If Spain is going bust why is their interest rate only 7% - please explain

So the news is that markets in Eurozone have pushed up the rate of borrowing for Spain to 7% . I understand that it is many times the rate in other places and that a higher the rate  of interest treflects a greater risk. But surely if you really expect a default it has to be way above that ? I like to think I have a reasonable grasp of economics but this one has me flummoxed.

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I've been blogging on my website www.formationsdirect.com for some time with my non-PC view of the world of economics,business and other stuff. If you like to read the views of somebody who doesn't "toe the party line" you've come to the right place. Government cock-ups, financial turmoil , business scandals and people's behaviour - I've got something to say about it , whether you like it or not.