Europe panics as Italy teeters

BRUSSELS - Panic and fear spread through European markets on Tuesday, as Italy and Spain seemed on the verge of being thrust into the debt crisis after investors dodged their bonds.

The Italian government is calling for an emergency meeting to deal with the confidence crisis while the Paris-based Organisation for Economic Co-operation and Development (OECD) insisted that the situation in Europe's third-biggest economy is "different" from the debt problem of Greece.

European stocks tumbled on Tuesday. Italian bank shares suffered heavy losses and the euro was sinking to a four-month low of $1.38 by mid-morning in Europe.