Crunch Time As Focus Shifts To Spanish Banks
Madrid will this week replace Athens as the focus of European efforts to save the euro after Spain bungled attempts to bail out its fourth-largest bank.
Until recently, uncertainty over the Greek elections had held the attentions of Europe's politicians - but now the future of the single currency could rest on Spain deciding how to rescue Bankia from a 23.5bn-euro hole in its accounts and whether more banks need assistance.
Bankia's troubles stem from toxic property assets left to it following the collapse of the country's housing market.
Sky News visited one town where Bankia, among other lenders, has been lumbered with property it has been unable to sell.
Valdeluz was built towards the end of Spain's frenzied property boom - and while the satellite town is linked to Madrid by the high speed rail network, its gleaming station is quiet.
When the property bubble burst in 2008 many developers in the area went bust leaving their lenders in possession of thousands of over-valued homes. There are currently fewer than 2,000 residents living in a town with over 9,000 properties.
Banners offer properties for sale at cut prices, despite the fact the Valdeluz is only a quarter built based on the original plans.
Miguel Angel San Miguel, the town's only taxi driver, told Sky News: "In 2008 they just stopped building. The planned shopping mall called 'The Towers' is just a pile of bricks. The local school is a building site."
Cafe-owner Dennis Krigt said: ""There was over development across Spain and this is just one example of it. It is very quiet but now prices are down more people are coming."
In contrast to the quiet of Valdeluz, Bankia's headquarters in Madrid have become the focus of noisy protest. This weekend, around 200 demonstrators expressed their opposition to the government's plans to use public funds for a bailout.
Bashing spoons against pots, protesters chanted: "This is not a crisis, it's a fraud."
Psychologist Alejadra Hoenicka said: "It's not fair to ask for our money. Why should I pay for their mistakes?"
Her friend, Rouo Fernandez, added: "When Lehman Brothers collapsed, what happened? We're all still here aren't we? We should let Bankia fall."
Those with fixed-term deposit accounts in the bank fear that they are unable to access their money which they now want to pull out of the bank.
Raquel Millan Afeclada told Sky News: "My mother has 35,000 euro in Bankia and they have kidnapped her money."
According to a poll published this weekend, 95% of Spaniards are in favour of investigating Bankia's finances.
An independent audit of all of Spain's banks is due to report this month on whether other lenders require significant financial injections.
The Spanish banking system may need around 100 billion euros to prop it up according to the EU.
Investors fear that the Spanish government will be unable to afford to rescue its banks, forcing the country to apply for help from the European Bailout fund and the IMF.