BBVA, the second-largest bank in Spain, was out yesterday with a regulatory filingto put a chill down your spine:

The connection between EU sovereign concerns and concerns for the health of the European financial system has intensified, and financial tensions in Europe have reached levels, in many respects, higher than those present after the collapse of Lehman Brothers in October 2008.

The filing was picked up by the Spanish press yesterday but went largely unnoticed elsewhere.

Financial tensions in Europe continue at levels higher than after the fall of Lehman Brothers in 2008. This, together with the effect of fiscal adjustment in peripheral countries, imply a downward revision of growth projections for Europe, which are -0.5% for 2012, with a slow rebound in 2013. Nonetheless, it is important to note that these projections depend on a fast resolution of the crisis and a notable reduction of financial stress, to avoid a sharper effect on growth.

Note that the ECB real GDP forecast for 2012 is -0.1%. There is also this pleasant kicker:

Current economic conditions may make it more difficult for us to continue funding our business on favorable terms or at all.

Spain is in a full-on credit crunch. It will ravage growth and may spread to other parts of the continent. Forget Greece, watch Spain.