The rally that wasn't continues, and it continues with breathtaking power. I am talking about the rally in European stocks, a rally signaling that the ECB solution -- temporary or otherwise -- to come to grips with the near collapse of many countries and most banks in the eurozone.

With the increase of 22% in the German Bourse, you have to admit they are having a flat-out bull market. Germany is red hot, and you've got an out-of-bonds-into-st​ocks virtuous thing going on over there that's pretty spectacular.

France continues to rally with tremendous conviction and is now up about the same amount as our S&P 500 -- not bad, given that many analysts had bet that one, if not all three, major French banks would have a Lehman-like event.

But here's one not to be believed: Italy is up 7%. Isn't Italy bankrupt? Shouldn't we be shorting the heck out of everything Italy? Isn't it Greece?

Not if your stock market is up 7%. There you have the oddity of money going into both bonds and stocks, although I'm sure most people think that the Italian bond market, the third-largest in the world, is one big phony.

I'm no longer sure.

Finally there's a market that, while not in the black, continues to run wild with a virtual Pamplona stampede: Spain.

Spain is down 7% for the year, but you have had monster gains in individual stocks, and that's what I want to focus on for one moment.

I have shouted to the rooftops that the key to this crisis is Banco Santander. Why? Because it is big enough, especially relative to its mother country, and leveraged enough, especially considering the United States in 2008, to be Lehman Bros. It can't be allowed to fail. In fact, it has to prosper, because the hope is that one bank, or maybe two with BBVA, can be used to save the Spanish banking system. Given that Santander also has a huge number of government bonds, it is the perfect microcosm for the problem.

Now, here's what's happening. SAN has had a gigantic and sustained move from $4.88 to $7.50.That's a sign that the bank is coming back to life, courtesy of IPOs from some of its worldwide empire -- only 20% of its business is Spain -- but also because of the ECB's bond-buying program.

Santander has already issued debt to help its balance sheet at very successful prices. But you have to understand that it will be able to raise a huge amount of equity if it wants to in a deal that everyone will want to play in if we know that deposits in SAN are going to be guaranteed in euros.

Wait, Jim, wouldn't that mean that every bank would have to issue the same guarantee, putting the government on the hook for all of it?

No, not if you forced all the other banks into mergers with SAN and BBVA. Hey, why not just have two banks in Spain. Britain and France don't have all of that many.

I know, farfetched. But I am using it only as an example, an example of what can happen when equity markets go up. You can issue equity, and people actually want it!

That's about where we are.

That's what's about to happen.

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.

More from TheStreet.com

• Cramer: Loosen lending, and jobs will follow
• Amazon vs. Apple: Bezos just squashed Cook
• 5 stocks to store away for 5 years