After the European Central Bank promised to purchase an "unlimited" amount of sovereign debt when a country gets down on its knees and asks for a bailout, things have calmed significantly in the financial markets. The interest rates on Spanish government bonds have fallen. This has created a strange situation because with rates now lower the government is saying that it will not need a bail out. But the only reason rates are lower is because the market priced in a bail out and the unlimited ECB support. The government knows that "support" will come with pressure to cut spending so they are dragging their feet as much as possible. How this will be resolved will not be a happy ending (rates surging again, Spain asking for bailout, spending cut, and the economy shrinking).
Meanwhile, have things actually been fixed in Spain as the bond market (and American stock market) has priced in? The best thing to do is check in with the day to day action on the streets of Spain.
Here is how things looked this afternoon: