"You can try to ring fence Spain. You can provide financing to Ireland, Portugal and Greece for three years and try to leave them out of the market and maybe restructure their debt down the line. But if Spain falls off the cliff, there is not enough official money in this envelope of European resources to bail out Spain.
Spain is too big to fail, on one side, and too big to be bailed out. In Spain, there’s a trillion Euro in public debt. On top of that public debt, you have almost a trillion of the foreign liabilities of the private sector — houses, financial institutions, corporates — Spain was running a current account deficit to finance the excessive spending of the private sector. So it’s not just public debt but private debt that has to be rolled over."