Pimco CEO Mohammed El-Erian says that being unable to exit the emergency European funding Spain has finally requested could turn the country into a "roach motel."

"Having botched prior attempts to stabilize its banking system – whether it was the domestic approach based on mergers or the attempt to access a back door to the European Central Bank – Spain now looks set to tap European funds," El-Erian writes in the Financial Times.

So far, emergency European funding has been impossible to exit, like a “roach motel,” El-Erian notes.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

"Rather than act as a catalyst for crowding in private capital needed to restore growth, and financial viability, public money has provided the private sector with the possibility to exit program countries at a much lower cost; and exit it did," he says.

As a result, notes El-Erian, governments have become highly dependent on official aid to cover their budget needs, meet interest obligations and roll over maturing debt; and domestic companies have been starved of the oxygen that is so critical for investment and job creation.

“No wonder, growth and solvency remain so elusive for the program countries, including in Ireland and Portugal where citizens have been generally supportive of their governments’ policies,” he says. “The possibility that the counter factual—i.e., no access to external emergency financing—could have yielded a worse outcome is no excuse for repeating the mistake in Spain.”

Bloomberg Business Week reports that Spain began moves to tighten takeover laws that could protect its biggest energy companies Repsol SA and Iberdrola SA from hostile bids.

The Spanish government is erecting barriers around companies after the benchmark Ibex 35 index slumped 29 percent in the first five months, its worst start to a year since at least 1987, as investors dumped Spanish assets amid concerns the government will need a bailout.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown