What tools are available to investors/lenders to adjust for the risk of lending to different borrowers?

In Europe, there are different risks in Spain and Greece than in England and Germany. I just read an article saying that Spain, when it had a separate currency, could devalue its currency in order to reflect its lower rates of productivity and profitability.

However, this tool is no longer available when they use the same currency. So if you don’t have different currency, what tools are at your disposal that can reflect the different risks of different investments in different geographic areas?

Are any of these tools illegal because they discriminate in an illegal way (say, based on race or nationality)? Are there tools that can be used in Europe but not in the US?