The bank asked the government for the not inconsiderable sum of €19 billion ($23.5 billion) last week. The state has already pumped some €20 billion into a banking system crippled by bad debt -- much of it property-related.
Getting the Spanish banking system out of intensive care threatens to become a vicious circle. To provide further help, the government will have to issue yet more bonds - worsening its own finances. The yield on Spain's sovereign 10-year bond has risen to nearly 7%, widely regarded by international markets as unsustainable.
Portugal, Greece and Ireland had to seek international bailouts when their borrowing costs reached such levels.
For the eurozone countries, the situation in Spain is far more daunting than that in Greece. According to some analysts, while it may be deemed "too big to fail" it may also be "too big to rescue" with the resources available
According to the International Monetary Fund, Greece's GDP is $271 billion; Spain's $1,397 billion.
Professor Peter Morici, of the Robert H. Smith School of Business at the University of Maryland, says "Spain could prove beyond Germany and other northern countries' capacity to rescue, and its collapse would spell the end for the euro."
If Greece was living beyond its means, Spain's problem stems from a property boom that followed its entry to the EU. Northern Europeans escaping to the Mediterranean beaches fed an orgy of hotel and apartment building. Many of those developments are unfinished skeletons or on sale at foreclosure prices. The banks are loaded up with the consequences of that boom and bust.