The situation in Spain is far from pretty. Ahead of yesterday's budget, a general strike shut down swathes of industry, paralysed public transport and brought several large cities all but grinding to a halt. More troubling still were mass demonstrations in which hundreds of thousands of people took to the streets. When it finally came, Prime Minister Mariano Rajoy's budget was no cheerier, slashing a whopping 17 per cent from government spending this year alone in a desperate effort to meet EU-brokered deficit reduction targets.
Mr Rajoy's critics are – not unjustifiably – concerned that such harsh measures will be unsustainably painful for an economy already set to contract by 1.7 per cent this year. With unemployment running at 23 per cent, and almost half of young people out of work, the human cost is considerable.
But the alternative is still worse. Mr Rajoy's decision to soften this year's deficit target earlier this month not only helped to push Spain's all-important borrowing costs back above Italy's for the first time since August. There were also frantic talks with colleagues in Brussels anxious to defend the credibility of newly-agreed debt rules designed to keep the lid on a crisis that could yet spell the end of the euro. Such a catastrophe would hit Spain as hard as any.
It is not all doom and gloom. While Mr Rajoy was struggling to keep all the balls in the air in Madrid yesterday, there was a modicum of progress elsewhere as eurozone foreign ministers agreed to boost the firewall created to soothe investors' nerves. While not quite the expansion some had hoped, the new near-€800bn total is higher than the early reluctance of the German Chancellor suggested, and it may yet be enough to encourage contributions to the IMF's companion rescue fund.
Progress or not, the abstract numbers of the European Stability Mechanism are unlikely to calm the fears of the average Spaniard. Euro-zone economies face a long, hard road to recovery. The upheavals in Spain, like those in Greece before them, only underline the fact that the politics will be no easier than the economics.