It's the financial stocks.
Credit Agricole fell 6.8 percent, Dexia slipped 11.2 percent and Societe Generale was down 6.4 percent.
Commerzbank tumbled 15.7 percent on big volumes.
HBOS, due to be taken over by Lloyds TSB, was down 14 percent.
Lloyds fell 5.8 percent and BNP Paribas was down 3.4 percent. Paribas took control of the Belgian and Luxembourg businesses of troubled financial group Fortis in a complex rescue that will make Belgium the French bank's biggest shareholder.
Under a share swap announced by Belgian Prime Minister Yves Leterme and BNP Paribas chief executive Baudouin Prot at a late night news conference, BNP will get 75 percent of Fortis Bank Belgium and all the group's Belgian insurance operations.
In exchange, the government of Belgium will receive an 11.7 percent stake in BNP through the issue of new shares worth 8.25 billion euros ($11.43 billion).
BNP also agreed to buy 66 percent of Fortis Bank Luxembourg in exchange for a smaller stake for the Luxembourg state.
Trading in Icelandic financial firms was a suspended on Monday.
The stock exchange said in a statement the halt covered trading in all financial instruments issued by Exista, Glitnir, Kaupthing, Landsbanki, Straumur-Burdaras and SPRON.
Over the weekend, German officials clinched a renewed rescue deal for property lender Hypo Real Estate and UniCredit, Italy's second-biggest bank, announced plans to raise new capital.
But Hypo Real shares were down 26 percent after slumping as much as 48 percent in early trade.
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