Europe's main markets closed sharply lower on Monday over the escalating Greek crisis, with the eurozone's periphery nations taking the biggest hit.

Frankfurt's DAX 30 lost 3.56 percent to 11,083.20 points and the CAC 40 in Paris shed 3.74 percent to 4,869.82 points while London's benchmark FTSE 100 index of top companies fell 1.97 percent to 6,620.48 points.

Eurozone nations with high debt burdens were hardest hit, with both Lisbon and Milan plunging more than 5 percent and Madrid slumping 4.56 percent.