As far as big, stupid housing projects go, Residencial Francisco Hernando is hard to beat.
Located in the bleak flatlands in Sesena, a semi-industrial suburb some 35 kilometres south of Madrid, the development is a monument to construction gone mad. Close to a dozen enormous apartment blocks, each containing 300 units, sit fully built but entirely empty, their green shutters drawn.
There is no sign of life anywhere - not a tree, not a blade of grass - save a bored security guard, Angel Fernandez, fiddling with the radio in his yellow Jeep. "It's all empty," he said. "With the crisis, people don't buy."
About half a kilometre away, another housing development surrounded by nothing is using low prices to lure customers. New apartments can be rented for €450 ($630) a month. Alberto Ordonez, an industrial painter, bought a big place there a few months ago for €163,000. He had to trade down because full-time work has proved elusive for two years. "I live here because it's not expensive," he said.
Sesena and the hapless Mr. Ordonez represent everything that's wrong with the Spanish economy - a collapsed housing market, a persistent recession, an unemployment rate of almost 20 per cent, the European Union's highest.
But Spain is not just the dark symbol of the burst housing bubble. It, along with Greece, Portugal, Ireland, and to a lesser extent Italy, also represent the economic and political risk associated with the euro, the common currency of 16 of the 27 EU countries.
The euro, introduced 11 years ago as drachmas, liras, francs, pesetas and deutschmarks were tossed overboard, initially proved a godsend to the EU countries - mostly the small ones - weary of the endless devaluations, exchange-rate risk and high interest rates associated with fringe currencies in perennially struggling economies. Economic growth rates rose smartly, disguising the inner rot in the same way a freshly painted old car belies its clunky engine.
The rot came from reckless spending, fuelled by the low interest rates that came with the euro. The open-chequebook approach for housing, infrastructure, wages, Olympic games, defence, social safety nets and other areas sent national debt and budget-deficit levels of the weaker, undisciplined countries through the roof.
At least one of them - Greece - is now in danger of defaulting on its sovereign debt and may yet require a bailout from its EU colleagues or the International Monetary Fund. The need to rescue Greece, and possibly other struggling members of the union, poses the most critical test faced by Europe since the creation of a single currency more than a decade ago.
"This is a major challenge, and it's something that the EU has to work through," said Amy Verdun, co-author of a new book on the euro zone, Ruling Europe: The Politics of the Stability and Growth Pact , being published this month, and chair of political science at University of Victoria. "It's not Greece as such, but what Greece stands for."
If Greece is left to go bankrupt, does it mean the euro area cannot look after its member states? And conversely, if it's bailed out, does that mean the detailed rules set up to protect the euro area "are just in vain and there is no responsibility for governments to live up to their commitments?"
Few economists and politicians predict the demise of the euro, which in turn would rip the heart out of the EU. But there is no doubt the currency union is under is first serious threat as the economies of the PIGS - Portugal, Ireland, Greece, Spain - unravel, exposing both the EU's soft underbelly and the flaws in the one-currency-fits-all design.
The euro is an odd beast. It is a common currency in a common market without political and fiscal union. Countries retain control over their national accounts even though they face EU-mandated constraints, notably the rule - widely ignored - that budget deficits not exceed 3 per cent of gross domestic product (GDP).
In other words, EU countries can live beyond their means and not suffer the ultimate penalty - ejection from the currency. But how long might that luxury last? "The historical fact [is]that no monetary union has survived without fiscal union," Russell Jones, a strategist with Royal Bank of Canada's investment arm in London, said in a recent note.