How Spain's problems got worse in less than a week

"The European Union has a strong incentive to blame Spain, because that way it can distract attention from the fact that the overall strategy has failed," says Simon Tilford, chief economist at the CER. "There's no doubt that the Spanish government has made mistakes, but it's increasingly being put in an impossibly difficult position. ... The European Central Bank is the only institution that can dispel investor fears, and Rajoy is right to argue that going forward, you need an activist bank that backstops debts at the eurozone level ... Compare the situation with the US the collapse of AIG did not bankrupt Delaware. Whereas the collapse of the Irish Bank basically resulted in the insolvency of Ireland."