A couple days ago, Spain floated an idea to deal with their bailout of Bankia, which would have represented a back-door way for the country to print money without having control of their own currency through a central bank. It would have worked this way: Spain would agree to a debt-for-equity swap with Bankia, and then use the Spanish government debt (bonds) as collateral for cash from the European Central Bank.

The ECB would have to agree to such a scheme, of course. And there are conflicting reports about their posture. Several news outlets have reported that the ECB opposed the recapitalization scheme for Bankia. But then, the ECB said they have not given an opinion on the plan. For their part, Spain said they never formally proposed the idea. So everybody denied everything. But given the ECB’s staunch adherence to their bylaws, which disallows them financing government operations, and well as their endless concerns about credibility and precedent, it’s unlikely they would consent to the scheme.

Spain’s other option is to go to the markets to finance the Bankia bailout – they only have $9 billion in a domestic bailout fund, and rescuing Bankia could cost as much as $23 billion – but then they have to contend with the high borrowing rates that has driven the country to the brink of default. Clearly Spain’s economic situation is deteriorating, and since there is broad agreement that Spain is too big to be jettisoned from the euro, that demands action on the part of Eurozone leaders.

The release Tuesday of discouraging figures on Spain’s retail sales and exports further contributed to the sense of the country’s fragility. And the resignation of Spain’s central bank head, a month ahead of schedule, highlighted the struggle to fix long-standing problems in the country’s financial sector.

Underscoring the urgency of the situation, U.S. Treasury Undersecretary Lael Brainard arrived in Athens on Tuesday for a previously unannounced European trip that will include stops in Madrid, Frankfurt, Paris and Berlin. The purpose, according to a release, was to “meet with senior government officials in each country to discuss their plans for achieving economic stability and growth in Europe.”

There is talk of boosting the investment funds for job creation projects, but these funds are nowhere near the level needed to pull the Eurozone out of recession. Eurobonds have also returned to the head of the agenda, which would help with the near-term problem of countries like Spain being effectively locked out of financing.

But the problems in Spain suggest that Europe may not be able to wait until the outcome of the Greek elections to act.

…Another option being discussed is a banking union that would allow member countries to collectivize bailouts. Since German banks are as much at risk from sovereign debt exposure as the other countries, this may not seem as much like a fund transfer, but that’s well-hidden by the sovereign bailouts, and telling citizens that they have to rescue other countries’ banks is going to be extremely unpopular, I’d gather.