Op-ed: Spain shows clinical symptoms of impossible bailout

The Spanish economy is getting dangerously close to the edge, and yesterday it displayed clinical symptoms worthy of reviving fears of a bailout.

Besides paying 54% more to finance ourselves compared to 2010, yesterday the yield on our 10-year bonds settled at 6.28% and the cost of insuring Italian and Spanish bonds against default via credit default swaps, or CDS, reached a record 420 points. The Ibex lost support at 9,200 points and hit annual lows. And during the morning, the Spanish risk premium passed 400 basis points and reached its historic max before settling to 386.

The three euro economies that have received aid packages (Greece, Irleand and Portugal) have fallen into the supposedly secure arms of the EU exactly when their risk premiums are surpassing 400 basis points and other risk measurements are high. That considered, it's important that they ask themselves why Spain doesn't follow in their steps. Or Italy, another country that is mired in the markets right now.

Certainly neither Spain, Greece nor Italy is the same as Ireland or Portugal. And the Eurogroup will never be the same as the day it first enacted the bailouts, so its behavior is more dubious than ever. The complexity of the Italian and Spanish economies (the third and fourth biggest in the EU, respectively) is such that Europe doesn't have the ability to abandon their recovery, politically or economically.

Politically they cannot, which is obvious from three months of unproductive negotiations that demonstrate that European decision-makers are awkward, slow, ineffective and scared of uncovering their weaknesses.

Paying for Spain's recovery is also economically untenable, because their economy is valued at some 600 billion euros, a figure that is much greater than the 440 billion endowed to the Temporary European Rescue Fund, of which only 230 billion would remain for Spain.