MICHELE NORRIS, host:
And when it comes to European issues, they don't get much bigger than the ongoing economic crisis there. The euphoria over the plan to stabilize the monetary system has already dissipated. Investors in European governments are now focusing on the challenges that remain if the region's debt and deficit issues are to be resolved.
That reality is especially painful for Spain. The country has come a long way in the last 30 years but Spaniards are realizing their place in Europe is not yet secure.
From Madrid, NPR's Tom Gjelten reports.
TOM GJELTEN: The king of Spain, Juan Carlos, had surgery here last Saturday. A minor operation but it dominated the news all weekend. The king is revered here in large part because of the role he played in Spain's transition to democracy after the death of longtime dictator Francisco Franco. When military officers attempted to seize power in 1981, the king stood up to them and they backed down.
In the years that followed the king's courageous stand, Spain became modern. The national will was clear: Spain would join the rest of Europe.
Economist and newspaper commentator Fernando Fernandez says there was a social consensus in the country to reform.
Mr. FERNANDO FERNANDEZ (Newspaper Commentator): This social consensus was underpinned by the obsession to become a regular European country. We had the excuse to be like the European. So, in a way it was easy, because all we had to do was, well, let's see what the Europeans do, let's copy it.
GJELTEN: But it's precisely this idea of being a regular European country that may be jeopardized now by the debt crisis. What happened was Spain got a little carried away with what it meant to be like the Europeans.
For too many, it was a lifestyle: eating well, nice vacations, fancy cars. Gerardo Viada, now a prominent Madrid lawyer, came of age during this period and saw a change in his country's behavior.
Mr. GERARDO VIADA (Lawyer): (Spanish spoken)
GJELTEN: Spain went from poverty to wealth in the manner of the newly rich, Gerardo says. Everyone bought things, invested in things without having a solid base underneath.
For years, Spain got away with it. The economy was vibrant, and with the introduction of the euro currency, banks were eager to lend. But it wasn't enough.
Fernando Fernandez, who teaches at the IE Business School, says Spain fell into what he calls the European trap.
Mr. FERNANDO FERNANDEZ (Teacher, IE Business School): In a way, the country has lost its purpose. We wanted to be Europe, and we wanted to be rich. We wanted to be as rich as the Europeans and as civilized, democratic, as tolerant, as liberal. Now, we accomplished that in many areas, and now we've lost the next goal. What do we want to be when we grow up?
GJELTEN: Spain's identification was with a united Europe. But the debt crisis has divided Europe more than it's been since the European Union was created. Spain's overspending associated it with Europe's Mediterranean periphery not with its Franco-German core. And that's not what Spaniards had in mind when their country merged with Europe.
Jose Ignacio Torreblanca directs the Madrid office of the European Council on Foreign Relations.
Mr. JOSE IGNACIO TORREBLANCA (Director, Madrid Office, European Council on Foreign Relations): The cracks within Europe between north and south are very revealing. People are looking at each other with prejudices, stubborn Germany versus, you know, spendthrifters, Latins. And so all this is back on the table.
GJELTEN: Torreblanca, who's 41, is part of the Spanish generation that takes its European identity for granted. He was amused recently at a conference in Madrid when an aging military officer stood up and thanked visitors who had come, in his words, from Europe to attend the meeting as if it were somewhere else.
But now, Spaniards have to face that very prospect, that their country is slipping into a second European tier, scorned by its northern neighbors and by the bond markets, which aren't convinced the country will demonstrate budget discipline.
Torreblanca argues his country from here on should focus more on its own problems and advantages and less on its relative living standard.
Mr. TORREBLANCA: We should get our homework done, as we've done in the past. And in that, markets are always reminders of the things you have to do.
GJELTEN: After all, learning discipline is part of growing up.
Tom Gjelten, NPR News, Madrid.