So far, Spain appears to be in a stronger position than Greece. It has a more solid competitive economy. It is slightly ahead in its timetable to sell €86 billion ($113 billion) of debt this year. On Thursday, Spain will auction two- and 10-year bonds, a crucial test of investors' confidence.
Another plus: While the EU and European Central Bank (ECB) still appear behind the curve in solving the region's mounting debt problem, they at least have gained more experience dealing with it.
"The leadership has been reacting to and addressing crises in the past two years rather than being ahead of the market, but look at where they are now compared with 2010 when Greece first became a problem," says Hung Tran, deputy managing director of the Institute of International Finance, Inc. (IIF), an association of global commercial banks and other financial institutions, based in Washington, D.C. The euro zone has created firewalls to contain the crisis and signed a fiscal compact that binds nations to budget targets. "Compared with two years ago, we have the tools" to address the crisis.
While Greece's problem is whopping government debt – 160 percent of gross domestic product – Spain's government debt at the end of 2011 stood at only around 70 percent of GDP, which is below US levels and even the euro zone's average. Instead, its main problem is private-sector debt.
The collapse of a housing bubble has pushed the private sector's debt to GDP ratio to a huge 214 percent, 70 percent higher than Greece's. Of the five largest euro nations, it has by far the highest private debt ratio.