FORTUNE — A disastrous share offering in Madrid earlier this week portends continued economic trouble for Spain and, quite possibly, for the European Union. Shares of Bankia, the nationalized Spanish lender, fell by as much as 21% Tuesday as the bank issued 11.5 billion new shares in a bid to boost the bank’s depleted capital base. The drop added to losses sustained last week when institutional investors sent Bankia’s share price down by a whopping 50%. Overall, the bank’s shares have lost 80% of their value since it was formed in 2011.

The Bankia share sale wasn’t supposed to go so terribly wrong — indeed, the government, which ordered the move, thought it would evoke confidence in the badly-damaged Spanish banking system. Instead, the Bankia bungle has raised new questions on Wall Street as to the true state of the Spanish banking system, as well as Spain’s overall economic trajectory.  Read more