MADRID — Spain’s borrowing costs rose to record levels for a third consecutive trading day on Monday on concerns that a deepening recession and the financing problems of its regions would force the government to seek a full-fledged bailout.


Market regulators in Spain and Italy announced bans on stock short-selling, as Spanish turmoil and fresh concerns about Greece’s status in the euro zone sent European stocks down broadly and sharply.


The yield, or interest rate, on 10-year Spanish government bonds was at 7.4 percent in late afternoon trading on Monday, having breached 7 percent last Thursday — a level that many analysts fear could eventually shut Spain out of public markets and force it to seek a Greek-style bailout.


The concern, though, is that Europe would be hard-pressed to find the money to salvage an economy the size of Spain’s — the euro zone’s fourth largest after Germany, France and Italy.


Spain completed its third consecutive quarter of recession in June, according to data published Monday by the Bank of Spain. The economy contracted by 0.4 percent from the previous quarter.


Stocks in Europe followed Asian markets sharply lower Monday, and the euro hit a new two-year low against the dollar. In late European trading, the main stock indexes were down more than 7 percent in Greece; more than 3.5 percent in Italy, 3 percent in Spain and Germany, and more than 2 percent in France and Britain.


Wall Street opened for trading with a skid, too, with the broad Standard & Poor’s 500-stock index down 1.5 percent and the Dow Jones industrial average off more than 200 points in early action.


Helping stoke the turmoil, representatives from the trio of big lenders to Greece are set to arrive in Athens on Tuesday to examine that country’s progress on meeting the terms of its bailout program. There are growing concerns that Greece will not be able to live up to its commitments and that as soon as September the so-called troika of lenders — the European Central Bank, the International Monetary Fund and the European Union — will refuse to dispense more money.


Last Friday, the European Central Bank said it was suspending loans to Greek banks.


In recent days, the troika of lenders have signaled that a decision on giving any more money to Greece, which is verging on bankruptcy and has survived on funds from European taxpayers for the last three years, will hinge on how the lenders’ examiners asses how well the Athens government is meeting its targets for budget cuts and other measures.


But Prime Minister Antonis Samaras is under pressure to make good on election pledges to soften some of the harshest austerity terms linked to Greece’s loans.


Depending on the findings of the troika’s report, “everyone will make their own decisions” about whether to extend more money to Greece, said a person involved with the lenders’ review, who was not authorized to speak publicly.


The I.M.F. said in a statement that the fund was “supporting Greece in overcoming its economic difficulties,” adding that the review would be aimed at “how to bring Greece’s economic program, which is supported by I.M.F. financial assistance, back on track.”


The fund has said it wants to see what sort commitment the government in Athens is making to carry out policies linked to its bailout before determining the nature of its involvement in Greece’s bailout.


On Monday, German officials continued to sow doubt about Greece’s future in the euro monetary union. The German finance minister, Wolfgang Schäuble, said in an in interview published Monday in the German tabloid Bild that Greece must renew its efforts to comply with the terms of its bailout.


“If there were delays, Greece must make up for them,” he said. The German economics minister, Philipp Rösler, said separately that the prospect of a Greek exit from the euro had “lost its horror.”