Scenario #1: Go along with the IMF/EU. The result will not be very different than that of Greece. There will be continued downgrading of Spain's debt to the point that it will reach junk status and be unable to borrow from private sources. The euro would lose ground to other currencies, and Spain's unemployment will rise well above the current 21%, while living standards will drop and the prospects for downward mobility will be realistic for a large percentage of the population. However, to impoverish a nation and expect no reaction from the broader masses is unrealistic.
Scenario #5: Government places a good deal of public property up as collateral to borrow from the European Central Bank at one percent or less, and uses the funds to pump liquidity into a cash-starving economy - both private enterprises and public, with the pre-condition that they invest in job-intensive projects and not use the funds to purchase securities the way that US and EU banks did when they received bailout money or to reward executives with extra payments. This package would work even better if under its implementation upper and middle management in both public and private sectors takes a salary cut (20-30%), to be followed by raises and bonuses as the economy bounces back.
Scenario #6: Forge a regional coalition (something like an informal bloc) with Portugal, Ireland, Greece and perhaps other EU debtor members that are under the gun from the Franco-German informal creditor bloc that is determined to reduce the EU periphery into semi-colonies, depriving them of their national sovereignty and using them as markets to sell their products and services, and cheap labor.
Scenario #7: JE is absolutely correct on Argentina, and if anyone has any doubt just contact any Argentinian to see what they have to say about the matter. If Argentina had not defaulted, it was headed for massive rise in poverty levels from which it is still trying to emerge. Short-term, default is worse than staying the course, but a much better option longer-term. Default to avoid social unrest or even revolt that causes shock waves across EU is a realistic option for Spain as it is for Portugal and Greece. Those that doubt this scenario, just check out how many people are speculating (shorting the market) that the MED-CLUB of debtor countries could be headed that way. This is where the country may be headed if the austerity regime lingers on and the Chinese water torture process continues as it has in Greece.
One could argue that Spain is closer to Ireland, which has fewer problems dealing with the IMF-EU austerity. Ireland negotiated a better deal from the outset than Greece, but it also did not start with 21% unemployment like Spain, and immense structural problems that exist in the Spanish economy. In case of social uprisings, anything is possible, from a military coup, to civil war, to a successful coalition of disparate progressive forces emerging to form a new government that defaults on the debt and begins the process of negotiating with foreign creditors for new loans as part of a deal to massively reduce past debt.