As Spain requests a bank bailout from Europe, Elizabeth O'Malley looks at what this will mean for Ireland, Europe, and the future of the single currencyOn Saturday, Spain’s Economy Minister, Luis de Guindos asked for a bank bailout in a teleconference with other Eurozone finance Ministers. This has come after months of denial that the country would need any loan for the banking sector by Prime Minister, Mariano Rajoy. The markets seemed to breathe a sigh of relief at the news that this problem was being dealt with. However, as the dust settles, analysts are concluding that this is far from a solution.Spain’s economy, the fourth largest in the Eurozone, initially looked strong enough to withstand the financial crisis without significant external funding. However house prices continued to fall and unemployment rose to the apocalyptic figure of 25 per cent. Any boom which had come from the housing sector dissipated, leaving debt in its wake. Spain’s borrowing costs are punishing and too expensive to finance a bank bailout. The government no longer has the money or borrowing power to prop up banks which suffered huge losses as a result of the property crash.The estimates for the bailout range from the forty billion euro predicted by the IMF, to the one hundred billion euro predicted by senior EU sources. The general feeling is that one hundred billion euro would be enough to protect the Spanish banks from further shocks. This is of course an important move given that the Greek elections on Sunday could mean the country leaving the euro.The final figure will be decided after the results of two independent audits of the country’s banking sector, due by the 21 June 2012. This will be a purely European matter as, unlike the other bailouts, the IMF will not be paying into any fund, merely holding an advisory role. It is believed that the loan will not come with any austerity conditions attached. Money will be directed at the banking system rather than the wider economy and this sector has undergone widespread reform already. However, Germany's Finance Minister Wolfgang Schauble said there would be a supervision programme.It is not yet clear whether funding will be coming from the retiring European Financial Stability Facility or the new European Stability Mechanism which begins in July. If it’s the latter this could require Ireland to partly finance Spain’s bank bailout, despite the fact that we were to pay our required amount in five equal instalments. Not only this, but ESM loans have priority over other debt which could deter people from buying Spanish sovereign bonds. It is unknown what the impact on the holders of Spanish bank bonds will be.In the immediate aftermath of the news of the bailout there was an initial surge in the Spanish and European shares on the stock markets. This eventually fizzled out as questions of whether a loan from the ESM would mean less valuable bonds. Although this positive buying was short lived, it appears the markets have been somewhat calmed by the announcement.The question remains: what does this situation mean in the wider scheme of things? Is it a turning point or simply another nail in the coffin of the single currency?There are turbulent times ahead. Italian bond yields have started to rise. Cyprus, which has been affected economically by neighbouring Greece, may soon need help, especially if Greece leaves the euro. In a worst case scenario we will see a return to the riots we have witnessed throughout the year and a run on banks. What is likely is that confidence in programme countries and the EU will sink and be reflected on the markets, making it an even tougher fight to save the euro. Comfort can be found in the fact that with so much time to prepare for the worst, many senior bankers think they would now be able to cope with any fallout if Greece were to withdraw from the single currency.Yet there are some positive things to be taken from this announcement. The absence of extra austerity may signal a change in attitude from Europe. Irish politicians could have an easier time negotiating more favourable terms in the likely event we need a second bailout. It also makes it more likely that a new Greek government could strike some sort of compromise in order to continue being part of the euro.It’s a good bargaining chip, but the fact remains that Ireland might need to pay into fund that goes towards bailing out Spain’s banks. No doubt this will provoke more anti-EU sentiment from Sinn Fein and the United Left Alliance who believe we shouldn’t have bailed out our own banks either. Staying part of the euro and the EU does indeed come with a price but it also comes with benefits. After all, just as the Spanish banks are being rescued, so too was our economy.The euro crisis will not be resolved until those belonging to the single currency decide how far they are willing to go to save it. Short term measures and renewed bailouts do nothing to solve long term problems. The Spanish bailout is symptomatic of a bigger problem and it’s time to start treating the disease.