I think it's just domestic german political talk since it's pretty absurd on its face. A more constructive approach would be maybe to use a common euro bond mechanism and stricter oversight controls on which/how much each member state can issue debt...which I think will be the eventual solution to all this, Europe just needs to integrate its fiscal as it has already its monetary mechanisms.
Spain is being tarred and feathered inappropriately I think...here's the stats:
"Spain’s central government trimmed the deficit by 42 percent in the first nine months, compared with 31 percent in Greece and a widening budget gap in Portugal. Ireland’s overall deficit is expected to swell to 32 percent of gross domestic product this year, including the cost of rescuing its financial system."
Spain doesnt have the same problem as Ireland. Spanish debt to GDP is 63%, it's deficit is coming down to 6.9% this next year and 3% the year after. It's had a history of running budget surplusses in the good times and has always been solid in honoring its debts...It's on par with France and better than US at this point.
Spanish banks have been heavily regulated, Spain has some of the best bank regulators in the world imo (one reason why Santander sailed thru the crisis with no toxic debt exposure). We saw this recently with that one-time accounting rule change to force banks to provision faster on real estate holdings, Santander was able to do this entirely from profits and without having to take funds from the general provisions reserves. It's 3rd Q profits fell slightly, but impressive that it was able to handle this one-time accounting change so easily, profits continue to be 2B euros each quarter from very diversified income stream, fast growth in Latin America and UK offsetting slow growth in Spain and Europe.