Spain is nearing financial collapse. Record amounts of money have been withdrawn from banks that already are wobbly at best.  Their ill-advised scheme to roll up several small insolvent banks into one big insolvent bank, Bankia, was a failure and merely a desperate attempt to buy time.

Nomura says "Spain will need full-blown bailout which will include more active role of ECB in Spanish bond markets" and that using treasury debt to save Bankia pushes Spain towards needing a sovereign bailout.

Spain is much bigger than Greece. A comment on Zero Hedge sums it up

Spain has to get 'fully bailed out' by WHO? Are we STILL pretending someone is standing by with a bunch of free cash to throw around?