Global equity markets are tumbling this morning as the eurozone crisis once again takes centre stage, with Spain’s debt costs leaping to a new record high and speculation returning Greece will exit the single currency.

As equity markets tumble, 10-year gilt yields have set a new record low of 1.444%, breaking through the previous low of 1.47%, the DMO said. US treasury yields also tumbled to a new record low of 1.41%, while German bund yields dropped to 1.13%, as investors dumped risk asets and fled to safe havens.

The latest flight to safety came as it emerged two regions in Spain may need bailing out, and as talks resurfaced that Greece may exit the eurozone shortly if it fails to meet the terms of its rescue plan.

Greece’s creditors meet this week amid doubts that the country will meet its bailout commitments. German Vice Chancellor Philipp Roesler said he’s “very skeptical” that European leaders will be able to rescue Greece, according to Bloomberg.

Meanwhile Spain faces the risk of a full blown sovereign bailout after talk that a second region – this time Catalonia – may need emergency funding from Madrid. Valencia has already asked for assistance, and the speculation forced Spanish government bond yields to a record high of 7.512%, according to Reuters data.

As investors panicked, equities suffered heavy losses. The FTSE 100 is currently down 1.7% at 5,517 points, while the German Dax is off 1.3% at 6,547.

Earlier Asian shares retreated on eurozone worries, with the Nikkei 225 down 1.9% at 8,510 points, and the Hong Kong Hang Seng down 3.5% at 18,984.