Spain is fixing the house but still lives in a bad neighbourhood.

Spain's 2013 funding program could hardly have got off to a better start. Madrid hoped to sell up to €5bn ($6.53bn) of bonds; instead, it managed €5.8bn-and at yields well below previous issues of similar bonds. As a result, Spanish 10-year bond yields have fallen decisively below 5% for the first time since March 2012. For Madrid, the successful auction is further confirmation that it is regaining investors' confidence and vindicate its decision not to seek emergency support from the European Central Bank.