There's nothing wrong with the European welfare state model, just look at Scandinavia. The problem is with sharing a currency with countries that you have large trade deficits with; so not the European model, but the Euro model.

Spain did not run up high public debt.

http://www.cepr.net/index.php/blogs/beat-the-press/spain-did...

http://www.cepr.net/index.php/blogs/beat-the-press/spains-qd...