BRUSSELS - The world market panic that started the week looked all too familiar: an alarming reminder of last summer's financial storm brought on by the eurozone debt crisis.
And much like last year, European leaders hold few tools to stem the chaos in a swift and convincing fashion.
"The problem is about the same as last year, except the situation is much more serious," a European diplomat told AFP.
Almost exactly a year ago, eurozone leaders called an emergency summit where they hastily cobbled together a second bailout for Greece that included new loans and a massive writedown of Greek debt held by private investors.
But lacking in details, instead of offering a reprieve the measures heightened fears of contagion sending borrowing prices for core eurozone countries such as Italy and Spain soaring.
A year later, Greece's survival in the eurozone remains very much in doubt.
And now Spain, the eurozone's fourth biggest economy, is also in danger: mired in recession, its banks are on the brink of collapse after a decade-long real estate bubble popped.
The European Union and International Monetary Fund have agreed to put as much as 100 billion euros into rescuing Spain's troubled banks, but most investors now believe that will not be enough. They fear that Spain now needs a full rescue as handed to Greece, Ireland and Portugal is now needed.
It is that fear that is driving the stock markets and the euro itself sharply downward.
"Contagion fears have battered European equity markets" as a "perfect storm of fears about an imminent Greek exit, and the solvency of Spanish and Italian regions has seen markets drop sharply," said Michael Hewson, Senior Market Analyst at CMC Markets UK.
But despite the explosive situation, Italian Prime Minister Mario Monti said Monday there was no need to call eurozone leaders together at the height of summer in a repeat of last year.
In theory, the 17 leaders of the single currency area are to meet in October, after finance ministers meet in late August or September to review the situation in Greece and Cyprus -- but not Spain.
"We can't very well meet everytime the markets go crazy," a European government source said.
But even though nothing is planned between now and autumn, diplomatic sources said that could be quickly changed, with officials on stand-by.
The most pressing worry for the summer is that the financial tools created to face the crisis are not yet in place. The very measures that had made a two-day summit in late June a reported success cannot be applied.
For one thing, a new banking supervisory regime across Europe will only be up and running some time in 2013.
And the European Stability Mechanism, the permanent rescue fund set up to provide emergency funding to fragile sovereigns and banks, will only be operational in September at best: a key decision is pending at Germany's constitutional court.
Until then, the ESM's predecessor, the European Financial Stability Facility holds whatever financial rescue firepower there is.
But the EFSF, created in the early days of the crisis, only holds 200 billion euros, far too little to save a country like Italy, and its nearly two trillion euros of public debt.
"If an intervention is needed in August, there's a problem," a European diplomat said.
Last summer's market panic was finally tamed once the European Central Bank intervened, successfully stabilising Italian and Spanish debt prices.
But for now, the ECB remains reluctant to resume buying up bonds of eurozone nations, known as the Securities Market Programme.
According to data published on the ECB's website, the central bank did not buy any sovereign bonds last week and has not done so since February.
For the ECB, with the crisis in its third year, it is now up to governments to finally take over.
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