The worsening euro zone debt crisis threatens to sink the share flotations of two Spanish savings banks needing to raise billions of euros, analysts said on Tuesday.

Both Bankia and Banca Civica are offering steeply discounted prices to investors, under pressure to get the deals done because they are seen as a key test of whether Spain is managing to strengthen its banks which were laid low by reckless lending during the country’s property boom.

Bankia and Banca Civica are in the middle of book building to try to raise a combined 5.5 billion euros ($7.8 billion) in public share offerings, but the environment has turned ugly as European leaders fail to take definitive action on Greece’s debt crisis, threatening market contagion amongst debtor nations.

Also hanging over the IPOs is uncertainty over which Spanish banks could fail to pass the Europe-wide banking industry’s capital adequacy stress tests in results due this Friday.

“You have to also take into account that some Spanish banks are also expected to fail the stress tests,” said Javier Barrio, an analyst at BPI in Madrid.

Spain’s sovereign debt risk premium soared on Tuesday and the share prices of the country’s listed banks .IBAN.BC dropped by as much as 4 percent in morning trade, outpacing a 3.6 percent fall in the Stoxx 600 Europe banking sector index.

“At this point I do not rule out that one of the (IPO) processes will derail … If Bankia manages to get to market but Banca Civica does not, that is not a big deal, but if the opposite happens, that will be very dramatic,” said Enrique Quemada, chief executive of business consultancy OnetoOne Capital Partners.

With its damaged savings banks considered a vulnerable point as investors calculate sovereign risks in Spain, the government has demanded a massive recapitalization in the sector.

Some banks will tap a government fund to lift their capital, while a few have decided to seek private investment.

When a decade long property bubble burst in 2007, many Spanish banks were left exposed to property developers and have taken onto their books a lot of undeveloped lots that are now difficult to sell.

Bankia, which groups seven former savings banks to form Spain’s third biggest bank, hopes to raise up to 4.6 billion euros in its IPO, placing up to 60 percent of the new shares with retail investors around the country.