Spain nationalized its largest real estate lender Wednesday night and plans to announce an overhaul of the country's entire banking system Friday.
The country is scrambling to prevent its troubled banks — weighed down by property debts — from sabotaging the whole economy. The Spanish government has only to look northward to Ireland to see what could happen if it fails.
German Chancellor Angela Merkel made all the right gestures Monday: the obligatory phone call congratulating French President-elect Francois Hollande. She vowed that the two will "work together well and intensively." And she invited Hollande to Berlin after his inauguration and said she would welcome him "with open arms."
But clearly the French election results mark a setback for Merkel and her goal of solving Europe's economic crisis with financial austerity.