Spain is the 5th largest European economy and 12th largest world economy.
Ingrained weaknesses of the Spanish economy are
- inflation (especially house price inflation, see below)
- Poor education system
- Large underground (black) economy
- trade deficit at 10% of GDP
- Falling (reversing) income flows from the EU
Spain's economy was booming 1997-2007 on the back of a huge construction effort, which ground to a halt in 2008.
Mortgages caused household debt to triple, so the median household debt/income ratio was 125%. Many find themselves in negative equity.
Note that this is a private, not a public debt problem. In fact, in 2008, the Spanish Government had a surplus. That is why it is right that Spanish banks should get EU support without the Spanish state having to do further self chastisement.
Hope this helps.