European and U.S. stock markets are falling sharply as traders voice new concerns about political uncertainty in Greece and whether it could become the first country to drop out of the 17-nation euro currency union.

Stock indexes in London, Paris and Frankfurt all dropped by more than two percent in afternoon trading Monday, while major exchanges in New York dropped about 1 percent as trading opened for the week.

The value of the euro currency also fell below $1.29 for the first time in nearly four months.

One European market analyst, Theodore Krintas, said the inability of Greek political leaders to form a new government and the uncertainty of whether they will adhere to an austerity program to cut the country's deficit is leading to turmoil on financial markets.

“I believe that the markets would like the country to vote or actually to take on a new vision, a viable vision for the next 10 to 15 years. Markets are very comfortable with discounting the next 10 to 15 years and very, very uncomfortable with uncertainty and what we are feeding the markets, what Greece is feeding the markets the past one and a half years now is uncertainty and uncertainty only.”

European leaders pressured Greece to adhere to terms of the agreement they reached earlier this year calling for sharp social spending cuts, higher taxes and elimination of government jobs in exchange for approving the second international bailout for the country in the last two years.

As the finance chiefs of European governments gathered in Brussels for a meeting, their message for Athens was stern. Spanish Foreign Minister Jose Manuel Garcia-Margallo said Greece's continued role in the eurozone depended on it “complying with the rules of the game.”

The German finance ministry said the “only and right” position for Greece is to adhere to its pledge on austerity measures.