...But what outside analysts often ignore is that this bleak scenario hides some impressive successes. Spain entered the crisis with one of the lowest public debt figures in the eurozone and still has a smaller debt/GDP ratio than Germany despite its rapid rise.
Spain's conservative, diversified commercial banks have not yet needed a major bailout, and they have spent four years provisioning against the eventual collapse of real estate prices. The chronic current-account deficit has fallen by half, and export growth is strong. Unit labor costs have declined steadily for two years.
Spain last year handed a huge electoral win to a government that promised only austerity and unpopular reforms, hence voting for austerity rather than against it. In February, the government unveiled a reform of the rigid labor market which was the most radical in postwar Europe, and the only public response was a call for a general strike that met with a tepid response. Spain's indignados, who were actually the precursors of the Occupy movement, have continued a peaceful and dwindling protest over the crisis, without concrete proposals.
There is still no violence in the streets, no calls to leave the euro or repudiate the debt, no government defiance of eurozone demands. It would be difficult to find a more model patient for the bitter medicine being administered by eurozone leaders.
So why are markets continuing to drive up Spain´s risk premium? Foreign analysts appear to toss Spain into the Greece "bag" for two reasons: either they overlook...