Clicking around the Interweb Tubes, this is what seems to be happening in Spain right now:
- The European Central Bank is printing money.
- Spanish banks are borrowing this money at 0% interest.
- Spanish banks are using the money to buy Spanish government bonds at about 6%. Free profit*!
- The Spanish government is operating with a substantial budget deficit, so it issues still more bonds.
- Return to #1.
* - The free profit is not without risk. As the holders of Greek bonds discovered, when the nation defaults, they're totally hosed. It tells you all you need to know about the economy of Spain that the banks would rather buy government bonds which they know will end badly than loan it to Spanish businesses.