Stock markets in Europe and the United States fell sharply on Monday, on news that Greece is likely to miss targets for cutting its budget deficit.
Although a draft austerity budget was adopted on Sunday, the Greek government is blaming the shortfall on a deepening recession.
Athens announced that the 2011 deficit is projected to be 8.5% of GDP, down from 10.5% in 2010, but short of the 7.6% target set by the EU and IMF.
Bank shares had some of the largest falls in European stocks, because of concern about their exposure to Greek debt.
The FTSE 100 fell 2%, the CAC in Paris lost 3% and the DAX in Frankfurt fell 2.5%. Wall Street also opened lower and stayed in the red.
The Dow Jones Index dropped 214 points, almost 2%, to 10,697.
The Nasdaq Composite was down 70 points, nearly 3%, at 2344.
Hong Kong's main index earlier closed down 5% and Australia by 2.7%.
Franco-Belgium bank Dexia fell as much as 14% after Moody's said it could be downgraded because of its exposure to Greece. Dexia recovered slightly to 9.7% in afternoon trading.
In France, Societe Generale was down 5.6%, BNP Paribas fell 6% and
Credit Agricole dropped 4.5%.
In Germany, Commerzbank fell 7.5%, while Deutsche Bank was 3% lower.
In Britain, shares in Barclays were down 4.7% and Royal Bank of Scotland fell by 5%.
Brent crude oil was trading at $US106.38 per barrel and gold was trading at $US1653.09 per ounce.
Emergency board meeting
Dexia has called an emergency board meeting amid fears over its exposure to Greek government debt.
Dexia's exposure to government debt there is 3.4 billion euros. Its total exposure to Greece, which includes private-sector borrowers, is 4.8 billion.
The bank has already written off 21% of its Greek debts, but eventual losses to lenders could be in excess of 50% of the amount owed by Greece.
It's been reported the French and Belgian governments would discuss measures to shore up Dexia's balance sheet, in which they have a stake following a bailout at the height of the financial crisis in 2008.