At the end of last year, Ireland required a Greek-style bailout from the EU/IMF that could end up being as much as $100 billion, and accordingly, banks like Allied Irish Banks (NYSE: AIB) and the Bank of Ireland (NYSE: IRE) plummeted into despair. The tangential repercussions of this bailout is that now both Portugal and Spain are under the microscope, as investors and bondholders are getting more and more nervous about another massive bailout.

Portugal, which is part of the EU, but whose economy is relatively small, is not as big of a concern as Spain, which is one of the largest economies in the EU and is the 14th largest in the world. So, what exactly is Spain doing to quell the nerves of investors and bring down their borrowing costs?

The immediate plan
Spain recently announced that it would be pouring billions of dollars into its troubled savings, or cajas, banks, and would force them to be more transparent about their lending practices. In the next few days, the country is going to issue $4 billion in debt and plans to possibly raise as much as $40.4 billion.

In addition, Spain plans on simplifying the structure of the cajas to boost investor confidence. Oftentimes, these banks have very complex ownership structures, and they disclose much less information than a traditional bank. The goal is to make them more traditional, and hopefully more simple, which could ultimately attract more investors. Already last year, Spain forced a consolidation in the industry, taking the number of cajas down from 45 to 17, a pretty massive amount of mergers for a single year. This is extremely important as the cajas currently account for 42% of total bank assets in Spain, mostly because of lax lending practices that helped initiate a decade-long housing boom that is now lying in the ashes.

What's next for investors?
These moves reflect the fact that last year's small band-aids didn't quite do the trick, and that Spain, a nation with 20% unemployment and soaring national debt, will have to move quickly and more efficiently to calm the markets.

Already, some of the announcements seem to be working. Banco Santander (NYSE: STD) and BBVA (NYSE: BBVA) have both seen upticks in their share prices of more than 9% since 2011 began. Even the National bank of Greece (NYSE: NBG), Barclays (NYSE: BCS), and Deutsche Bank (NYSE: DB) have seen double-digit growth in 2011. Clearly, what happens in Spain is not isolated to just Spain; it reverberates across the EU and even into the U.K., where much is at risk as well (U.K. taxpayers could pay more than as $7 billion for the Irish bailout).

Is now a time to jump into some of these banks, especially ones like Banco Santander that are well-capitalized and don't have the troubles that the smaller cajas have? Sound off in the comments below, or add these companies to MyWatchlist to get the latest news and analysis.