fully knock Europe off the front pages but it has ramifications for the fiscal outlook over the next couple of years. If the automatics cuts are activated then the US will be going through the same austerity that has not proved particularly successful so far in Europe with regards to growth."