Whereas the UK has just experienced a very shallow second dip-recession (with most experts predicting overall growth in 2012), Spain is still mired in deep recession. For a population already stretched to breaking point with tax hikes and cutbacks, the idea of further squeezing seems impossible. Rajoy’s government seems fixated on meeting the EU’s unrealistic targets at all costs – even that of his people’s welfare. On Thursday (the 22nd of March), the rhetoric of the unions was damning – branding the EU and Angela Merkel “tyrannical” for insisting that Spain meet its outlandish targets, whilst castigating Rajoy as “spineless” for submitting to their demands.

In reality, he has little choice. The government has a near-irreconcilable balancing act between the demands of the EU and its own people. PSOE, the socialist party in favour of the strikes, suggests suspending the cutbacks for a few years to stimulate job creation. But this would only prolong the pain, leaving Spain swamped in debt for years to come and extending the repercussions for the eurozone, whose bailout strategy depends on Spain returning to the black.

For Spain, there is no magic formula. It is likely to be several years before its debts are paid and the road to recovery is littered with obstacles. The remedy – higher taxes, more cuts and perhaps even more drastic reforms – will likely make Mariano Rajoy’s PP politically toxic and usher in the return of the socialists. The regions of Asturias and Murcia have already rejected the PP in local elections.

Short-term public outcry could make the next few months Spain’s ‘summer of discontent’. The air of unease on Thursday was almost palpable. Mounted police paced towards the crowds of striking workers. Beret-clad police officers stood anxiously in front armoured riot vans next to the city hall.

In the event, there was no need for heavy-handed tactics to keep civil order. But the situation could become more heated if the government turns the screw further. Rajoy’s next move will be decisive in keeping his people in check.