SPAIN'S ECONOMY is running out of steam, writes Matthew Lynn at Bloomberg:

Europe has often had models to follow over the years: France in the 1960s, Germany in the 1970s, and the U.K. in more recent times.

And how about Spain? No other major European economy has been so consistently successful in the past decade.

Its boom has been going on for so long, everyone is used to it. The euro region's growth last outpaced Spain's in 1995, according to Bloomberg calculations.

Now the first signs are starting to emerge that the miracle may be running out of steam for Europe's fifth-largest economy. Spain's prosperity now looks more like a combustible mix of a real-estate frenzy and an influx of immigrants rather than a lasting transformation of the country's competitiveness.

Once that kind of boom runs into the ground, it can take a long time to sort out the mess.

I'm afraid the worrying signs he sees are all correct.

UPDATE. The silver lining.

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