The Farther You Go, The Farther You Have To Go

If you're Germany, the time to have bailed out of this Euro catastrophe was long, long ago. And it's not like you couldn't have seen it, had you focused on earning rather than having, on paying off loans rather than racking them up.

Spain is in trouble. Big trouble. Again.

MADRID—Spain's Budget Minister Cristobal Montoro on Tuesday urged euro-zone partners to act faster to help support its enfeebled banks, saying that the government has effectively lost access to capital markets because of steep risk premiums demanded by sovereign bond investors.

In making this dramatic admission, Mr. Montoro joined recent calls by the Spanish government for direct aid from European Union institutions for Spanish banks as the government hopes to avoid a full-blown bailout package. The matter has gained urgency after Madrid was forced into a €19 billion ($23.75 billion) rescue of lender Bankia SA, while the government's borrowing costs have surged to record highs with yields on Spanish 10-year bonds hovering above the 6% mark.

"Lost access to capital markets" is econospeak for "No one will lend us any more money." That's bad because Spain has monstrous debts that it can't service without more borrowing. Sovereign bond investors have lost faith in Spain's ability to produce, to earn, to create*. Anyone who lends money to the Spaniards now is a rube.

Speaking of rubes, if I was a betting man, I'd guess that the European Central Bank is going to step in and print, print, print more Euros and bail out Spain. Now that they've gone this far, what else is there to do? Admit that socialism is a failure? Hardly.

Over in Germany, Angela Merkel is buckling. She's gone from flatly refusing to participate in Eurobonds, where all debt will be shared, to putting conditions on them. Bad move, Angela.

A subtle suggestion for the Germans.

* - No one's lost faith in their ability to demand, consume, devour.