The Spain exchange traded fund (ETF) staged a comeback last week, rallying 6.3%. It’s no small feat for a country frequently fingered as one weighed down by troublesome debt.

To be sure, Spain is facing real trouble. Gregory White for The Business Insider reports that right now, interest rates on Spanish 10-year sovereign debt are near 5.5%. That’s worrisome, considering that Barclays Capital recently estimated that public debt would explode if interest rates rose to 7%. [Spain ETF Struggles With Unemployment and Slow Growth.]

But on the flip side, Spain has Deutsche Bank firmly in its camp: the CEO says investor mistrust of Spain isn’t justified and the issues in the banking industry are “manageable” ones, Aaron Kirchfiled for Bloomberg says. Spain’s finance minister agrees, insisting Spain won’t be seeking any bailout cash. [Europe ETFs for Good and Bad Times.]

Who do you believe? The answer may come in watching iShares MSCI Spain (NYSEArca: EWP) over the next several months. Spain has to finance $331 billion of maturing debt in 2011. That, combined with an unemployment rate that tops 20%, could soon put the kibosh on big moves in EWP. But by the time a firm turnaround begins, this ETF could be a real bargain.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.