Spanish borrowing costs soared following a €2.5bn auction on Wednesday, which failed to meet its target.
Spain has announced plans to cut its budget by €27bn in 2012 as part of one of the toughest austerity drives in history.
The past three years have been a tumultuous time for the financials sector, which has seen a phase of deleveraging, rights issues and balance sheet repair which continues to this day.
Investors who took advantage of a €7.5bn rights offering by troubled Italian bank UniCredit are reaping the benefits as the company has delivered the largest equity return of any stock in the Euro Stoxx 50 index since 10 January.