LONDON — As Spain’s economic crisis deepens and uncertainty swirls over Greece’s future in the eurozone, the guardians of the increasingly fragile European monetary union are near a moment of truth: Can they muster the will and resources to keep the eurozone from breaking apart?
The question has grown more urgent since the release of data Friday showing a record-high rate of unemployment in the eurozone, poor job creation in the United States, and a manufacturing slowdown in China. Combined, those signals have fueled fears of a second global recession.
On consecutive days last week, two of the most powerful figures in Europe — Mario Draghi, president of the European Central Bank, and Olli Rehn, the most senior economic official in Brussels — warned that the future of the eurozone was in doubt. In the words of Rehn, the union might well disintegrate unless policy makers take steps to bind the euro’s 17 nations closer together.
Coming as they did from two men at the very soul of the European project, the reprimands were a stark reminder of just how much the Spanish financial meltdown had shaken the confidence of the European brain trust, to say nothing of investors from New York to Beijing.
Over the weekend, leaders of two of the euro’s most vulnerable countries urged more unification. Mario Monti of Italy called for using euro bonds to create a quicker path to common debt for Europe. And Mariano Rajoy of Spain floated the idea of a common fiscal authority in Europe to synchronize budgets and manage debts.
But as global economic gloom deepens, there is a risk that such lofty talk could be too little, too late for investors, especially with Spain seeming on the brink of a banking collapse.
Sitting as Spain does on an estimated $273 billion in failed real estate loans alone — a number that surpasses the entire output of the Greek economy — there is little doubt that Spain, with the fourth-largest eurozone economy — behind Germany, France, and Italy — is too big to fail. Or, more precisely, to be allowed to fail.
Indeed, many investors and money managers now see Europe’s challenge as not how to bail out sickly Spanish banks, but how to keep Spain and even Italy afloat and in the eurozone as money keeps leaving these countries, forcing interest rates up and leaving local banks as the only buyers of government debt.
‘‘The eurozone is disintegrating and this has started to feed into institutional capital flight out of the eurozone,’’ said Jens Nordvig, a senior bond and currency specialist at Nomura in New York. ‘‘The crisis has reached a new level. Policymakers are realizing that there are only two options: Further integration or a breakup.’’
Arriving at an action plan and amassing the cash to back it up will be no easy matter, though. Analysts guess that a comprehensive rescue for Spain would cost 350 billion euros, and one for Italy would cost even more. Sums that large would quickly overwhelm the 500 billion euros available in the new European rescue fund, the European Stability Mechanism.