The interest rate on Spain's ten-year bonds surged to a new high on Monday since the euro was first introduced in 1999.

The rate jumped to seven-and-a-half percent on Monday from seven-point-two percent last Friday. It surged amid concerns that the Spanish government will have to get a financial bailout as it can’t borrow money from the financial market even if it issues state bonds.

The interest rate on Italy’s ten-year bond also went up to six-point-three percent, the highest figure to be recorded since January 19th.

Meanwhile, European stock prices plunged more than two percent following reports that Greece is likely to default sometime in September.

The Dow Jones Industrial Average at the New York Stock Exchange also slipped more than one percent at one time on Monday but closed after posting a smaller decline.