(Changes dateline, adds quotes, previous TOKYO)
* Euro falls on market uncertainty ahead of EU summit
* Safe-haven Swiss franc hits record high vs euro, dollar
* U.S. debt ceiling saga adds to investor unease
By Neal Armstrong
LONDON, July 18 (Reuters) - The euro fell broadly on Monday, with a euro zone sovereign debt crisis that looks to be getting worse pushing nervous investors towards perceived safe-havens such as the Swiss franc and yen.
European bank stress test results released on Friday did little to calm jitters, and attention is shifting to the next emergency meeting of EU leaders scheduled for Thursday, when a second bailout package for Greece will be under discussion.
German Chancellor Angela Merkel called on Sunday for private investors to make a major contribution to bailing out Greece. Officials proposed a range of schemes for the European Financial Stability Facility to finance a buy-back or a swap in which private owners of Greek government bonds would accept cuts in the face value of their holdings.
However, clarity about a second bailout of Greece may bring only temporary relief for the euro if investors decide the single currency area's problems have become systemic and require a region-wide solution.
"It seems like a vicious circle with Germany's Merkel not budging on private sector involvement and the ratings agencies saying private involvement would constitute a selective default," said Tom Levinson, currency analyst at ING.
"With ECB (president) Trichet seeing no way defaulted debt could be used as collateral, it's difficult to see the cycle being broken at the moment."
The euro fell sharply against the Swiss franc early in the Asian trading day to change hands at a record low of 1.1365 , according to dealers, down from 1.1501 late in New York on Friday. The pair bounced to 1.1446 in European dealing.
The franc has been the G10 currency of choice for investors and traders seeking liquidity and relative safety from concerns that the euro zone's sovereign debt crisis could spread to countries such as Spain and Italy.
Italian and Spanish government bonds came under further pressure on Monday, pushing their yield premiums over benchmark German Bunds up on investor concern over the failure of euro zone policymakers to quickly agree on a strategy for tackling the debt crisis.
The euro was down 0.8 percent versus the dollar from late Friday in New York at $1.4034 . Technical analysts said next support was the 200-day moving average around $1.3912. The euro fell over one percent against the low-yielding yen to 110.66 yen .
U.S. DEBT SAGA
Dealers have had some trouble pushing the euro out of a trading range against the dollar in the past three months, with political negotiations over the U.S. debt ceiling running dangerously close to an Aug. 2 deadline after which Washington would be unable to pay its bills.
Republican and Democratic senators sought on Sunday to craft a plan that could avert a government debt default should the talks remain stalemated. Even if they do come up with a plan, though, Standard & Poor's said last week it may still cut its Aaa rating on U.S. debt if the agency is not convinced of medium-term fiscal stability.
A Citi index of hedge fund positioning, which tracks the correlation between fund returns and currency moves, showed bets on the euro at overextended levels -- a somewhat counterintuitive signal that suggested hedge funds were being contrarian and buying on dips last week.
"EURUSD continues to trade well above its last year's low. It seems that market sentiment has turned decisively USD-negative on the back of recent economic underperformance and political brinkmanship with regard to the U.S. fiscal issues," said Citi in a note.
The dollar traded as low as 0.8034 francs on EBS, against 0.8129 late on Friday. It then rebounded back to flat for the day at 0.8134 as some dealers covered their short positions. (Additional reporting by Kevin Plumberg and Masayuki Kitano; Editing by John Stonestreet)