Spain: Resisting a bailout
They are playing defence in Madrid. And the moves are familiar. They have been played before in Ireland, Portugal and Greece.
The denials become ever more insistent that a bail-out is not needed. "The men in black will not be coming to Spain," said a senior minister yesterday.
Yet the cracks are showing.
There was the admission by Spain's budget minister that the country has all but been shut out of the credit markets, making it difficult to finance its needs.
The Spanish Prime Minister Mariano Rajoy has openly appealed to Europe to "support those that are in difficulty". That sounded like a prime minister running out of options.
Then there are the whispers - denied - that Germany is urging Spain to accept a rescue just for its banks. When Angela Merkel's spokesman was asked about it he did not exactly close the rumour down.
He said of Spain that "everyone knows that Europe is ready (to help)... but the decision lies with the Spanish government alone".
Some in Europe would like the government in Madrid to apply to the main bailout fund, the EFSF, to rescue its banks. Their motive is that a bank bailout might prevent a full Spanish rescue - a much more problematical operation that would risk spreading instability to Italy.
Spain is facing a black hole in its banks, caused by the property crash. It does not know what bad loans are hidden there.
Some suggest it could be as much as 180bn euros. Government officials I have spoken to suggest the figure is much less. About 60bn euros. The head of Banco Santander says the troubled banks would need 40bn euros.
Spain is in a bind. It is struggling to reduce its budget deficit whilst in recession and facing unemployment of 24%. Targets have already been missed.
It has 44bn euros in reserve and can meet its obligations for months.
Furthermore the country has already financed the majority of the funding it needs this year. Only another 82bn has to be raised.
None of that deters investors from concluding Spain cannot service its debts, support its banks and its impoverished regions.
What Madrid would like is for its banks to borrow directly from the rescue fund - the EFSF. That would enable the government to deny it was seeking a bailout.
The political fall-out would be much less. The conditions would be easier. That, however, cannot be done under existing rules. Only governments can borrow from the fund. The Germans believe that ensures that governments are held accountable for using the loans and for abiding by strict conditions.
Spain is lobbying hard for its banks to be able to access the fund directly. "What's at stake," said one minister, "is the European project of the euro," a familiar refrain when countries or officials need help.
Spain has joined the chorus calling for a banking union. It is but the latest of many plans to save the eurozone. They are usually launched in the weeks before a summit and their importance often diminishes later.
But a banking union is the idea of the moment. There would be monitoring of banks at an EU level. Deposits would be guaranteed on a pan-European basis and there would be a fund to wind down big banks. One of the major attractions is that a eurozone banking union would avoid investor flight or bank runs in one country.
The EU Commission will launch the first step towards a banking union later today when it proposes new powers for dealing with failing banks. What the Commission wants to do is to break the link between bailing out banks and governments. (Ireland transferred the debts of its banks on to the public books and pushed the country towards bankruptcy.)
The French, the Italians and the Spanish are already backers of a banking union. They believe that if the eurozone takes responsibility as a whole for propping up failing banks it will go along way to ending the banking crisis.
Germany is cautious, however. Angela Merkel - earlier this week - accepted the idea of much greater European supervision of cross-border banks. But Germany will not currently accept guaranteeing deposits or a new fund to wind up failing banks. German voters are likely to resist using their money to bail out foreign banks. It is a familiar story; eurozone governments backing a plan that depends on German taxpayers footing the bill.
A banking union will be on the agenda at a summit later this month, but even if all the obstacles were overcome it is unlikely to be in place to help Spain.
By saying that it is essentially shut out of the credit markets, Spain hopes to put pressure on the ECB - which meets later today - to resume its bond-buying programme.
That would help reduce borrowing costs. What Spain really wants is for the eurozone to agree to banks being able to borrow directly from EU funds.
There may be a halfway house. A German paper says that European officials are examining offering Spain a precautionary credit line from the EFSF to help it raise funds. That would buy Spain time whilst being able to claim it had not sought a bailout.