Low public debt, sure, but private debt was high and the housing crash left Spanish banks in a precarious position.

It turns out though that the private debt of large banks is a form of public debt in disguise, at least as far the "solutions" to the debt problem have been implemented by every country with the exception of Iceland (i.e. the public purse has been used to bail out the catastrophically over-indebted banks directly or indirectly).