The world is gnashing its teeth over the notion that Greece could exit the eurozone, dubbed by markets as a "Grexit."

Market observers should fret more over a "Spexit," one analyst says, as a Spanish withdrawal from the eurozone is more likely as the country is too big to bail out.

"The Spanish are a lot more likely to pull out of the euro than the Greeks, or indeed any of the peripheral countries," says Matthew Lynn of Strategy Economics on Wednesday, according to CNBC.

"They are too big to rescue, they have no political hang-ups about rupturing their relations with the European Union, they are already fed up with austerity, and there is a bigger Spanish-speaking world for them to grow into."

Greece received over $170 billion in bailout funding earlier this year from the European Commission, the European Central Bank and the International Monetary Fund, yet a Spanish bailout would cost a lot more due to the much larger size of the economy there.

Yields in Spanish bond auctions have soared as investors demand more in return for investing in the country, as concerns are building that an already financially strained government will undergo more duress propping up its banking sector and regional governments.

Plus the underlying economy is in shambles.

"One in four Spanish households now have no bread-winner. Retail sales are falling 10 percent year-on-year. Yet the prescription from Brussels and Berlin is precisely the same as it has been for every other country struggling with the euro. Endure a deep recession. Let unemployment rise. Allow wages to fall until you claw back competitiveness," Lynn tells CNBC, referring to unpopular austerity measures attached to bailout money financed indirectly by Germany or the Belgium-based European Commission.

Spanish financial institution Bankia has said it needs the euro equivalent of $24 billion in government assistance, prompting fears other banks will need bailing out as well, while the regional Catalonian government has said it needs help refinancing debts.

Meanwhile the economy remains mired in recession and unemployment approaching 25 percent.

"Without wishing to sound apocalyptic, it does feel as if Spain is gradually shuffling towards the abyss," says Chris Beauchamp, market analyst at IG Index, the Associated Press reports.