Spanish officials tell a dramatic turnaround story: from near-bankruptcy a year ago to model of budget austerity and reform now.
There are just two things missing: jobs and growth. And only one potential salvation: exports.
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Ministers reel off a litany of statistics to show how much has been achieved: the budget deficit has been cut from 11.2 percent of GDP in 2009 to 6.98 percent last year. Some 375,000 public sector jobs have gone, labor costs are down to 2005 levels and competitiveness has improved.
Senior executives boast of how they have trimmed the bloated debts of their multinational conglomerates, hastily bolted together with abundant cheap money during the boom years.
They have used new employer-friendly labor laws to shed jobs and costs; infrastructure group FCC uses five teams of managers to run seven Spanish cement plants, for example, with managers travelling hundreds of kilometers between different sites.
"Spain's adjustment is a work in progress," says Fernando Fernandez, Professor of Economics at the Instituto de Empresas business school. "There is institutional stability and a willingness to reform ... but growth and employment remain elusive."
Spain has a strong governing party with an absolute majority in parliament which need not face voters until late 2015. That's a sharp contrast to the uneasy coalitions constructed in Italy and Greece.
The complaints voiced loudly across southern Europe are not echoed in Madrid: Spain's conservative government has no time for moans about unfeeling German domination of the euro zone or complaints about Berlin's supposed lack of understanding for the social problems austerity policies have unleashed.
Prime Minister Mariano Rajoy's Popular Party, which has ties to the Catholic Church, also enjoys close ideological and personal links with Chancellor Angela Merkel's Christian Democrat coalition in Berlin.
German Finance Minister Wolfgang Schaeuble has agreed to guarantee jointly with Spain a new fund to lure in $5 billion of investment into Spain's capital-starved smaller companies.
Despite nearly a year and a half of unbending austerity, Rajoy's party is still more popular than any other in Spain - if a poll rating of 28-29 percent can be called popular. That result partly reflects the fracturing of the left, where the long-time governing Socialist Party PSOE has bled support to the United Left of communists, ecologists and republicans.
NOW FOR THE BAD NEWS
But two clouds hang over the bright horizon seen by the Spanish ruling class.
Record unemployment blights the government's record. The collapse of Spain's construction boom and the cuts to its public sector lie behind the alarming jobless numbers, equal to 27 percent of the workforce.
Ministers argue the figures are not the threat to social stability they seem. They point out that in the first quarter of this year, the total number employed was similar to 2001.
What changed was the population. Spain experienced massive immigration as millions of largely unskilled workers arrived to seek work in the construction sector, pushing the population up by nearly seven million in only nine years.
When the property boom ended, some eight million jobs disappeared with it. But many immigrants and some Spaniards are now leaving - Spain lost one percent of its entire population last year.
"The Spanish population will probably fall by two million in the next four to five years," Fernandez said. "Of the six million unemployed, two million are probably foreigners and they are likely to go."
Inventive Spaniards have adapted. One senior official tells of how his architect brother-in-law found new opportunities in Qatar. "He has grown professionally more in the past six months than he did in his whole previous career," the official said.
At the other end of the spectrum, a chief executive tells of how cleaners at his company's premises agreed to take a 25 percent pay cut to keep their jobs - something unimaginable in the company's German or Austrian operations.
But even if one accepts the government argument that the jobless figures are not as awful as they look, and that Spain's traditionally close-knit society will not unravel under the pressure of a generation of unemployed youngsters, there is a second problem.
DEBT STILL HANGS HEAVY
Spain remains heavily in debt. It may have a current and capital account surplus for the first time since 1998 but the country still ran a deficit of nearly 7 percent of GDP last year and Rajoy decided to trim the budget cuts planned for this year by 7.2 billion euros to 18.9 billion to lessen the pain.
In order to pay back its debts and reduce borrowing to a more manageable level, as well as to create jobs, Spain desperately needs growth. Instead it is mired in recession, its economy having shrunk for seven consecutive quarters.
Ministers and CEOs alike have only one answer: exports. With public spending being cut, private companies too busy paying back debt to invest and consumers pruning their purchases to compensate for wage cuts, the only way for the economy to recover is by selling abroad.
Officials trumpet the country's sharply improved competitiveness. Since peaking in early 2009, according to government figures, Spain's unit labor costs have fallen sharply while those of France, Italy and Germany have risen.
Prices are rising in Spain more slowly than in other euro zone countries, which helps further.
Carmakers - traditionally among the quickest to react to changes in relative labor costs - have done so. Six of the 11 foreign carmakers present in Spain plan new investments, including France's Renault and Volkswagen.
Spain's exports have risen from a trough of 23 percent of GDP in 2009 to 33 percent this year. Traditional export staples such as fruit and vegetables and cars have been joined by chemicals, telecoms equipment and technology.
"When I board a plane to Chile I see the plane full of Spanish businessmen flying to sell products I never knew existed to markets which none of us had ever thought of," said one Spanish executive.
But Spain's exports remain mainly dependent on the sickly euro zone. And if the world economy flags, the country's hard-won new markets in Latin America and Asia could shrivel too.
That makes further structural change crucial and some critics detect reform fatigue.
They argue that with elections looming in 2015, Rajoy will not waste political capital making tens of thousands more civil servants unemployed and cutting back unemployment benefits and the minimum wage.
Ministers dismiss such worries. They promise to press ahead with streamlining Spain's cumbersome public sector, although it is not clear they have the political will.
Other unfinished business includes further changes to labor laws and regulations to help entrepreneurs, and reforms to adjust pensions to compensate for greater life expectancy.
Credit is also a problem. Large Spanish multinationals can get around the lack of bank funding by issuing bonds guaranteed on their overseas operations but smaller companies face an almost total dearth of lending and punitive interest rates.
Markets for now are giving Madrid the benefit of the doubt. Spanish 10-year bonds are finding plenty of buyers at yields of around 4.4 percent, sharply down on the 7.5 percent seen a year ago which prompted panic and talk of a bailout.
But ultimately, Madrid's fate is likely to hang on its export performance in a still uncertain European and global economy.
(Editing by Mike Peacock)