The iShares MSCI Italy (NYSEArca: EWI) was down more than 4% in early U.S. trading Monday as renewed European debt concerns and negative political headlines hit the region’s stock markets.

The iShares MSCI Spain (NYSEArca: EWP) dropped 3% and Vanguard MSCI Europe ETF (NYSEArca: VGK) slipped about 2%. In currency markets, CurrencyShares Euro Trust (NYSEArca: FXE) was off nearly 1%.

Italy’s FTSE MIB dropped sharply amid a criminal investigation into derivatives trading by banks, Dow Jones Newswires reported. “Also, former Prime Minister Silvio Berlusconi, who is gaining popularity in pre-election polls, promised to lower taxes, which many fear suggests the country could put pressure on the budget,” it added.

In Spain, Prime Minister Mariano Rajoy promised to disclose his tax returns and financial assets in order to stem a scandal over allegations of cash payments to him and other leaders of his party, according to the report.

“European stocks dropped the most in six weeks as Spanish and Italian banks retreated with the nations’ government bonds amid signs of returning political uncertainty in the region’s weakest economies,” Bloomberg News reported.

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