LONDON - The euro zone's sovereign debt crisis took a turn for the worse Monday as Cyprus said it would seek aid from the euro zone's bailout funds. "The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spill over effects through its financial sector, due to its large exposure in the Greek economy," the government said in a statement. Earlier in the day, the ratings agency Fitch downgraded the island nation's government debt to junk status. Cyprus last year received a three-year, €2.5 billion loan from Russia. Greece, Portugal and Ireland have already received bailouts. In addition, the new Greek finance minister, Vassilis Rapanos, tender his resignation on Monday. Mr. Rapanos was hospitalized Friday after being treated for intense abdominal pain, nausea, sweating and dizziness. Greece's new prime minister, Antonis Samaras, will also miss a crucial summit meeting of European Union leaders scheduled for Thursday and Friday in Brussels. Mr. Samaras left the hospital Monday and is recovering from eye surgery. Greece will be represented by a ministerial delegation at the summit meeting, where E.U. officials are expected to debate relaxing the terms of Greece's bailout. Even before Cyprus made its request for a bailout, stock markets plunged in Europe and the euro dropped amid doubts that E.U. leaders will achieve the far-reaching breakthrough needed to resolve the debt crisis. "This will be a decisive week for Europe," the German foreign minister, Guido Westerwelle, said Monday at a meeting of E.U. foreign ministers in Luxembourg. The Euro Stoxx 50, a measure of European blue-chips, closed 2.4 percent lower at 2,134.79 points. In Madrid, the benchmark IBEX 35 tumbled 3.5 percent to 6,638.40, while in Milan the FTSE MIB slid 4 percent to 13,113.78. In London, the FTSE 100 fell 1.1 percent to 5,456.03. In Paris, the CAC 40 fell 2.1 percent to 3,026.69. In Frankfurt, the DAX fell 1.9 percent to 6,146.61. Wall Street benchmarks were also sharply lower in midday trading in New York. The Dow Jones industrial average was off 1.3 percent at 12,475.87 points. The Standard & Poor's 500-stock index fell 1.8 percent to 1,311.59. The Nasdaq composite index fell 2 percent to 2,834.30. The euro was at $1.2485, down from $1.2560 late Friday in New York. Asian stocks were also slightly lower Monday, with the Nikkei 225-stock index in Tokyo off 0.7 percent at 8,734.62 and the Hang Seng index in Hong Kong down 0.5 percent at 18,897.45. On Monday, Spain made a formal request for up to €100 billion, or $124 billion, in aid for its banks, but how the money is to be disbursed is still the subject of negotiation. The Spanish government wants the aid to go directly from European bailout funds to the banks. Euro zone rules now require that the aid be funneled through the government in Madrid, which would add to Spain's sovereign debt. European leaders may discuss whether to change those rules at their summit meeting in Brussels at the end of the week, at which they will also debate plans to create an E.U. banking union, including a system to wind up insolvent banks and the establishment of a central deposit guarantee fund. In addition, the European Central Bank would have a bigger supervisory role. Officials say these measures would not require changes to the E.U. treaty, but they could not be operational until 2013 at the earliest. Bringing about even deeper integration would take longer. "It is a starting point, it is not an end game," said a European official who spoke on the condition of anonymity due to the sensitivity of the discussions. We are not going to wake up on June 30 and find there is a banking union, a fiscal union and a political union. In his formal request for banking aid, the Spanish economy minister, Luis de Guindos, said in a letter Monday to Jean-Claude Juncker, head of the Eurogroup of euro zone finance ministers, that the final amount of the financial assistance would be set at a later stage. Audit reports released last week indicated that Spain would need as much as €62 billion to shore up a banking system brought low by the country's real estate crash. Olli Rehn, a vice president of the European Commission responsible for economic and monetary affairs, welcomed the request from Spain, saying he was confident a detailed agreement could be reached "in a matter of weeks." On Monday the benchmark Spanish 10-year bond traded to yield 6.454 percent, up 20 basis points, while the comparable Italian bond was at a yield of 5.886 percent, up 11.2 basis points. Paul Geitner contributed reporting from Brussels, Liz Alderman from Athens and Jack Ewing from Frankfurt.