Spain: Current Account Lamentos ?

According to Banco de España, the current account deficit in Spain increased from €66 billon in 2005, to €86 billion in 2006, or from 7.3% to 8.8% of GDP. Surely there must be something horribly wrong here… or is there?
Macarena always counts on doomsayer-extraordinaire, Nouriel Roubini, to eloquently run her through the many reasons why almost any financial number in any corner of the world is a sure sign of imminent crisis. The Spanish external deficit surely must have merited some catastrophic prediction. Surely enough, about one year ago, Roubini suggested that Macarena´s native Spain (along with, inter-alia, the U.S and Australia) was a leading candidate to be “the next Iceland”. Reasons? His usual, the world-over: housing-bubble-credit-boom and…….. current account deficit.
In the year since, the current account deficit has grown, while interest rates (where investor fears should show up quickly) have remained exactly where they stood, vis-à-vis the rest of the region, proving that there were no Spain-Specific fears appearing during the last year or so, despite the fact that Nouriel´s usual suspects showed little in the way of turning around.
As a member of a currency union, and with about 75% of her total trade being within the union, Spanish authorities lack recourse to a perennial favorite adjustment strategy: nominal devaluation of the currency. With a fiscal surplus, and huge practical political difficulties to push it further up, it also lacks the ability to adjust via fiscal retrenchment. What is left? Structural reform, meaning labor market flexibility and wage moderation (to enhance competitiveness). After all, since 1995, unit labor costs have risen 21% with respect to the rest of the region. This, of course, is a prominent member of the predictable "easier-said-than-done" family of advice that philosophers rutinely (and not always costlessly) offer practioners. In any case it takes time, plenty of it, and if the process takes place in good international times, with ample global willingness to finance external deficits, then the right choice is not to make a choice. That is, never be cornered into the "either-or" dialectics, so typical of inmature men and zealous ideologues. One does not have to choose between structural reform and external financing: i.e, there is no serious reason to give up external funds and higher growth, through virile, manly, fiscal retrenchment, while structural reform proceeds at a politically feasible and sustainable path.
It is of course trivially true that a world in which nobody runs external deficits, where credit grows at exactly the same rate as the economy as a whole, and where asset prices move in line with consumer prices, we would be “safer” than the real world in which large external imbalances and important asset–price booms are usual occurences, some with dire consequences. This "safer" world will also be a world in which growth, in many countries, would be lower than has been the case. In the case of Spain, growth has been linked with external finanancing, along with strong immigration trends and a very competitive banking sector.
Macarena always sees many reasons to worry herself (she did, after all, study a bit of dismal science), but as a woman who has seen a thing or two, feels little per-se despair when a country runs sizeable external deficits. In the case of her own country, Macarena simply lacks the nerve to conclude that the risks associated with having the highest external deficit in the region, have outweighed --or do, at present, outweigh--- the benefits of having one of its the strongest growth rates.