European markets opened sharply lower and quickly dropped to as low as 2% after Greece and Ukraine talks dominated headlines.
Market sentiment was weak at the opening after Prime Minister Alexis Tsipras on Sunday confirmed that his government has not abandoned its plan to demand a rollback of austerity plan required as a part of international bailout.
Tsipras confirmed that the Greek government is still planning to increase minimum wage and salaries of government employees and also increase the lower threshold for income tax.
The government is still looking to halt payment on the bailout loans and ask for an interim plan till June from international lenders.
The tough talk in the parliament had immediate negative impact to the domestic and regionís stock and bond markets.
The ASE Index in Athens dropped as much as 6% and market indexes in Italy and Spain declined more than 2%. Greek banks plunged more than 10%.
Greek 10-year bond yield increased three full points to 21.65%, the largest one-day increase in three years.
The bond market tensions rose as at least six governments bonds are scheduled to raise at least 19 billion euros.
The Netherlands is planning to raise as much as 3 billion euro bonds maturing in 2020 on Tuesday and Portugal is planning to a debt offering of as much as 1.25 billion euros of bonds expiring in 2025.
Separately, German Chancellor Angela Merkel was negative on the likelihood of ending Ukraine crisis in the near future.
Russiaís Foreign Minister Sergie Lavrov said at a conference in Munich, Germany that the U.S. sending arms to support Ukraine will deepen the crisis.