On Thursday, pressure by the European Central Bank increased as it asked for a joint guarantee on bank deposits across the euro zone, citing a need for Europe to utilize new tools to combat bank runs as the region’s debt crisis have investors running from increased risks.

Olli Rehn, the European Commission’s top economic official, warned that the Euro zone could fall apart without greater crisis-fighting mechanisms and strong fiscal discipline, reported Reuters.

ECB President Mario Draghi asked Europe’s leaders to explain their single currency vision quickly, warning the European Parliament that it will not take over this policy.

Draghi said, “We will avoid bank runs from solvent banks. Depositors’ money will be protected if we build this European guaranteed deposit fund. This will assure that depositors will be protected.” He has asked for a EU-wide banking supervision and resolution system, reported Reuters.

The concerns came as the euro hit a two-year low against the dollar and investors ran to safe assets including Austrian and French bonds; their 10-year yields hit a new low in the euro-era.

For Spaniards, they have been worried about the state of their banks and in March, moved money abroad at a faster clip than records have shown since their 1990 records began, according to official figures.

The 66.2 billion euros ($82.0 billion) net capital move happened before Spain’s fourth biggest lender, Bankia, had been nationalized this month after massive losses due to its property bubble bust.

What is the likelihood of a Spanish bailout? 

On Thursday, the International Monetary Fund head met with Spain’s deputy prime minister but denied that it was reviewing Spanish bailout contingency plans.

IMF Managing Director Christine Lagarde said in a statement after the conversation, via Reuters, “There is no such plan. We have not received any request to that effect and we are not doing any work in relation to any financial support.”

But the market has shown different expectations. Spanish 10-year bond yields have traded at 6.66 percent, a number close to euro era highs.

Viola Julien, fixed income analyst at Helaba Landesbank Hesse-Thueringen said of the numbers, “The levels are definitely worrying. Spain is reaching zones where it is harder and harder to finance itself in the capital market.”

Other EU Countries Facing Problems

In light of the uncertainty with Spain, the euro zone’s fourth biggest economy, additional member states are having difficulty surpassing their debt problems, even with austerity programs and structural changes.

In Italy, Italian Prime Minister Mario Monti said his country was threatened by “huge possibilities” of contagion, and the pressure from increasing sovereign bond yields making reforms more difficult.

He said, “It is obviously a difficult place to be in, when you have a country displaying massive and concentrated efforts of consolidation and structural reforms, which are obviously politically and socially costly, and sees its position threatened by huge possibilities of contagion.”

He also warned about backlash should investors ask for greater deeper fiscal cuts and budget discipline in addition to what has already taken place.

Over in Ireland, voters are ready to pass a European budget discipline treaty in a referendum key to gaining EU aid. Greece’s future is a different story as it awaits the outcome of its second general election on June 17. This is vital for the country’s future in the euro zone.

On Friday, surveys showed that Greece’s pro-bailout New Democracy party has a lead of more than two points over the SYRIZA leftists.

Is Change Coming?

For now, Germany’s actions may be one catalyst to change. It has not been keen to risk more of its taxpayers’ money to support its euro zone partners and has rejected a joint deposit guarantee.

But with the dramatic rhetoric by EU and ECB officials, it increases pressure on Germany to stop its opposition to serious rescue measures before a June 28-29 summit that could may be a turning point for the euro zone crisis.

In another show of pre-summit strain, France’s new Socialist government will not back Germany’s candidate for the chairman of euro zone finance ministers role with its differences over joint euro zone bonds and bank recapitalization.

But what can be done now? Banks at this point cannot issue debt or equity to raise money.

For the short-term, one step would be to instill confidence for the region’s banks. This could come from ensuring they have sufficient capital to deal with a crisis, suggested The Economist as it’s less expensive to recapitalize banks, than support all deposits.

But this has been a challenge for Europe. In the last two years, it has attempted to reassure the soundness of banks to depositors and investors through “stress tests.” After each set of tests, it disclosed large capital holes for some banks (see Bankia). As national regulators have lost confidence from the markets, outsiders have entered to determine the amount of capital needed by banks.

And this is the next big issue for Spain and Italy–raising capital– as they battle to assure the market place their public debt is viable.

The clocking is ticking for this region but with so many factors affecting decisions, a wait-and-see approach may be necessary.