In so doing, the Spanish rescue may well suffer from the same fate as the three previous sovereign rescues. Because the bailout money takes on the position of preferred creditor, it subordinates other bondholders, thereby making it even harder to raise money from the capital markets.
Also stressed to virtual breaking point, Italy, becomes liable for some 17.9pc of the cross guarantees, raising the absurd spectacle of Italy borrowing at 5pc to lend to the Spanish banking system at 3pc. European solidarity may be a noble cause, but there must be limits.
The customised nature of the Spanish rescue will also raise accusations of favouritism from those struggling with the harsh conditionality of previous rescues. Ireland, with a remarkably similar crisis to that of Spain, will feel particularly aggrieved.
Like Spain, Ireland's problem was essentially that of overexpansion of its banking sector to fund unsustainable construction, property and consumer booms. The consequent losses have overwhelmed the capacity of the sovereign to cope, transmogrifying the original banking crisis into a full blown fiscal meltdown.
Yet Ireland has been treated as a fiscal profligate, and been punished accordingly with penalty terms which Spain seems to be escaping. We should perhaps not feel too sorry for the poor downtrodden Irish. This was a mess largely of their own making, for right at the start of the crisis, the government committed the blunder of unilaterally issuing a blanket sovereign guarantee to all bank creditors in an ultimately doomed attempt to halt the flight of capital. Ireland essentially did for its entire banking system what Britain attempted, again without success, in the single instance of Northern Rock.
As fast became apparent, Ireland could not afford this guarantee, forcing the government to fall back on joint eurozone/IMF support. Ireland's unilateral state guarantee also caused mayhem in the European banking system, making other European countries particularly unreceptive to subsequent calls for concessions.
Some progress is being made towards a fully fledged federal banking system, with centralised supervision, a single deposit insurance scheme, and a single resolution regime. Potentially, such a banking union could have prevented the sort of crisis we've seen develop in Ireland and Spain.
European-wide deposit insurance might, for instance, have given depositors the reassurance needed to leave their capital where it is and quell the cross border flight of capital to apparently safer havens. Similarly, now widely accepted proposals for bailing in bank creditors – subordinated and senior unsecured debt holders – promise finally to break the link between banking and sovereign risk, allowing banks to go through a kind of Chapter 11 bankruptcy process without blowing up the entire economy. For Europe, however, implementation of these proposals is still years away, and in any case come too late to deal with the crisis in hand.
In the meantime, self defeating austerity is throwing stressed economies ever deeper into recession with little hope, outside the implausible promises of policymakers, of any near term return to growth.
It was unwise of George Osborne, the Chancellor, to blame the eurozone for Britain's economic ills. There are no excuses for the country's lamentable economic performance. But it is certainly true that the longer the eurozone crisis persists, the worse our chances of economic recovery become. The effects of the crisis are already apparent in plunging business confidence and rising bank funding costs.
The Spanish omelette of a rescue agreed at the weekend brings us no closer meaningful resolution.