Even as European Union (EU) leaders gather in Brussels on Thursday to agree upon a common budget, Spain is struggling to get its own finances under control.
For starters, signs of economy recovery in Spain are few and far between with the economy expected to shrink between 0.5 and 1.7 percent in 2013. That will serve to see unemployment rise to over 6 million and continue to put a break on consumer spending.
Javier Diaz-Gimenez, economics professor at IESE, said it will be tough for Spanish Prime Minister Mariano Rajoy to push through budget cuts in the 2013 and 2014 budgets.
"If we have two more deep rounds of public sector adjustments, that would amount to three years of cuts in total and it will be very hard to push that through," Diaz-Gimenez commented.
He questioned how further cuts of 4 percent of Spain's GDP could be slashed from the budget over the next two years without causing widespread protests in a country that already saw two general strikes in 2012.
Although the world economy as a whole, led by Asia and Latin America, will grow by around 3.3 percent in 2013, Spain seems to be stuck in first gear.
"There are two reasons for this two-speed growth: the countries that have carried out fiscal adjustments are growing faster and those that have not are suffering," said Pedro Videla, economics director at the IESE Business School in Madrid.
He added that Spain has more public employees and a higher public sector wage bill now than in 2009.
Spain has managed to ride through recent market pressure in the wake of European Central Bank President Mario Draghi's promise last July to do "whatever it takes" to defend the euro.
This stand helped start a consistent fall in the level of Spain's risk premium and the interest rate on the country's 10-year bonds, from what were considered to be unsustainable levels.
The downside is that with banks buying government bonds there is not enough money to loan to companies could help create unemployment and kickstart the Spanish economy.
"This year we will still have recession in Spain and unfortunately that means that unemployment will keep growing in this country," Videla said.
Official figures this week said 8,000 jobs a day were lost in Spain in January.
"The constant fall in employment numbers is creating a continued problem for the social security department which is receiving fewer contributions while having to pay more in unemployment benefit," said Diaz-Gimenez.
Further complicating the picture is the recent corruption scandal implicating Rajoy and several high-ranking officials of his ruling Popular Party for receiving illegal payments from a Swiss bank account held by former Treasurer Luis Barcenas.
The scandal and its consequential threat to Spain's political stability was reflected by a rise in Spain's risk premium and interest rates in Thursday's bond auction.
"These corruption accusations come at a very bad moment for this country. It is key in the situation Spain is at now to have credibility on the international markets," said Videla.
"If that credibility is not there, we will have an increasing spread of Spain's debt and we could go into a negative circle as we had before," he added.
Both experts said they believed Spain may need to bite the bullet and ask for an EU bailout. The question, they said, was if Rajoy could politically afford to ask for one now given his approval ratings are at an all-time low of just 2.81 points, according to a recent poll published by the Center of Sociological Investigations.
"Rajoy could have led, but he has not done so. This country will be saved by the people who get up and work to the best of their abilities," said Diaz-Gimanez.
