Fears are spiraling that Italy may need a bailout as the yield on the country’s government bonds have surged to 5.4 percent.

Stocks in Europe are plunging and the euro is falling as Euro Zone finance ministers are meeting in Brussels to discuss the financial debt crises in both Greece and Italy.

Ireland, Greece and Portugal have already received massive bailouts from the European Union and International Monetary Fund – and there seems to be little appetite for handing out more loans to beleaguered members of the zone.

Gary Jenkins, head of fixed income research at Evolution Securities in London, told the Guardian newspaper: What will really concentrate the mind of the finance ministers will be the recent upward trend in Italian government bond yields. What would keep me awake at night if I was a European finance minister is that we are only about 2 percent away from a potential disaster scenario.

Jenkins is referring to the fact that when government bond yields hit 7 percent, it is considered an untenable situation.

On Friday, several Italian banks shares plummeted in value over concerns that they were vulnerable to failing the next round of stress tests administered by the EU.

As of mid-Morning trading in Europe, the FTSE-100 index of Britain is down almost 1 percent; while Germany’s DAX index and France’s CAC-40 have declined about 2 percent.

Adam Cole, head of global currency strategy at Royal Bank of Canada-Europe, told Bloomberg. We are seeing contagion spreading to Italy. The bailout facility as it stands would be nowhere near big enough to deal with Italy,

However, Die Welt of Germany reported Monday that the European Central Bank may double its stabilization mechanism to €1.5-trillion.