The euro zone, a 17-member fiscal union that shares a single currency, is like an 18-wheeler. Spain has the fourth-largest economy and population in the eurozone, and as such it’s one of four critical axles, along with Germany, France, and Italy. Just about any tire can go flat, perhaps even fall off, and the truck will still roll on – unless the tire is on one of those four axles.
A broken down eurozone would quickly drag the United Kingdom with it and the rest of Europe would follow, with the US trailing close by. Rajoy's job of steering the Spanish economy is thus a critical one.
“Spain though is quite constructive. We saw good success. Fiscal adjustment has been credible, social acceptance is good. It’s a good example,” said Luigi Speranza, a London-based eurozone economist with French bank BNP Paribas. “But it’s very important, not just because of size. It’s politically important. If Spain fails everything will fail.”
The cost of borrowing for Spain has plummeted from nearly 7 percent to 5.3 percent since Rajoy was elected, although much has to do with the European Central Bank’s decision to inject almost €500 billion of cheap cash into the European financial system. Still, Italy and other countries have not benefited as much, due to a lack of political consensus, which Spain has.