The joint European Union and International Monetary Fund salvage package for debt-stricken Greece is "perceived as an annoyance by some, but is absolutely without any alternative," said Christian Brand, President of the VOEB German association of public-sector banks, Monday.

The euro slid to a four-year low on Monday on sovereign debt worries and fears that planned belt-tightening measures will hurt euro zone growth, fuelling concerns the single currency may face free-fall.

After falling below the post-Lehman October 2008 low around $1.2330, where stop-losses from model accounts were said to loiter, the euro extended its losses. The euro, it is being reported, fell as far as $1.2234 on trading platform EBS; its lowest since April 2006.

Resulting in making the euro, the worst-performing major currency, it has fallen more than 7 percent against the dollar this month, and is about 14 percent lower for the year.

The widening euro zone problems had prompted a money market dollar liquidity shortage said the analysts. "If the sharp deterioration in money markets persists into this week, look for central bank action to lower the cost of access to their dollar funding facilities," Citibank analysts said in a note.

A 750 billion euro rescue parcel, from the European Union, and the International Bond Fund aimed at shoring up euro zone bond markets has done little to underpin the euro. This has further resulted in panic.

Traders fear the austerity measures announced by Greece, Spain and Portugal would hurt growth in the near term and force the European Central Bank to keep rates low in the medium term.