General Franco’s bewildering tiers of public administration have survived almost 40 years of democracy in Spain. In some ways, the sprawling grey granite Nuevos Ministerios complex in central Madrid, completed in his regime, is a symbol of how little has changed: the civil service is still bloated, and public servants are still a protected species. Measures presented to parliament this week by budget minister Cristóbal Montoro suggest as much. His €27bn of spending cuts and tax increases made up the harshest budget since Franco’s death. Yet instead of cutting the state wage bill and removing layers of government, he cut spending on research and development, a recovery driver, by a quarter. Functionaries’ pay was merely frozen.

Nor is this week’s budget plan yet the real thing. Mr Montoro still has to rein in Spain’s 17 autonomous regions, responsible for most of last year’s budget overspend and higher borrowing. Spain’s debt could hit 80 per cent of output this year, from a less stressed 69 per cent in 2011.

True, the new government has inherited finances in far worse state than its predecessors led markets to expect. But, even as Mr Montoro’s pro-cyclical austerity measures bite, investors doubt that Madrid can cut the budget deficit by more than 3 percentage points to 5.3 per cent of output this year, as Brussels wants. At yesterday’s bond auction, the government raised only €2.6bn, shy of its €3.5bn target. The yield on 10-year bonds rose to 5.7 per cent; banks followed equities lower.