Keep in mind that Greece or even Portugal or Ireland are small problems, relatively speaking. There is simply not enough money out there to bail out Spain if the situation deteriorates.
Spain has horrendously high unemployment (almost 23%, youth unemployment over 50%) and with budget cuts, the problem will struggle to improve any time soon. There won't be any good answers if (or when) Spain needs to be propped up. What's consistently missing from these discussions is why the general population has to pay the price for bad public policy so that bankers can live the good life? People are upset for good reason. CNBC:
Contagion risk in Europe is back on the agenda, not even a month after a debt swap that saw Greece sheltered from a messy default after a second liquidity-boosting operation from the European Central Bank.
Among the euro zone periphery countries, Spain is creeping up again as the big, sick member of the area and a recent rise in Spanish bond yields is a sign that its illness is unlikely to be cured soon, analysts told CNBC.com on Thursday.
Italian 10-year bond yields rose 7.9 basis points on the day on Thursday, to 5.08 percent but they were overtaken by Spanish 10-year bond yields, which were 5.49 percent, up 7.2 basis points on the day according to Reuters data.