Its unemployment rate is 23%. Around half of all youths can't find work. A million or more people may lose homes, the equivalent of seven million in America. Its income inequality is the highest since the EU's Eurostat (its official statistics agency) began analyzing income distribution in 1995.
Following the fall 2007 crisis, its PSOE government clashed salaries up to 15%, attacked pensions, cut child benefits, introduced destructive labor reforms, and ended banning employing contracted temp workers indefinitely.
Expect Spain's new right-wing Popular Party (PP) to pass stiffer austerity measures. As a result, anger may explode more than already. Spain's a power keg. New Prime Minister Mariano Rajoy wants all Spaniards working together. Punished workers may take another route.
Unemployment, homelessness, strikes and mass protests are increasing. Bond investors want no part of Spanish debt. It's priced nearly 5% above equivalent German bonds. It's nearly fourfold the 2008 peak level and beyond what triggered Greece's collapse.
Moreover, in one month, Spain's 3-month sovereign yields doubled to over 5%. Its new government won't fare better than previous ones. Names and faces may change, but problems remain and grow. If Spain defaults, it's too big to save. So is Italy, and, of course, America dwarfs them all if it falls.
Everywhere, especially in troubled sovereigns, governments spend all their resources. They're borrowing all they can get internally and abroad. Push is rapidly reaching shove. A day of reckoning too onerous to manage approaches.
Funding holes for European banks are deepening. The Financial Times said they managed to roll over just $413 billion of the $654 billion due this year. As a result, they've got a huge $241 billion funding gap. In 2012, $720 billion in debt comes due.
Europe's banking sector deleveraging problem grows greater than they're able to handle. The FT says disposal assets on their balance sheets total $3.3 trillion in the next few years. Who has pockets deep enough to absorb it?