(Bloomberg) Things are unraveling in Europe at a startling pace. The country in the greatest danger is Spain, which could become the fourth member of the euro zone to require a bailout, following Greece, Ireland, and Portugal. Spain's 709 billion euros of sovereign debt is roughly twice the debt of those three nations combined, according to data compiled by Bloomberg, so a rescue of Spain would be a heavy burden for the rest of Europe. Investors got overconfident in Spain after the European Central Bank announced last December that it would funnel cheap, three-year loans to European banks, which they could (and did) use to invest in the debt of their own nations. The ECB lent more than 1 trillion euros. Spanish government 10-year yields, which were over 7 percent last November, plummeted to below 5 percent this January and February. They have raced back upward, to just below 6 percent in recent weeks.

Spain's yields started jumping in early March, after Prime Minister Mariano Rajoy announced that the government budget deficit would miss the 4.4 percent of gross domestic product target that the previous administration had agreed to with the European Union. The problem is that the easy money from the ECB didn't do anything to fix Spain's fundamental problem—overindebtedness and an uncompetitive economy that, because of the common currency, can't use depreciation as an escape hatch. Bloomberg News reports today that Rajoy "is targeting basic public services for the first time since his election in December in a bid to convince investors he can bring order to the nation's finances." But Mark Grant, a managing director at Southwest Securities in Fort Lauderdale, says that the education and health benefits that Rajoy wants to cut "do not totally come under the purview of the Spanish federal government." Writes Grant in a note to his customers today: "Even if the Federal government could get the cuts accomplished, it will take them months and perhaps months and months so that the headlines of what Spain is going to do has all of the substance of the milky froth atop some cup of coffee in Valencia that resembles a cappuccino." So not only does Spain have financial problems—it has Americans dissing its coffee.