Rajoy said this week the country may not need a second bailout because the ECB's pledge already cut borrowing costs. Spain is trying to avoid surrendering more control over the economy after handing power over the financial system to the EU in return for a 100 billion-euro ($129 billion) bank rescue in June. German policy makers have said they would force Spain to accept conditions in exchange for support.

“It is impossible for Spain to ask for a full-fledged program,” Soros said, adding that he saw a bailout of as much as 100 billion euros. That might be provided in a precautionary credit line.

Rajoy is also handicapped by domestic politics, Soros said, citing the “big tension between central governments and the regions, particularly Catalonia. So there is a real threat of Catalonian secession that has now emerged.”

Eoin Treacy's view The ECB has so far succeeded in talking down short-dated Spanish government bond yields but talking will only work for so long. The fact that Spain remains mired in fiscal difficulties, which are beyond its ability to cope with in the absence of some form of assistance, virtually ensures that it will need to tap additional credit lines at some point. Perhaps most importantly, Spain will need to follow through on its commitments to reform in order to continue to avail of a 2-year cost of capital in the region of 3%. For this reason the Spanish 2-year bond yield remains a barometer for confidence in the Eurozone.

The compression of the Eurozone's version of the Ted spread (3-month Euro LIBOR – 3-month Euro bills) is perhaps the most acute representation of the ECB's actions to support the financial sector. At 13 basis points, the spread is at is tightest level since 2007 and reflects significant support for the banking sector as limitless funds are made available at the discount window, while collateral rules have been relaxed.

The DJ Euro Stoxx Banks Index has become somewhat overbought following its impressive rally from late July and potential for some consolidation of those gains has increased. However, a sustained move below 100 would be required to question medium-term scope for additional upside.