SUDDEN SIESTA in the Spanish economy, BusinessWeek says:

Is the spanish miracle at an end? After 11 years of buoyant growth, Spain's standard of living has soared, unemployment has plunged, and the country's biggest companies, from BBVA to Telefónica, are playing an increasingly active role on the international stage. But cracks in the economy are showing. Although growth is expected to be around 3% this year, foreign direct investment is diving, the current account deficit is ballooning, inflation is on the rise, and productivity growth lags behind the rest of the core 15 members of the European Union. And from 2007 on, the billions of dollars in net aid Spain receives every year from the EU -- equivalent to 1% of annual gross domestic product -- will begin to dry up. That money will go instead to the new, poorer EU members from Eastern Europe. By 2013, Spain is expected to be a net contributor to EU aid funds. The country will then have to find other ways to finance investments in schools and infrastructure -- such as issuing debt or raising taxes -- or reduce spending.

Long one of Europe's best-performing economies, Spain has outgrown the low-wage model that enabled it to lure big multinational investments and close the income gap with its wealthier neighbors to the north. But it hasn't yet succeeded at joining the ranks of the world's high-tech producers, which other European success stories such as Ireland and Finland have managed to do. Today, "Spain is a developed country, but it isn't an advanced one," says José Antonio Herce, an economist at the Madrid-based Foundation for Applied Economic Studies.

(Hat tip: John Pawlenko).