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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