Stock markets across Europe fell and the euro dropped to a near four-year low against the dollar over new concerns about escalation of the Euro zone debt crisis. In London, the FTSE index dropped by 2.4 per cent to close at 4,940 points. In Frankfurt, Germany's benchmark DAX index closed 2.34per cent lower at 5,670points. In Paris, the CAC 40 fell by 2.9 per cent, Spain's IBEX index in Madrid by 3.05 per cent, the Zurich SMI index by 1.85 per cent and Lisbon's BVL index by 2.65 per cent.The euro dropped by 0.8 per cent to close at 1.228 against the dollar in European trading.Investors' worries about insolvency in Spain's banking sector following last weekend's government bailout of regional savings bank Cajasur. The economic woes of Spanish banks are spreading to other eurozone nations and triggering a massive sell-off of shares from Dublin to Madrid. After the Cajasur rescue, four other Spanish banks announced their intention to merge and form a new group to strengthen their solvency and assets. But market analysts said there are several other banks like Cajasur where the risk of insolvency is great.