The Associated Press
Europe is on the brink again. The crisis over too much debt in the 17 countries that use the euro flared dangerously on Monday.
Fears that Spain was next in line for a full-blown government bailout intensified following a weekend of bad news about the country's economy. Madrid's borrowing costs on its 10-year bonds — an indicator of market confidence in a country's ability to manage its debt — hit an alarming record of 7.56 percent during morning trading, pushed up by reports that the country's indebted regions might join its banks in requesting expensive bailouts.
Stocks slid. Germany's DAX plunged 2.7 percent. Britain's FTSE was off 2 percent and France's CAC 40 fell 2.5 percent. The euro slipped just below $1.21 against the dollar, its lowest reading since June 2010.
Concern over Spain increased Monday after the country's central bank said the economy had contracted by 0.4 percent during the second quarter. The government predicts the economy won't return to growth until 2014 as new austerity measures hurt consumers and businesses.
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